`BRIC' Nations Summit Seeks to Turn Economic Might Into Clout

First came the booming economies. Then came the rush of investors. Now the so-called BRIC nations -- Brazil, Russia, India and China -- are talking about forming a political alliance.
The four largest emerging economies are sending their foreign ministers to Yekaterinburg, Russia, to meet on May 16 for the first time outside the venue of the United Nations. On the agenda are such non-economic issues as weapons proliferation, counter-terrorism, energy and climate change.
The term BRIC was coined by Jim O'Neill, London-based chief global economist at Goldman Sachs Group Inc., in 2001. Last year the combined gross domestic product of the four nations made up 12 percent of global GDP, up from 8 percent in 2000, according to the International Monetary Fund. In the past two years stocks in the BRIC nations have risen 70 percent, versus the 42 percent increase of emerging markets overall.
``It's really a group that first existed as a concept in the minds of analysts and subsequently came to exist as a practice between the countries,'' Brazilian Foreign Minister Celso Amorim said in a May 8 Bloomberg Television interview in Brasilia. ``The meeting is recognition of the fact that we are four big economies with a large influence in the world.''
President Nicolas Sarkozy of France has recommended adding at least China, India and Brazil -- as well as Mexico and South Africa -- to the Group of Eight leading industrialized countries rather than inviting them as guests to summits. Russia is already a G-8 member.
Beating Germany
China, the world's most populous country, is expected to overtake Germany as the third-largest economy this year, the IMF says. India is the world's largest democracy. With 10 straight years of economic growth, Russia is the world's biggest energy exporter, while Brazil is the No. 2 food producer after the U.S.
As a whole, the BRIC economies may surpass those of the G-7 countries -- the G-8 minus Russia -- by 2035, O'Neill said in a Goldman report last November. In a May 12 interview, he said that including the countries in the G-8 would be ``a recognition of the modern reality.''
O'Neill, 51, who gives talks to multinational companies on investing in emerging markets, said the invention of the term BRIC and its subsequent popularity have ``transformed my life.'' Five years ago he had never been to most of the BRIC countries, he said. Now he travels to all of them once or twice a year.
The BRIC ministers have already met at the UN General Assembly in 2006 and 2007. Chinese Foreign Minister Yang Jiechi is holding talks with Russian counterpart Sergei Lavrov and Pranab Mukherjee of India before the arrival of Brazil's Amorim.

Iran Pressure
Russia and China, both permanent members of the UN Security Council, have played key roles in pressing on Iran to rein in its nuclear program. China also has been influential in the six- party talks aimed at persuading North Korea to abandon its nuclear weapons program. Kim Jong Il's regime began disabling its plutonium-producing nuclear reactor at Yongbyon under the supervision of U.S. inspectors in November.
``Besides the economic front, the BRIC group could prove to be a growing counterweight to U.S. hegemony in global affairs,'' Win Thin, an analyst at New-York-based bank Brown Brothers Harriman & Co., wrote in a May 12 e-mail.
Russia wants BRIC to become a ``notable factor in multilateral diplomacy,'' to help strengthen ``multi-polarity,'' acting Russian Foreign Ministry spokesman Boris Malakhov said in a statement. He said Moscow saw the talks as a way to bring the four countries closer together on the world stage.
Dialogue
``Through this informal arrangement, the four nations will understand each others' policies, discuss common factors and issues and leverage their positions through dialogue,'' said Sujit Dutta, a strategic analyst at Institute of Defense Studies and Analyses, a New Delhi-based research institution. ``With this forum they will try to raise their global profile.''
O'Neill himself said there are limitations to the BRIC concept. For example, Brazil -- the world's biggest producer and exporter of coffee, sugar and orange juice -- may not be the only Latin American country that belongs in the grouping. Mexico could also be a contender, along with South Korea, he said.
Lately, China and India have taken measures to cool inflation spurred by higher energy and food prices as a weak economy in the U.S. hampered exports. Russian growth could slow from 8.1 percent, the Finance Ministry has said. The Brazilian economy may expand 4.6 percent this year, down from 4.7 percent according to a central bank survey published in April.
Though BRIC investments have done well in recent years, they are looking less solid lately. Since Dec. 31, the MSCI Emerging Markets BRIC Index has fallen 5.3 percent -- more than the 3.1 percent decline in MSCI's Emerging Markets Index.