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Gold BRICS Ahead?| Opinion by *Lardius Venter
BRICS building for the future
Many prominent economists have recently criticised the entry of South Africa into the BRICS group of emerging economies, citing SA’s slow rate of growth and relatively small size compared to the other members, as good reasons to advance this negative argument, and bloggers have also jumped onto this
Among these people is Felicity Duncan who recently wrote an article claiming that the BRICS nations were not homogenous, and that South Africa was a “sore thumb in the group in economic terms.”
She claims the group is mismatched politically, socially and economically, but fails to see the benefits of grouping these countries in terms of manufacturing, raw materials, currency exchange and food production.
“The EU makes sense –the countries are proximate, they’re all liberal democracies, and they share a common economic future,” according to Duncan.
But they aren’t doing very well, are they?
The fact of the matter is that while China, Russia, India, South Africa and Brazil are geographically dispersed, when it comes to finance, banks and linked stock exchanges, it’s all about a globally connected computer-based economy. And unlike the EU, BRICS countries don’t have common borders, so their immigration problems are far less.
On a political level all five BRICS nations have (somewhat of) a democracy, and while corruption is present, it is present in the West also. At least, in China, public officials are executed for wrongdoing, and corruption is not simply
Socially, the BRICS countries have very little interaction because there are no common languages. Which greatly simplifies doing business in many ways because there is little digression from the business at hand. And learning about other cultures is also interesting.
All the BRICS nations have some manufacturing capability - Africa and Russia have vast mineral and energy resources. Brazil is a major food and commodity supplier. China and India combine to form the manufacturing powerhouse of the world.
In many ways the BRICS equation fulfils the supply and demand curves for gold, iron ore, coal, manufactured goods and many other goods and resources. Trade between the BRICS countries is increasing rapidly.
The BRICS structure also provides additional security for its member nations in these troubled financial times. Confidence in the US dollar is eroding as the FED continues to pursue its policy of aggressive quantitative easing. The debt situation in Europe is also giving cause for concern.
While the world’s current problems may well eventually be solved with ongoing monetary
Should this ever become necessary, the BRICS group may well provide rare areas of stability in what is certain to be a very troubled world indeed. So be nice to us.
* Lardius Venter is a fat layabout who has never worked a day in his life. He has turned to blogging in the mistaken belief that his misguided views will make a difference.