I Threw a BRIC In The Window

The four BRIC countries - Brazil, Russia, India, and China - are trying to move from a random acronym first decribed by an economist at Goldman Sachs (boooo!) to an actual trading bloc. Emerging Economies Meet In Russia

Leaders of the four largest emerging market economies discussed ways to reduce their reliance on the United States at their first formal summit meeting on Tuesday. But they concluded with only a cautious statement suggesting a move away from the dollar’s role in global commerce and a call for greater representation of developing countries in global financial institutions.

That's nice. Is it rude to point out that three of these four (India being the exception) have repeatedly expressed semi-hostile views about the United States, including Brazil's Lula blaming the financial crisis on "blue-eyed devils?"

Along with its good relations with the US, India is in many ways the odd man out in this group:

Russia’s president, Dmitri A. Medvedev, said the main point of the meeting was to show that “the BRIC should create conditions for a more just world order.”

The four countries produce about 15 percent of the world’s gross domestic product and hold about 40 percent of the gold and hard currency reserves, but they are not a unified bloc and do not do enough business among themselves to justify a trade alliance.

Russia and Brazil export natural resources, China exports manufactured goods and India bases its growth primarily on domestic demand. As such, India is not as concerned with the status of the dollar and is by no means as intent on scoring ideological points against the United States as is Russia.

Actually, the fact that these countries have been roped together in the BRIC is the least of their areas of common interest. In addition to being the most successful among the world's emerging economies, the BRIC are also among the world's most populous; China, India, and Brazil rank 1st, 2nd, and 5th, I believe. All are the dominant powers in their regions. All but India are at least quasi-socialist in their governance, with India having only recently moved away from the sway of socialism. And for all the talk of emerging middle classes in each country, the reality is that each of the BRIC countries has teeming masses of very poor people, with a small population of wealthy folks on top.

Still, it's not as if this is some ideologically cohesive group. Mostly what they are interested in is business, not politics.

Mr. Medvedev encouraged China, the world’s largest holder of dollar reserves, and other nations to put their money in some other currency or financial mechanism. He also urged members of the Shanghai Cooperation Organization to use their national currencies in conducting bilateral trade.

“There can be no successful currency system, and particularly a global system, if the financial instruments that are used are denominated in only one currency,” Mr. Medvedev said. “Today, this is the case and the currency is the dollar.”

The question of what sort of currency should be used in global trade is an interesting one, and is very much up in the air at this point. Short of a war or catostrophic economic collapse, it's hard to imagine that this will be the vehicle for a change in global finance.