BRIC meeting demonstrates the change in international finance relationships

Brazil, Russia, India, and China, (BRIC's), had their second economic summit in Brazil. The IBSA or India, Brazil and South Africa also meet separately in Brazil. They are four trillion dollar plus economies not part of the OECD and represent 40% of the world population. From a simple description coined by Goldman Sachs, the BRIC seems to want to find a common political ground for addressing economic issues. They are large, growing, and control a significant portion of all international reserves. They are a force that must be listened to, yet it is not clear what they want from the rest of the world.

They do not have a lot in common. Two are authoritarian governments. Two are democracies. Two are very rich in commodities while two are large consumers. Three have growing populations while the fourth is shrinking. Yet, there seems to be a common bond or belief among them that the world economic order should not be ruled from Washington or any other capital in the G7. Additionally, their belief is that the G20 seems to be an unwieldy forum not weighted by economic might.

So what will be the goals of this group? The results are still fuzzy. They will not discuss the elephant in the room of Chinese currency adjustments. They did discuss increasing trade and linking trade to local currencies; however, it is hard to see how some of this will occur given the currency adjustments that are necessary with the yuan.