March 29th, 2012
08:02 AM GMT
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(CNN) – It’s been a bad year to be a BRIC.

As the leaders of the BRICs – Brazil, Russia, India, China – gather in India for the summit Thursday, there is a nagging reality weighing on the world’s fastest growing emerging economies – they’re not growing as fast any more.

Brazil has seen its once blistering economy slow to an estimated 2.7% this year. Russia’s recovery from the global recession has been slow compared with other developing economies, the World Bank said in a report this week. Growth in India has steadily fallen as the nation lurches from scandal to scandal, most recently a report that alleges the government lost $211 billion in coal mining contracts.

Even the economic juggernaut of China has been slowing down, with Beijing dropping its projected growth this year to 7.5% which, if realized, would be the lowest growth rate since 1990, according to World Bank statistics.

What’s going on with the BRICs?

The reasons are as diverse as the nations themselves, a group cobbled together for economic rather then political reasons. Brazil, Russia, India and China became the ‘BRICs’ in a 2001 by Goldman Sachs in a report looking at the developing nations which may in time challenge the collective economic might of the G7.

The BRICS have become shorthand for, as CNN’s Fareed Zakaria has put it, “the rise of the rest” – the extraordinary economic rise of developing markets as the Cold War gave way to globalization in the 1990s. (The BRICS, which started summit-level meetings four years ago, added South Africa to the summit last year to politically acknowledge the developing power of Africa, a continent absent in the original quartet.)

But whereas the G7 powers – the U.S., Germany, Italy, Japan and the UK – share common post-World War II political, economic and democratic ideals, the BRICS have little in common besides strong post-Cold War growth and large populations.

Brazil’s growth last year was hampered in part by its strong currency which cut profits. (It’s not for nothing that the term “currency wars” was coined by Brazilian Finance Minister Guido Mantega in 2010 – an issue that has often put it at odds with fellow BRIC, China, over complaints Beijing undervalues its currency.)

Despite high oil prices, resource-rich Russia faces slower growth due to an aging – and unproductive – workforce and lack of corporate investment, a World Bank report said on Tuesday.

Growth in India has slowed below 7%, raising criticism that the bureaucratic democracy needs an overhaul to fight endemic corruption and open the economy to more foreign investment. “What India has failed to do is to live up to rising expectations,” Goldman Sachs’ Jim O’Neill, who first coined the term “BRICs”, told Bloomberg. “The occasional stated desires for 10-percent-plus growth cannot be met without much bigger reforms.”

But the BRICS are trying to answer the complaint the group is an acronym in search of meaning. On Thursday, the leaders are expected to sign a letter of memorandum toward starting a BRICS development bank which, like the World Bank, would give assistance to developing countries.

Such a move could give the BRICS political clout missing from an otherwise catchy slogan. As it stands, the BRICS meet seems more marketing than a meaningful, unified force in the business world.

soundoff (21 Responses)
  1. Nanda Kumar

    Not suprised at Kevins article at all, who would like to see "Third World" powers coming to the fore front...the West and the US have revelled in the policy of "Divde and Rule", ask us the Indians we faced it for over 200 years...

    March 29, 2012 at 8:27 am |

    well said.

    March 29, 2012 at 8:39 am |
  3. iknowyou

    Yet the americans still continue and are doing it in Africa as we read this article. Yet governments cannot see something like this. shame oon you

    March 29, 2012 at 8:47 am |
  4. Leroled

    They are called the BRICS bacuse the "S" stands for South Africa!! How ignorant.

    March 29, 2012 at 8:49 am |
  5. hafizahmed1959

    Reblogged this on Hafizahmed1959's Blog.

    March 29, 2012 at 8:53 am |
  6. Carl

    The author omitted Canada and France from the G7 countries

    March 29, 2012 at 9:02 am |
  7. Hans Smallegoor

    Once again an example of how many people think: if certain countries aren't doing well economically, the others must automatically be doing (much) better. Personally I don't buy it...

    March 29, 2012 at 9:16 am |
  8. Monika

    Kevin Voigt is just speaking out loud his insecurities. When you know you will not have the luxury of considering yourself superior anymore, you resort to bashing. Nothing suprising.

    March 29, 2012 at 10:33 am |
  9. Monika

    And, growing at 7 to 7,5% is so much better than at -2 to 3%. Loser!

    March 29, 2012 at 10:35 am |
  10. cnnitnews

    As i know this is Putin who decide that Russian economy should growing 4-6% to avoid overheating. Did cnn hear it or they simply watch numbers.

    March 29, 2012 at 10:41 am |
  11. monsoonpk

    Reblogged this on Everyday Life & Thoughts.

    March 29, 2012 at 10:49 am |
  12. vasco

    Isn't it amazing that the BRICS inspite of having different political systems are working together and have the highest growth rates. Surely Europe and the US has some 'learning' to do.

    March 29, 2012 at 10:50 am |
  13. Land of Indus

    BRICS should be shortened to just BC (Brazil, China). That's where the crux of the matter really lies.

    March 29, 2012 at 11:25 am |
  14. Matt C

    Obviously what the BRICS have achieved has been remarkable, but whether this group of countries has what it takes to lead remains to be seen. Brazil's economy actually contracted in the last quarter the end of 2011 and growth has been sluggish since, Russia is seeing the emergence of a huge demographic crisis, India's future is being compromised by corruption at the highest levels of government, China's economy is starting to suffer from a lack of a domestic market due to its reliance on exports to the western world. I still don't know why South Africa is included in this group, it is only the world's 28th largest economy by nominal GDP.

    March 29, 2012 at 12:32 pm |
  15. anjana

    50 years back we did not expect to do even this well. so congrats to brics

    March 29, 2012 at 1:21 pm |
  16. Marco Hsiao

    However it is very possibly in 2020, the GDP of Brazil, Russia and India will surpass Britain, France and Italy.

    March 29, 2012 at 2:13 pm |
  17. cnnitnews

    You mean they already did it in GDP (PPP). For example in russia gas costs 3 times cheaper then in UK so they can buy same amount of gas for less dollars.

    March 29, 2012 at 5:12 pm |

    well said

    March 29, 2012 at 11:00 pm |
  19. sameh

    See the elephant is dying and die a very sad situation

    March 30, 2012 at 11:37 pm |
  20. mottavictor

    why bother with only considering GDPs' measurements of economic growth if the HDI of the BRICS is lagging behind?

    August 7, 2012 at 4:46 am |
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    September 21, 2012 at 2:13 pm |

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