Big Four Emerging Economies Meet For First Summit

YEKATERINBURG, Russia (AFP)--Leaders from emerging giants Brazil, Russia, India and China were Tuesday set to hold the first summit of their informal BRIC grouping in a show of unity in the face of a sharp global slowdown.

The idea for the BRIC - Brazil, Russia, India, China - grouping was spawned after research by a U.S. investment bank suggested the four economies were developing at such pace they could be amongst the world's strongest by 2050.

Presidents Dmitry Medvedev of Russia, Hu Jintao of China, Luiz Inacio Lula da Silva of Brazil and Indian Prime Minister Manmohan Singh will meet in Yekaterinburg, a city some 1,420 kilometers east of Moscow in the Ural Mountains.

It remains to be seen whether the quartet will agree to create a more official format for the grouping, an idea that was never anticipated when the original research was undertaken by Goldman Sachs of the U.S.

Russia has taken a leading role in promoting BRIC, evidently happy with the idea that it remains an economic force despite seeing its high growth rates of recent years savaged by the worst global economic crisis since the 1930s.

Analysts say that despite - or perhaps because of - the economic crisis, BRIC nations are displaying a growing willingness to coordinate their efforts as they seek to counter U.S. global domination through the ubiquitous dollar and forge a bigger role for themselves.

The BRIC states are expected to be major buyers of the very first bonds that the International Monetary Fund is working to issue, in line with commitments by developed and developing economies to provide $1.1 trillion to the IMF and other global bodies to help the poor through the crisis.

China has said it is considering buying up to $50 billion of the new financial instrument, while Russia and Brazil could buy up to $10 billion each.

Both Russia and China have in recent months come out in favor of revamping global financial structures, saying there is a need for a new supra-national currency besides the dollar to prevent a repeat of the global economic crisis.

Moscow in particular has sharply criticized the dollar's role as the dominant global reserve currency.

"The rising BRIC investment in IMF bonds paves the way for closer and greater involvement and influence by BRICs - or putting their money down where their BRIC ambitions are in the IMF and World Bank," said Jan Randolph, head of sovereign risk analysis at IHS Global Insight.

But analysts are skeptical that the BRICs can create a new reserve currency or act as a tight economic or financial entity any time soon, even as they acknowledge the importance of the group's first gathering.

Rory MacFarquhar, a Moscow-based economist at Goldman Sachs, said the significance of the summit would be political rather than economic.

"There's considerable interest - you could say from all (the BRIC) countries but Russia in particular - in creating an alternative" to established international organizations, he said.

He added that Tuesday's high-profile meeting would be part of the Kremlin's "crusading against anything it considers unipolarity" - another way of describing U.S. domination.

Of the major economies, powerhouse China is seen as having the best shot at eclipsing the U.S. as the world's largest market.

The BRIC leaders first met informally on the sidelines of a Group of Eight major economies summit in Toyako, Japan, last year.

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June 15, 2009 23:16 ET (03:16 GMT)


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