BRICS today account for 27 percent of global purchasing power and 45 per cent of the world’s work force. BRICS have also become important sources of outward investment with outward FDI rising from US$ 7 billion in 2000 to US$ 126 billion in 2012 i.e. 9 per cent of world flows from just 1 per cent a decade earlier. In terms of overall FDI outflows, BRICS account for one-third of those from developing and transition economies, while as recipients of FDI stock BRICS countries account for 11 per cent of global FDI stock. Most recently, BRICS nations pledged US$ 75 billion to boost the IMF’s crisis reserves to support the Eurozone.
With the rise of GDP levels of the BRICS nations, the center of the global economy has moved from the West to the East. Plus, the emerging economies are mostly net creditors to developed nations, as they account for 75 percent of the world’s total currency reserves. And yet the power of wealth distribution remains in the hands of Western countries.This dichotomy exists because those who control money also control the flow of wealth.
The BRICS are now in a position to divert the flow of wealth in a more equitable direction.Plus, a big-ticket economic alliance has large financial requirements and transactions. Why not have a bank or a currency reserve that would look after the emerging economies and their fate?