:00:00. > :00:00.has collapsed after a devil fitting fire. Firefighters tackled the blaze
:00:00. > :00:00.at the 300-year-old welding. Now on BBC News, it's time for Talking
:00:07. > :00:10.Business. In October the leaders of Brazil,
:00:11. > :00:13.Russia, India, China and South Africa came together
:00:14. > :00:15.here in India. The BRICS grouping was formed
:00:16. > :00:18.to challenge the old world order and reshape the global economy
:00:19. > :00:20.but what has the alliance achieved That's what we'll be discussing
:00:21. > :00:43.on this week's Talking Business. I'm Yogita Limaye in
:00:44. > :00:48.the Indus Art Gallery in Delhi. India is the fastest-growing major
:00:49. > :00:51.economy in the world with a growth Government spending,
:00:52. > :00:57.low oil prices and economic reforms have all contributed but problems
:00:58. > :01:00.like corruption and generating employment for the large population
:01:01. > :01:05.remain big challenges. Still, it's quite a turnaround
:01:06. > :01:08.from just a few years ago when many had pegged India to be
:01:09. > :01:12.the first BRICS to fall, but other members of this club
:01:13. > :01:15.of emerging economies Brazil's economy crashed
:01:16. > :01:24.spectacularly in the past two years with low commodity prices,
:01:25. > :01:27.also a very serious Analysts believe when this recession
:01:28. > :01:34.is over a year from now, Brazil's economy will have
:01:35. > :01:38.contracted almost 10%. The bad news is that recovery
:01:39. > :01:41.is set to be very slow because unemployment and inflation
:01:42. > :01:49.are still running very high. Slow growth, rising inflation,
:01:50. > :01:54.a volatile currency and investor Mining and manufacturing showing
:01:55. > :02:00.signs of trouble and social All these have raised
:02:01. > :02:05.concerns of a credit ratings The Russian economy kept contracting
:02:06. > :02:14.this year but at a slower rate. The most optimistic predictions call
:02:15. > :02:18.for a 0.5% growth rate Russian budget may have become less
:02:19. > :02:24.dependent on selling oil and gas Two thirds of Russian foreign trade
:02:25. > :02:30.are energy exports and with oil prices relatively low,
:02:31. > :02:33.balancing state books may be difficult but on top
:02:34. > :02:37.of that there are western sanctions. Experts debate to what extent
:02:38. > :02:41.they harm the economy but they don't The Chinese economy is growing
:02:42. > :02:49.but at a slower rate. It's in transition from
:02:50. > :02:52.an export-led model to one driven Out with clothing manufacturing,
:02:53. > :02:58.in with service industries. It's mostly money owed by one arm
:02:59. > :03:03.of the Chinese government to another, leading some to suggest
:03:04. > :03:06.that fears of a Chinese debt So with so many different
:03:07. > :03:17.problems and a grouping that is in quite a nascent stage,
:03:18. > :03:20.what can be achieved? We will discuss that
:03:21. > :03:24.with our panel of experts here. Arvind Vohra, the chief editor
:03:25. > :03:28.of Gionee India, Narendra Murkumbi, the co-founder and managing director
:03:29. > :03:31.of Shri Renuka Sugars, Alka Acharya, professor
:03:32. > :03:34.at Jawaharlal University in Delhi and Brahma Chellaney,
:03:35. > :03:37.professor at the Centre Mr Murkumbi, can I come
:03:38. > :03:41.to you first? You're an Indian company
:03:42. > :03:45.with significant assets in Brazil. Do you feel like the BRICS grouping
:03:46. > :03:49.has helped your business? So far not really because I think
:03:50. > :03:53.it's a label invented by an Englishman for an American
:03:54. > :03:58.investment bank and was not The first real signs of the grouping
:03:59. > :04:07.being useful and effective for business is in the creation
:04:08. > :04:11.of the BRICS Bank and if that is going to assist projects
:04:12. > :04:15.across the BRICS countries, especially those investments
:04:16. > :04:19.from one BRICS country to another, that would probably
:04:20. > :04:22.be very interesting. You're a Chinese manufacturer that
:04:23. > :04:27.wants to make in India and sees it Has the BRICS grouping
:04:28. > :04:34.being beneficial to your company? BRICS is a word, it stays
:04:35. > :04:43.at the back of your mind. You Feel good being a part of that
:04:44. > :04:46.group because it seems elitist As far as our business is concerned,
:04:47. > :04:51.China is a big market and for us as a group we look at India
:04:52. > :04:54.as a second home. Being at partner to Gionee
:04:55. > :04:58.and being brought up in this country, my idea is to get a bite
:04:59. > :05:04.of the mobile manufacturing that is currently in China and bring
:05:05. > :05:08.it to India. What has this grouping
:05:09. > :05:11.really achieved? We've seen the eighth
:05:12. > :05:14.BRICS summit this year. We start by saying what was
:05:15. > :05:21.it meant to achieve? If you go back to whence it
:05:22. > :05:25.all began, it was essentially a coinage by a gentleman
:05:26. > :05:30.who was looking at new investment destinations and that was not
:05:31. > :05:34.why BRICS came about, so we need to make a distinction
:05:35. > :05:37.between the acronym that came from Jim O'Neill and the grouping
:05:38. > :05:41.which came about because some countries, the BRIC and then BRICS
:05:42. > :05:46.countries, got together with a very different purpose and that purpose
:05:47. > :05:50.was to see how to leverage themselves as growing economies
:05:51. > :05:55.better in the current global economic and commercial
:05:56. > :05:56.architecture which gives On paper BRICS is an
:05:57. > :06:02.attractive concept. It brings together five countries
:06:03. > :06:07.that represent more than a quarter of the Earth's land mass,
:06:08. > :06:14.over 41% of the world's population, nearly a quarter of the global GDP
:06:15. > :06:19.and nearly half of the world's The BRICS is the first important
:06:20. > :06:28.non-western initiative It symbolises the
:06:29. > :06:36.partnerships of the world. You can call BRICS the R5
:06:37. > :06:41.after the names of the currencies of its member states -
:06:42. > :06:45.the rand, the real, the ruble, In reality, though, BRICS
:06:46. > :06:54.as a grouping still searching for a common identity
:06:55. > :06:58.and a common mission. It brings together very disparate
:06:59. > :07:02.countries who have little in common, they don't even
:07:03. > :07:06.have common interests. They have very different
:07:07. > :07:09.political systems, very different economies and very
:07:10. > :07:14.different national interests. For example, what is common
:07:15. > :07:17.between the world's largest autocracy, China, and the world's
:07:18. > :07:22.largest democracy, India? Their relationship is adversarial
:07:23. > :07:27.so creating a common mission in these circumstances
:07:28. > :07:34.requires effort. Right now BRICS is
:07:35. > :07:36.more of a talk shop. It brings together the leaders
:07:37. > :07:40.of its countries for an annual summit meeting but for BRICS to be
:07:41. > :07:47.an important institution globally, it has to come up with common goals
:07:48. > :07:52.and a common action plan. Thus far it's still struggling
:07:53. > :07:56.to create an institutional Do you think it's irrelevant
:07:57. > :08:02.at this point? I think what this grouping helped us
:08:03. > :08:11.as, within our global corporate, India has become more significant
:08:12. > :08:15.than it was before the grouping was there and you definitely don't
:08:16. > :08:21.ignore it, and at the same time you somehow feel if you're not
:08:22. > :08:25.there you're missing a big chunk of business and as you pointed out,
:08:26. > :08:30.the amount of potential this area has, logically this will happen,
:08:31. > :08:42.so in my opinion the grouping should be playing a catalyst role
:08:43. > :08:45.but as you said where is the role? For businesses like yours,
:08:46. > :08:47.for it to mean something on the ground and not just
:08:48. > :08:50.in theory, what is needed? What we're looking forward
:08:51. > :08:53.to the second phase of BRICS is some kind of preferential access,
:08:54. > :08:58.I mean like the professor just mentioned, 25% of world GDP,
:08:59. > :09:03.41% of population, so these five countries are to come closer
:09:04. > :09:06.together economically, that's the easy thing,
:09:07. > :09:08.politically I think we are very disparate and should not even go
:09:09. > :09:12.there but economically we can be much closer and together as five
:09:13. > :09:16.economies who were not part We could be a bigger force
:09:17. > :09:22.in the global economy and I see that as the next step for this group,
:09:23. > :09:29.and the creation of the bank is the first real sign,
:09:30. > :09:34.it is real money, $3 billion that has been committed and part has been
:09:35. > :09:38.invested and that would kick off some kind of definite economic
:09:39. > :09:43.grouping which could The only institution that
:09:44. > :09:55.brics has created so far is the BRICS development bank,
:09:56. > :09:58.but it's largely been hijacked by Because the interests of the other
:09:59. > :10:03.four member states of BRICS are largely symbolic,
:10:04. > :10:05.they underscore the rising economic clout, the emergence
:10:06. > :10:07.as global powers. China doesn't need that
:10:08. > :10:09.recognition as it has already It needs to push its financial
:10:10. > :10:13.interests and it has essentially turned the development bank
:10:14. > :10:17.into a tool for advancing Its interests primarily are centred
:10:18. > :10:24.on making its currency, the renminbi, an international
:10:25. > :10:29.currency which one day could rival It is now lending money to other
:10:30. > :10:38.BRICS countries in renminbi, so lending and trading
:10:39. > :10:42.in renminbi gives China clout, it gives it certain standing,
:10:43. > :10:49.it allows it to put its economy over us but apart from that one
:10:50. > :10:53.institution that has been created, BRICS has yet to create
:10:54. > :10:56.an institutional structure seven years after the first BRICS
:10:57. > :11:00.summit was held. In the next part of the programme
:11:01. > :11:05.we will focus more on India and China, the two countries that
:11:06. > :11:09.are still seeing fast-paced growth and we'll be asking whether perhaps
:11:10. > :11:13.they need to look at new alliances, but before we continue
:11:14. > :11:16.the discussion, here are some thoughts from our comedy consultant
:11:17. > :11:19.Colm O Regan on this When I heard that this
:11:20. > :11:26.week's talking point would be about the BRICS,
:11:27. > :11:29.I knew that even though the programme is a business
:11:30. > :11:31.programme and will be talking about the economies of Brazil,
:11:32. > :11:34.Russia, India, China and South Africa, that I would do
:11:35. > :11:38.the programme while standing I know you're not the kind of people
:11:39. > :11:46.who are interested in buying a brick or if you do you buy
:11:47. > :11:48.them by the million. You are more interested in the brick
:11:49. > :11:51.countries and the person who coined the phrase,
:11:52. > :11:53.Jim O'Neill. The whole rationale
:11:54. > :11:58.for it was to symbolise the growing importance of big emerging economies
:11:59. > :12:02.in the world economic system and highlighting
:12:03. > :12:06.how unrepresentative I'm tempted as ever to try and chime
:12:07. > :12:13.in with Jim's analysis with some construction work brick-based puns
:12:14. > :12:18.of my own, something about cementing But I know instead it's Jim's views
:12:19. > :12:26.you want to hear. Compared with 15 years ago,
:12:27. > :12:32.the BRICS countries are all at least as big in terms of share of global
:12:33. > :12:37.GDP that I envisaged and in some cases, especially China,
:12:38. > :12:39.way bigger than Did the BRICS turned out
:12:40. > :12:45.as he expected? Anybody that thought these countries
:12:46. > :12:51.would always grow at the same rate either has no experience of thinking
:12:52. > :12:54.about these things or was just Country's growth rates are driven
:12:55. > :13:01.by their working age population But my question for Jim
:13:02. > :13:05.is if he was thinking of constructive terminology to coin
:13:06. > :13:09.a phrase, why did he pick BRICS? Why didn't he pick TILES,
:13:10. > :13:13.Middle Eastern countries, Turkey and Iran, Lebanon
:13:14. > :13:18.or Egypt, or TROUGHS. I can't think of
:13:19. > :13:21.anything for TROUGHS. The core concept of BRICS came
:13:22. > :13:26.around in my head from when 9/11 happened, which was about three
:13:27. > :13:29.weeks before I first wrote about the BRICS and that told me
:13:30. > :13:35.when that horrible event took place, strangely I thought there
:13:36. > :13:38.is something beyond the horror of the terrorist attack,
:13:39. > :13:41.there is something badly wrong with the world and for the world
:13:42. > :13:46.to sustain globalisation, it has to stop being essentially
:13:47. > :13:50.the same as Americanisation, which is what increasingly
:13:51. > :13:53.it was becoming. But is Jim worried about the fact
:13:54. > :13:56.that the growth rates of some Even though China has its own
:13:57. > :14:05.problems, China today is way ahead of where I thought it would be,
:14:06. > :14:09.including this decade, so even though China has slowed,
:14:10. > :14:12.it has not slowed by as much India today is growing
:14:13. > :14:17.at a faster rate in China. If you look at Brazil in the past
:14:18. > :14:22.few months there are some signs, and the markets smell this,
:14:23. > :14:26.that Brazil might be a better place for having gone
:14:27. > :14:28.through this turmoil. Russia, enormous problems
:14:29. > :14:32.and they still need to get to grips with the country that is dominated
:14:33. > :14:37.by oil and gas and too many lazy decisions based on the assumption
:14:38. > :14:42.oil prices would stay high forever. So there you have it,
:14:43. > :14:44.macro economics explained with the help of a humble
:14:45. > :14:47.rectangular lump of clay. Colm there and you can see more
:14:48. > :14:59.of his films on our website. We were talking about how India
:15:00. > :15:02.and China are the two economies in this grouping that
:15:03. > :15:05.are still fairly fast-paced but they're actually competing
:15:06. > :15:10.with each other much of the time, so do you think they can ever come
:15:11. > :15:13.together with a common If you see the amount of trade
:15:14. > :15:19.between China and India, especially in electronics,
:15:20. > :15:22.it's phenomenally large... This brings me to the
:15:23. > :15:40.core of the concern. That is when I subscribe to both
:15:41. > :15:46.of what you said, can this forum lead to a situation wherein that
:15:47. > :15:49.lopsidedness can change? Can we cooperate with one part
:15:50. > :15:53.of the world which might need services from us while we may not
:15:54. > :15:57.realise we have fairly big institutions now out
:15:58. > :16:01.of India operating in China. We are not looking at the size
:16:02. > :16:10.of the opportunity. There is a lot China
:16:11. > :16:14.can bring to the table Manufacturing, the way it has moved
:16:15. > :16:19.from China to Vietnam, Can favourable relationships plug
:16:20. > :16:30.those gaps and that is where A common concern in four
:16:31. > :16:37.of the five BRICS member states China manipulates its currency,
:16:38. > :16:46.it has hidden export subsidies and these two actions artificially
:16:47. > :16:51.lower the price of Chinese exports and this strategy of China
:16:52. > :16:58.is blighting manufacturing in the BRICS member states,
:16:59. > :17:06.especially in India and Brazil. Chinese dumping is really inimical
:17:07. > :17:08.to India's economic interests. Do you think there is a need
:17:09. > :17:11.for India to consider other alliances rather
:17:12. > :17:15.than putting energy into BRICS? India does not need to quit
:17:16. > :17:19.the BRICS but it has to bear in mind that BRICS has limited utility,
:17:20. > :17:25.that China, even as it seeks to promote its economic interests
:17:26. > :17:30.in the BRICS grouping, has its protectionist
:17:31. > :17:34.barriers to Indian and other BRICS members' exports,
:17:35. > :17:40.for example India-China trade, India's trade deficit with China has
:17:41. > :17:44.doubled in just the last two and a half years on Prime
:17:45. > :17:50.Minister Modi's watch. The difficulty India is facing
:17:51. > :17:53.in getting access to the Chinese market for its products,
:17:54. > :17:56.so India has to be realistic. I think these annual summit meetings
:17:57. > :18:01.of BRICS are more useful not in terms of advancing the BRICS
:18:02. > :18:03.agenda because there is no They are useful in having bilateral
:18:04. > :18:11.meetings on the sidelines as between India and China
:18:12. > :18:15.on the various disputes and concerns that bedevil the China-India
:18:16. > :18:20.relationship, so the summit meetings have some utility but more in terms
:18:21. > :18:26.of bilateral interactions. If we look at it in terms
:18:27. > :18:29.of a process of transition that is under way, I think these
:18:30. > :18:34.countries are trying to engage with each other first and resolve
:18:35. > :18:39.some of the more important issues before, I think this informality
:18:40. > :18:44.itself gives it a dynamism which can There is an enormous scope in doing
:18:45. > :18:50.trade directly in each other's currencies, in fact
:18:51. > :18:53.that is what China and Russia have signed this huge gas deal,
:18:54. > :18:57.India and Russia used to do business in rupee-ruble trade and these
:18:58. > :19:01.are ways in which they are trying to bypass the restrictions
:19:02. > :19:04.that come in. I would completely go along
:19:05. > :19:07.with what has just been said that India and China are the linchpin
:19:08. > :19:16.of this in part emerging age and dynamic but that
:19:17. > :19:18.investment has to diversify, we need to think in terms
:19:19. > :19:21.of joint ventures. That is not moving fast enough
:19:22. > :19:25.and we don't have anything If you look at China,
:19:26. > :19:34.American trade they were as bad in terms of the deficit
:19:35. > :19:37.as we are today so we need to see The fact of the matter is China
:19:38. > :19:45.can't do without the Indian market, and we can't do
:19:46. > :19:47.without the China market. If India has to get
:19:48. > :19:49.its back in place. How do we get this together
:19:50. > :19:52.is the question. Did you think it's more important
:19:53. > :19:56.to look at bilateral trade or bilateral agreements rather
:19:57. > :20:00.than look at a grouping The most important relationship
:20:01. > :20:08.of every BRICS member state is not with another BRICS member
:20:09. > :20:13.but with the United States, and the BRICS members share
:20:14. > :20:15.a common frustration about the status of the dollar
:20:16. > :20:21.as the world's reserve currency. They don't have a common
:20:22. > :20:24.response to diminishing the status of the dollar
:20:25. > :20:26.and that is what They are frustrated over
:20:27. > :20:35.dollar's dominance status, they want to weaken that currency
:20:36. > :20:38.status but then you evolve a common approach, you begin
:20:39. > :20:48.with a common action plan. The entire BRICS trade
:20:49. > :20:50.is still quite thin and everybody's main trading partners are the US
:20:51. > :20:54.and Europe, and the fact it is so small,
:20:55. > :20:58.the way it is so small is the real potential in the place
:20:59. > :21:01.where you can see maximum result. If you were to facilitate intra-
:21:02. > :21:04.BRICS investment, that would be the fastest kind of result
:21:05. > :21:07.you would get out of this grouping. The relevance of BRICS is now
:21:08. > :21:09.becoming significant in the wake of three factors,
:21:10. > :21:13.the global financial crisis which has shaken up the western
:21:14. > :21:27.world, we don't know how and how the western tectonic plate looks,
:21:28. > :21:29.that Brexit has is in a crisis, the capacity
:21:30. > :21:32.of these countries to invest in emerging economies
:21:33. > :21:34.is growing less. The second thing is the hegemony
:21:35. > :21:37.of the dollar and it's not just now, it's with the post World War II
:21:38. > :21:40.order and the setting up of the institutions that has been
:21:41. > :21:43.a consistent effort by these developing countries
:21:44. > :21:46.to find their place at the table. Third, the fact mentioned earlier
:21:47. > :22:02.that this is the largest population on Earth combined and I think
:22:03. > :22:08.the commonalties here are immense because let's not forget these
:22:09. > :22:21.are all not developed economies, in various ways, different
:22:22. > :22:22.countries differently placed. The challenges are similar
:22:23. > :22:25.in terms of how you provide employment to people,
:22:26. > :22:27.how you provide them with decent affordable housing, how you give
:22:28. > :22:29.them health and education. Investment in infrastructure,
:22:30. > :22:31.I think these countries are talking about how we use our resources
:22:32. > :22:35.amongst ourselves but at the same time developed world is also looking
:22:36. > :23:06.towards BRICS to provide the kind It's been a mild day out there and
:23:07. > :23:11.we're set for a mild night but where we see breaks in the cloud we could
:23:12. > :23:12.see mist and fog patches.