BRICS and the Caribbean

INTERNATIONAL RELATIONSOF THE CARIBBEAN

BRICS emergence and presence in the Caribbean

Dr. Jacqueline LAGUARDIA MARTINEZ

BRICS: New International Actors• BRIC configuration started on economic

projections• Middle powers• Regional leaders• Fastest-growing countries• Engines of the global recovery process• International roles• Diplomatic activism• Opportunity: Global vacuum

Fuente: Sachs, Goldman, Global Economic Papers No. 99, 2003

BRICS countries (2010)

• More than 40% of the global population (work force)

• Nearly 30% of the land mass• 25% of the world GDP in PPP terms• 43% forex reserves• Major destinations for FDI • Large economies• Increasingly important role in meeting global

demands for capital

Suresh P. Singh in BRICS and the World Order: A Beginner’s Guide


BRICS % GDP increase (2008-2013)

Source: CEPAL, en Jonathan Quirós Santos


A long-term vision for BRICS: Submission to the BRICS Academic Forum, 2013

BRICS within



Source: UNCTAD, The rise of BRICS FDI and Africa, 25 March 2013


FDI trends• BRICS have emerged as major recipients of FDI and

important outward investors• Overseas investment is mainly in search of markets in

developed countries or in the context of regional value chains

• Some 43% of BRICS outward FDI stock is in respective neighbouring countries in Latin America and the Caribbean, East Asia, South Asia and transition economies (40% in the case of Brazil)

• Economic linkages through FDI between BRICS countries themselves are still limited, although intra-BRICS FDI has grown faster than flows to non-BRICS over the past decade

Intra-BRICS FDI





Natural resources (2005)

Source: Wealth of Nations in Lucas Ferraz Vasconcelos, Cambio estructural en Brasil: Una experiencia latinoamericana

International projectionBRICS have been able to transform their economic power into international political influence•Members of major international and multilateral institutions, such as the WTO, the UN, the G-20 and the UN Framework Convention on Climate Change, and are very active participants therein.•Involvement in Global Issues: Reform of the UN Security Council (UNSC), reform of international financial institutions, namely the IMF and the World Bank, Doha Round, Climate Change (BASIC countries)•Create a Developing Bank


BRICS Summits

I. Russia (June 2009)

II. Brazil (April 2010)

III. China (April 2011)

IV.India (March 2012)

V. South Africa (March 2013)

VI.Brazil (2014)

Origins and evolution2001: BRIC denomination (Goldman Sachs)

2006: The Dow Jones introduces the BRIC 50 Index, a basket of the 50-biggest companies listed on the stock exchanges of Brazil, Russia, India and China

2006: Formalization with the First Meeting of the BRIC foreign ministers as a side event to the 61st UN General Assembly in New York

2008: BRIC Heads of State/Government meeting

2009: First summit in Yekaterinburg, Russia

2011: South Africa incorporation


Common principles of the group• Mutual respect and non-interference in each other's

internal affairs;• Non-confrontation;• Opposition to the use or threat of force in international

relations;• Centrality of multilateralism on global issues;• Mutual respect for each other's choice of development

path;• Openness;• Pragmatism;• Solidarity;• Non-bloc nature;• Neutrality with regard to third parties

But…• Increasing military budgets• Nuclear powers (Russia, China and India)

Problems within1. The group is not a natural fit: heterogeneous nature

and lack of cohesive identity2. Differences on values, economics, political

structures and geopolitical interests3. Inadequate infrastructure: energy;

telecommunication; transport (particularly road and rail); and access to improved water and sanitation

4. Infrastructure challenge is also about regional infrastructure development

5. Fragile nature of trade and investment linkages6. Lack of skilled workforce



Fallacy?Not only because an expected relative decline in growth rates, but:•Incapacity of performing an effective diplomacy (not able to fashion a coordinated response to various global challenges)•China and Russia have little incentive to seek a change in the global political institutional fabric•Corruption•South Africa?•Overhyped from the start•Structural disparity between China and the rest

Interesting for BRICS’ international ambitions

CARICOM member states represent 7% of the UN General Assembly votes and 44% of OAS votes

New BRICS members?

Indonesia is tagged to be the next BRICS

It is the largest economy in South-East Asia with strong links to both China and India and the world’s fourth most populous nation

New acronyms

• IBSA: Brazil, India and South Africa

• RIC: Russia, India and China

• BASIC: Brazil, South Africa, India and China

• CIVETS: Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa

• Next 11 or N-11: Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea and Vietnam

• MIST: Mexico, Indonesia, South Korea and Turkey

Process of confrontation, negotiation and co-operation

• Bilateral trade tensions: In the WTO, the largest number of complaints against the Chinese have been initiated by Brazil, with India also seen as a threat to Brazilian producers in the steel and software sectors

• Progress in the area of facilitating trade: Two agreements were signed at the 2012 BRICS summit: the Master Agreement on Extending Credit Facility in Local Currency and the Multilateral Letter of Credit Confirmation Facility Agreement

• Other areas for co-operation: food security, R+D, culture exchange, tourism

Interesting facts• China emerged as Brazil’s largest trading partner: Is this

economic relationship harmful for Brazil’s industry, with China mainly importing commodities and flooding the Brazilian market with cheap manufactured goods?

• China has also become the largest trading partner for Russia and South Africa; and the second-largest partner for India

• China and Brazil are competitors in South America• Sectoral level: China will dominate in manufactured goods,

India will control services, and Russia and Brazil raw material supplies. South Africa could emerge as an important mineral supplier

• China’s currency manipulation has being criticized by Brazil

Real green economies, conference at Wilton Park, UK, February, 2014

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BRICS and the Caribbean

Economy & Finance