This weekend, China will be hosting the annual BRICS summit – a meeting of leaders from five developing nations including Brazil, Russia, India, China and South Africa.
Lourdes Casanova, academic director of Cornell University’s Emerging Markets Institute, says that political and economic instability in Brazil and South Africa has solidified China’s lead position at the forum.
“The recently launched New Development Bank with an initial authorized capital of $100 billion is one of the clear marks of the nations’ cooperation so far. The bank is already funding seven projects for a total value of $1.5 billion in loans.
“Political instability has caused economic hardship in both Brazil and South Africa resulting in a much weaker international position for both countries; both were given an extension till the end of the year to join the China-led Asian Infrastructure Investment Bank.
“Hence, China’s position as the leader for the group is becoming stronger but the BRICS group needs to balance their differences and the economic imbalances to maintain cohesiveness and stay productive.
“Before traveling to China this week, President Temer of Brazil launched a multibillion-dollar auction plan to offer investors infrastructure concessions, operating licenses for airport, oil and power rights. China is already deeply invested in the Brazilian economy and Temer’s privatization program will open even more opportunities.”