G- 8 versus BRICS

 G-8 - a forum for the governments of eight of the world's wealthiest countries, excluding Brazil 6th, India 9th and China 2nd. is meeting in Irland today.The forum was established in 1975 summit hosted by France.

G8 today is facing criticism for its failure to resolve conflict in Syria, reduce globalization problems such as Third World Debt, global warming, the Aids epidemic, lack of transparency, tax inequality where certain global companies such as Amazon, Google and Apple do not pay tax in markets where they earn huge profits and trade liberalization between USA and EU.

Critics say the G8 has now become unrepresentative of the world's most powerful economies. In particular, China has surpassed every economy but the United States, while Brazil has surpassed Canada and Italy acc. to IMF. India is already larger than Brazil, and according to the IMF and the CIA Factbook, has surpassed Japan in terms of purchasing power parity. This has given rise to the idea of enlarging G8 to the G8+5, which includes these other economically powerful nations. (Source:Wikepedia)

The BRICs countries consisting of Brazil, Russia, India and China had a financial summit in South Africa last March and tackled major projects designed to challenge the existing financial systems. It has agreed to dump the Euro and create its own development bank.

The BRICS nations financial summit in South Africa from 26 to 28 March is officially called "BRICS and Africa: Partnership for Development, Integration and Industrialisation".

In this financial meet, the heads of the emerging economies – Brazil, Russia, India, China and South Africa (BRICS) – agreed to cut their foreign currency reserves in euro, having sold €45 billion of the currency in 2012, according to data gathered by the International Monetary Fund.

After the cut, the euro represents just 24% of the BRICS foreign reserves, the lowest level since 2002 – the year when euro coins and banknotes first entered circulation – and down from a peak of 31% in 2009, according to reports in the financial press.

The move reportedly due to the developing world’s disillusionment with the status quo of world financial institutions. The World Bank and IMF continue to favor US and Europe over BRICS nations. And in 2010, the US failed to ratify a 2010 agreement which would allow more IMF funds to be allocated to developing nations.

Once a loose political affiliation, the BRICS bloc is now a serious economic contender in the world economy, representing 40% of the world’s population, and accounting for one fifth of global GDP.

The five countries hold foreign-currency reserves of $4.4 trillion (€3.4 trillion), and need an institution to safeguard this tremendous wealth. The reserve will also protect members from short-term liquidity volatility and balance-of-payment problems.

Is the G-8 coming together with BRICS for a better and more effective global management of the world's resources and fair distribution of wealth and profits. This is a question that defies any easy answer.

When leaders of the world's wealthiest countries meet to decide on the fate of the less wealthy, the poor and the deeply-marginalised countries whose state of poverty remains unchanged and whose freedom from wars and ethnic conflicts is the least priority, one wonders what these organizations really achieve other than securing its members' continued access to wealth and power.#