1. The term "BRIC" was coined by economist Jim O'Neill in 2001 in a paper titled "Building Better Global Economic BRICs". Neill, who is considered the best foreign exchanges economist in the world currently, argued, that in 2007 real GDP growth in large emerging economies will be higher than the G7 countries. The four countries constituted 23.3% of the world's GDP in 2000 (based on purchasing power parity basis with the US dollar). China, in GDP terms, was even bigger than Italy. The importance and significance of these countries would grow over time, and it would be apt to add them to G7 for better international policy making, Neill argued. South Africa was added to the four countries in 2000 to form BRICS. Currently, speculations are on over other countries like South Korea, Argentina, South Korea, joining.
2. The first summit was held in June 2009, with the respective leaders from all the four countries attending. At the meeting, the countries discussed the dire state of global economy and the need to repair it. That would mean a repairing of global financial institutions. The summit also spoke of a need for a more stable and predictable global reserve currency, which is the US dollar at present.
3. The current meeting is being attended by the five heads of the states – Dilma Rousseff (President, Brazil), Vladimir Putin (President, Russia), Narendra Modi (Prime Minister, India), Xi Jinping (President, China) and Jacob Zuma (President, South Africa) – and will go on from July 15-17.
4. The leaders will finalise on two major initiatives in this summit. One, they will float a $100 billion new currency fund and a $50 billion development bank. These are mainly to counter the Western-dominated global economic governance that is mainly being spearheaded by the International Monetary Fund (IMF) and the World Bank. However, the countries are still negotiating over the shareholding pattern. India has proposed a shareholding pattern that would match the economic contribution in the funds.
The Bank would not have policy compulsions for borrowing members unlike the IMF and World Bank, and could be used to make the global system more equitable. A separate $50 billion infrastructure fund, will fund infrastructure projects, and provide an alternative to these countries. The project would take a year to be implemented after the legal formalities are complete.
5. The countries are all currently focused on their domestic priorities. Since India has just seen a change in government, PM Modi will first have to figure out policy changes domestically. Russia is concerned about Ukraine as well, and Brazil is fighting its own economic woes.
One of the most important things to watch out for would be India-China negotiations. It will involve the setting up of the headquarters of the Development Bank, for which both countries will battle till the end. Two, are the security concerns of India along its Northeastern border. The countries must resolve the security issues to form any meaningful economic collaboration on the international stage.