Full coverage: G20 Hangzhou Summit
The BRICS grouping will hold meetings on the sidelines of the G20 summit to discuss some of their own challenges. When the nations came together back in 2008, they were a force to be reckoned with. But since then four of the nations have suffered slow growth and rising inequalities while India is bucking.
It's been a tough year for the BRICS nations. China's growth slowed, as did its insatiable demand for commodities. Not good news for Russia and Brazil as they slumped into recession. South Africa too felt the pain and could be next to slip into recession. India is the lone ranger managing to keep the balance on growth expectations. While the outlook is grim, many believe this cycle will turn.
"We’re starting to find some green shoots coming out of China. China's growth is starting to pick up and that will mean that China and India will I think bounce back in terms of serving as drivers as growth," said Abdullah Verachia, Faculty Member of Gordon Inst. of Business Science.
"And so as we sit on the backdrop of this G20, a number of G20 countries going to this G20 that's taking place in China, with significant domestic economic challenges, with slowing economic growth but we do have an emboldened India and a China that's starting to resurge."
China is not only playing host to global leaders but is also firmly setting the agenda. Its calling on leaders to look at new ways of reviving growth globally, the digital economy and inclusive growth
Abdullah Verachia also said, "China's strategy is really, how do we one, look at starting to stimulate economic growth in a number of trading partners of which the US, of which Europe and a number of G20 countries in Europe, of which South Africa and more importantly the continent of Africa and also India and Brazil are key trading partners. So, I think trade and economic growth will be centre stage in terms of the G20 and the way China will position that."
Brics countries accounted for almost 30% of global GDP and around 17% of trade in 2014. As the emphasis moves away from commodities demand, there's likely to be new investment strategies, especially for Africa.
"The New Development Bank which is specifically aimed at investing, taking domestic resources, domestic financing capital and to invest in sustainable infrastructure. So, that's one of the ways in which they try as a group to address these challenges," said Cyril Prinsloo, researcher of South African Inst. of Int'l Affairs.
"We starting to see significant investment from telco companies such as Huawei, such as ZTE. We'll also start to see investment in the auto sector as we've seen with the number Chinese automotive companies and it's obviously very similar from India. We're starting to see a very diversified portfolio of investment from India coming into Africa," said Abdullah Verachia.
The new Development Bank has already started funding projects but economic growth will be key to the bank's sustainability.
"If countries such as Russia, Brazil, South Africa really want to step out, I think they need to focus on getting domestic affairs in order and if they can do that successfully, then certainly there will be a lot of potential for them going forward," said Cyril Prinsloo.
It's been an interesting year thus far, with many unknowns coming to the fore. No doubt Brexit and the upcoming US elections will also make the agenda as G20 leaders look for the way forward. The G20 summit will be followed by the 8th Brics summit to be held in India later this month.
