The Role of the BRICS in Building Global Economic Equality

The Role of the BRICS in the Construction of Global Economic Equality

The Presidents and Prime Ministers of the BRICS Member Countries – an Association of the Major Emerging Economies: Brazil, Russia, India, China and South Africa – will meet from 25 July to 27 in Johannesburg for the 10th summit of the group. Other key countries have also been invited as guests, including Turkey as President of the Organization of Islamic Cooperation (OIC).
The South African invitation to Turkey and other emerging markets has sparked speculation. BRICS-plus "approach to the expansion of the bloc.However, the host countries have invited additional countries to the summit as guests for several years now.
A key reason for which there is a opposition within the bloc to increase its membership is that it has become a prestigious group by virtue of its small size.In addition, there is a perception that the club already has significant influence as such, accounting for 23% of global gross domestic product in 2016 – an increase of more than 10 percentage points from ten years ago
. be dismissed as another global institution "alphabet soup", nowadays its importance is growing, which has raised fears in some quarters that it could eventually become a unified anti-Western alliance.
Certainly, the BRICS members (like the counterpart groups in the West) have certain There is also concern over some of Donald Trump's policies, including his commercial rates. However, it is unlikely that, in the foreseeable future at least, this will bring the club to become much more than an increasingly institutionalized forum for emerging market cooperation.
Part of the reason is the heterogeneity of the BRICS countries. with their various interests resulting. Take, for example, China's periodic tensions with India, including cross-border issues, which may affect the relationship between the two.
The theme of South Africa is: "Collaboration for Inclusive Growth and Shared Prosperity in the Fourth Industrial Revolution". This will involve discussions on measures to enable the BRICS to become even more important players and help drive a campaign for greater economic globalization. In the face of Washington's growing protectionism, the bloc wants to showcase its international leadership qualities and help the economist Jim O'Neill – who invented the BRICS concept – to surpass the G-7's collective economic output. # 2035
The summit's focus on inclusive growth and shared prosperity is relevant given that the world is at a potentially crucial moment in the global economic history. World Bank research, co-authored by Branko Milanovic and Christoph Lakner, indicates that for the first time in about two centuries, the global inequality of global income – one of the measures of the world. economic inequality, but not the only one – seems to be decreasing

. The BRICS countries are helping drive what could be the first period of sustained movement towards greater global income equality for two centuries.

Andrew Hammond

The BRICS nations, which together account for more than 40% of the world's population, have been the main drivers of this historic movement towards greater overall income inequality. Collective economic growth and the very large populations of India and China, in particular, have taken large numbers of people out of poverty.
At the same time, however, there is an opposite force: growing income inequality in many countries. This factor has also recently taken on increasing political importance, helping to fuel populist and nationalist politicians, from Donald Trump on the right to Mexican President-elect Andrés Manuel López Obrador on the left.
These compensatory pressures, like tectonic plates, push against each other. While the overall net trend of the past 200 years has been towards greater overall income inequality, there is significant and growing evidence since the turn of the millennium that the "positive effect" of increasing equality income between countries is stimulated by global development. South, is replacing the "negative effect" of growing inequality within nations.
Monumental as it could be, however, the image is not yet clear. While more evidence is needed to judge whether this economic phenomenon is robust and sustainable, which is certain, it is that the overall South lot has improved considerably, as have shown the BRICS during the last generation
. a "new" middle class, which is estimated to be as important as one-third of the world's population, is disproportionately located in the major emerging economies of Asia. Much of the bottom third of the global income hierarchy has generally benefited.
However, not all Southern countries have fully shared this success, at least to this day. A large part of Africa and part of Latin America, for example, have not generally benefited as much as Asia, and it is a problem that the countries from South Africa will seek to explore.
It is unclear whether the development of the South has enough momentum to continue to advance a more equitable global order. This will largely depend on the same question of whether emerging markets continue to grow robustly and whether the trend of increasing income inequality within countries is sustained.
On the first issue, the trajectory of the global economy will likely continue to turn south and, in the foreseeable future, many key emerging markets will likely remain robust. However, the remarkable wave of emerging-market growth of the past generation could now decelerate, and the global transformation it has produced in recent years will not be repeated.
Regarding the second question, it is not etched in stone the growth of income inequality within countries will continue, especially if there is a political will to fix it. However, the debate over the long-term reform agenda that should be undertaken to tackle this problem is disputed by the left and the right in much of the world.
Overall, the BRICS countries are helping to drive what could be the first period of sustained movement towards greater global income equality for two centuries. However, the fragile process could still be reversed if emerging market growth decelerates faster than expected and / or if income inequality accelerates in the countries, thus undermining efforts to promote the kind of inclusive growth that the top seeks to foster. Andrew Hammond is Associate with LSE IDEAS at the London School of Economics

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