On Tuesday, June 16, Chinese President Hu Jintao, Russian President Dmitry Medvedev, Brazilian President Luiz Inacio Lula da Silva and Indian Prime Minister Manmohan Singh are attending the first-ever Summit meeting of the BRIC countries in the Ural city of Yekaterinburg, Russia.
BRIC, a fresh new word emerged in recent years, is created with the first letter of the English names of the four big developing countries of the contemporary world, namely, Brazil, Russia, India and China. Nevertheless, BRIC has become a very popular term all over the world nowadays.
BRIC countries are all important emerging nations and the driving forces for the world's common development with their big populations and vast territories. They are now amid a historical period for rapid economic growth or rejuvenation. With 42 percent of the global population, the four BRIC countries currently turn out 15 percent of the world's gross domestic product (GDP) and 12.8 percent of the global trade volume, and they contributed greater than 50 percent of world economic growth in 2008.
To view from the angle of civilization or cultural evolution, the rise of the four BRIC countries forebodes the more diversified, enriched and colorful development of the human civilization.
As is known to all, the current financial crisis has originated in the United States and spread elsewhre on the globe rapidly due to the vital role of American economy in the world economy and the U.S. dollar's status as the global economy's sole reserve currency. The worsening financial crisis shows the imbalanced growth of the present world economy and implies the failure of the existing economic order and financial setup to comply with global economic order and financial structure.
The current first-ever "BRIC Summit" will step up coordination and cooperation, enhance the macroeconomic policy coordination, combat protectionism and spur the reform of international financial institutions from the very top levels.
In order to cope with the global financial crisis and promote the recovery of world economy, varied mechanisms for multilateral coordination have been tried out, such as the Group of 20 London financial summit held in early April, and this BRIC Summit also constitute part of the global effort taken in this regard.
The ongoing BRIC Summit has two marked points worthy of observation. First, people worldwide are eager to see how BRIC Summit participants will appraise the U.S. dollar. Since the end of World War II in 1945, the U.S. dollar, which was pegged with the gold price at first, has been reserve currency most used in international transactions due to the comprehensive national strength and status of the United States. And a sudden jump in the price of gold after central banks gave up on controlling it, however, was a strong sign of a loss of confidence in the dollar as the international reserve currency.
Since the outbreak of the current financial crisis, the confidence and role of the U.S. dollar have been further impaired, and it has been skeptical and widely questioned if the dollar would go on serving as the global reserve currency. Meanwhile, the BRIC countries have begun to increase their hold of international monetary fund (IMF) bonds, so as to seek a stronger voice in global financial institutions while prompting the U.S. to take a more responsible approach.
As a matter of fact, the "de dollar" process has already begun in many regional bilateral and multilateral trading arrangements among developing countries. In fact, changes evolved in the role and functions for the dollar would undergo a relatively lengthy process.
Secondly, people are also eager to see whether the BRIC Summit will be turned into a mechanism with a joint action to take in key markets or it is merely a forum. Judging from the present situation, nevertheless, the BRIC Summit is a platform to engage in dialogue and communications but there is only a step toward taking joint action from reaching consensuses and a mutual-understanding.
Any grave economic crisis would imply the redrawing of a global economic map and an economic order in modern world history, however, and this is absolutely inevitable and independent of man's will. In the current deteriorating financial crisis, the situation looks better in the BRIC countries and their role has inclined to leap in the global economy. So, there is some ground for analysts to predict that BRIC emerging countries are likely to take the lead in stepping out of the global economic recession, or would lead the world economy out of its recession.
By People's Daily Online and contributed by senior PD desk editor Huang Qing
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