BRICS - Challenges and Opportunities

Date of the event: 06/09/2015 - 09:00 to 06/10/2015 - 18:00


From June 9th-10th, FGV Growth & Development, a Center at FGV, organized the first international seminar "BRICS: Challenges and Opportunities" in order to discuss the future, diversity and integration of the economies of BRIC members (Brazil, Russia, India, China and South Africa), the geopolitical strategy of China, opportunities for Brazil, and the growth challenges faced by the bloc. The opening of the event was attended by Carlos Ivan Simonsen Leal, FGV's president; Rubens Penha Cysne, director of FGV’s Brazilian School of Economics and Finance (FGV/EPGE); and Pedro Cavalcanti Ferreira, director of FGV Growth and Development and professor at FGV/EPGE.

Pedro Cavalcanti confirmed the importance of the Center, which was created to foster more research in seeking answers to multiple questions. "Our goal is to understand the reasons why some countries become rich and others are left behind, as well as the miracles of growth, among other topics," he said. FGV's president then highlighted some important points to discuss about the BRICs, including what this group really means in economic and geopolitical terms.

The seminar, given in English, included a panel presented by João Victor Issler and Roberto Castello Branco, FGV Growth & Development's directors, about similarities and differences among the BRICs, highlighting the coincidence of the economic cycle among these countries.  According to Castello Branco, although the growth of the BRICs group has sharply slowed down since 2011, it is made up of important economies which represent 29% of the world's gross domestic product (GDP), with great potential for growth, especially China. "China is actively developing initiatives to gain global power, both in the financial and political worlds, and challenge the United States' leadership. These countries have organized themselves into a formal group. We still don't know its results: whether [the group] is only one piece of the chessboard or whether it is really a mechanism that will stimulate greater economic integration among these countries and real gains," he emphasized.

Castello Branco also commented that the countries present several common characteristics of emerging economies, although there are differences in experience regarding the market economy and economic structures. "Brazil seems more like a mature, developed economy with more consumption, services and urbanization, compared to China which has more investments and less consumption, more industrial activity and fewer services. India is the same. Brazil is an economy closed to international trade, while the others are open, which suggests an important source of low productivity in Brazil. It lacks spirit and competition," he said.

Next, there was a debate on the BRICs and geopolitics, with the participation of Jonathan Fenby, from the British consulting firm Trusted Sources; Octavio Amorim Neto, a professor at the Brazilian School of Public and Business Administration (FGV/EBAPE); and Oliver Stuenkel, coordinator of FGV's School of Social Sciences (FGV/CPDOC) and the Global Public Policy Institute, a research institution based in Berlin. Stuenkel has recently launched the book on the topic, "The BRICS and the Future of Global Order", which provides a definitive historical reference.  The work presents a chronological narrative and an analytical account of the inception of the BRICs concept from its origin in 2001 to its current political grouping. It also analyzes what the rise of these powers means to the future of global order.

On the second day, Murilo Ferreira, CEO of Vale (Brazil’s major mining company), and Mauricio Mesquita, from the Inter-American Development Bank (IDB), talked about the economic relationship between China and Latin America.  Although Murilo Ferreira presented data showing the decline of China's GDP growth rate over the past year (up only 7% in the first half of 2015), he seemed optimistic about the country's future. Vale's president says that the Chinese government is acting promptly to boost the domestic market and create demand for its products and services abroad.

The following panels were about India and South Africa, with Eswar Prasad from Cornell University, and Jean-François Brun, from Université d'Auvergne, both associate researchers with FGV Growth and Development. The seminar ended with a panel on the growing challenges of China, with Yang Yao, from Peking University, and Fernando Veloso, from the Brazilian Institute of Economics (FGV/IBRE).