28 April 2023 – The Indian Express

BRICS

• The world’s top five emerging economies—Brazil, Russia, India, China, and South Africa—are together referred to as BRICS.
• Every year, the BRICS Leaders’ Summit is held.

Structure:

• Although it is not a formal organisation, the BRICS summit brings together the five countries’ heads of state every year.
• According to the abbreviation B-R-I-C-S, the forum chairmanship is rotated annually among the members.
• Over the past ten years, BRICS cooperation has grown to include a yearly schedule of more than 100 sectoral meetings.

Important Details:

• BRICS is a significant economic engine because, collectively, they make up roughly 40% of the world’s population and about 30% of its GDP.
• A worldwide power bloc and burgeoning investment market.

Genesis:

• The term “BRICS” was first coined in 2001 by Goldman Sachs economist Jim O’Neill in a report on the growth prospects for the economies of Brazil, Russia, India, and China, which combined accounted for a sizeable portion of global production and population.
• The four nations started a regular, informal diplomatic coordination in 2006 with yearly meetings of their foreign ministers outside of the UN General Assembly’s General Debate (UNGA).
• The decision to hold the conversation at the level of Heads of State and Government during yearly Summits resulted from this productive encounter.

Timeline:

• In 2009, the Russian Federation hosted the inaugural BRIC Summit, which had as its main topic the reform of the world financial system.
• In December 2010, South Africa received an invitation to join BRIC, which led to the name BRICS being used for the group. After that, in March 2011, South Africa went to the Third BRICS Summit in Sanya, China.

Objectives:

• For more sustainable, equitable, and reciprocally beneficial growth, the BRICS strives to strengthen, broaden, and accelerate collaboration within the grouping and among the member nations.
• To guarantee that ties are based on each member’s economic strengths and to prevent rivalry where it is practicable, BRICS takes into account each member’s growth, development, and poverty objectives.
• With goals that go far beyond its basic goal of reforming international financial institutions, BRICS is growing as a fresh and exciting political-diplomatic body.

Cooperation Areas:

Economic collaboration:

• Trade and investment between BRICS nations are expanding quickly, and a variety of industries are cooperating economically.
• The Contingent Reserve Agreement and the New Development Bank, as well as agreements in the areas of economic and trade cooperation, innovation cooperation, customs cooperation, strategic cooperation between the BRICS Business Council, and customs cooperation, have all been reached.
• By encouraging integrated trade and investment markets and advancing economic cooperation, these agreements help to realise common goals.

Interaction between individual nations:

• Members of the BRICS have acknowledged the need to promote greater cooperation in the fields of culture, sport, education, cinema, and youth as well as to boost people-to-people interactions.
• In the spirit of inclusivity, variety, and mutual learning, people-to-people exchanges aim to strengthen ties and mutual understanding amongst the peoples of the BRICS nations.
• The Young Diplomats Forum, Parliamentarian Forum, Trade Union Forum, Civil BRICS, as well as the Media Forum are a few examples of these people-to-people encounters.

Cooperation in Politics and Security:

• Peace, security, development, and cooperation for a more just and equitable world are the goals of BRICS member countries’ political and security cooperation.
• In addition to pushing the reorganisation of the global political architecture so that it is more balanced and rests on the pillar of multilateralism, BRICS offers chances for sharing policy advice and exchanges of best practises in terms of domestic and regional concerns.
• South Africa’s foreign policy initiatives, such as the advancement of the African Agenda and South-South Cooperation, are driven by BRICS.

Mechanism for Collaboration:

Members can cooperate with one another by:

• Track I: Official diplomacy between the various national governments.
• Track II: Participation through organisations with a connection to the government, such as state-owned businesses and business councils.
• Track III: Engagement with civil society and the general public.
• BRICS’s effects on international institutional changes
• The financial problems of 2008 served as the primary impetus for the BRIC countries to begin cooperating. The sustainability of the dollar-based monetary system was questioned as a result of the crisis.
• The BRICs demanded that “multilateral institutions be reformed to reflect the structural changes in the global economy and the more important role that emerging markets currently play.”
• BRICs successfully pushed for institutional change, which resulted in IMF quota revision in 2010. As a result, the financial crisis temporarily diminished western legitimacy and allowed the BRIC nations to take the lead in setting the agenda in multilateral institutions.

New Development Bank:

• Shanghai serves as the home base for NDB.
• The prospect of establishing a new Development Bank to raise funds for infrastructure and sustainable development projects in the BRICS and other emerging economies, as well as in underdeveloped nations, was discussed at the Fourth BRICS Summit in New Delhi (2012).
• The agreement establishing the New Development Bank was signed by the presidents at the sixth BRICS summit in Fortaleza, Brazil, in 2014. (NDB).
• The Fortaleza Declaration emphasised that the NDB will enhance BRICS cooperation and support multilateral and regional financial institutions’ efforts to promote global development, while promoting sustainable and balanced growth.
• Clean energy, transportation infrastructure, irrigation, sustainable urban development, and economic cooperation among the member nations are the NDB’s main operational areas.
• The NDB runs on a consultative framework among the BRICS members, with equal rights for all of the member nations.

Arrangement for Contingent Reserve:

• The BRICS states signed the Fortaleza Declaration at the sixth BRICS conference in 2014, taking into account the rising frequency of global financial crises.
• To help mitigate the BOP crisis scenario and further boost financial stability, the BRICS CRA plans to offer short-term liquidity support to the members through currency swaps.
• One hundred billion dollars from the United States of America will be the CRA’s initial total pledged resources (USD 100 billion).
• Additionally, it would improve the global financial safety net and strengthen already-existing international agreements (IMF).

Challenges:

• Big Three’s pronounced dominance The BRICS face a challenge as they advance from Russia, China, and India. BRICS must expand to include all of the world’s major emerging markets in order to really represent them. More nations from different continents and areas must join it.
• To become more significant in the world order, the BRICS will need to broaden their agenda. At the moment, the topic is dominated by infrastructure development and climate change.
• The founding ideals of BRICS, such as respect for sovereign equality and pluralism in global governance, are likely to be put to the test as the five member nations pursue their own national agendas as the group moves forward.
• The BRICS members’ foolish belief that a cordial political relationship is always feasible has been decisively disproved by the military standoff between China and India on the Doklam plateau.
• Conflict among the BRICS members, particularly between China and India, could result from China’s attempts to incorporate nation states—which are essential to its Belt and Road Initiative—into a larger political framework.

Relevance to India

• By consulting and working together on economic issues of shared interest as well as current global concerns like international terrorism, climate change, food and energy security, reforms of global governance institutions, etc., India may gain from the combined might of the BRICS.
• India continues to discuss its NSG membership with the other BRICS nations.
• India will receive assistance from the NDB in obtaining funding for its infrastructure and sustainable development projects. A loan of $250 million for India’s Multitranche Financing Facility for Renewable Energy Financing Scheme was among the first batch of loans that the NDB approved.

Steps to Take:

• In its first decade, BRICS did a good job of identifying issues of shared interest and developing channels to address these challenges.
• Each of the BRICS participants needs to evaluate the initiative’s prospects and inherent constraints realisticallsy if it is to continue to be relevant over the coming ten years.
• The BRICS countries must adjust their strategy and recommit to their basic principles. In order to resolve the asymmetry of power both within the group and in global governance more broadly, BRICS must restate their commitment to a multi-polar world that supports sovereign equality and democratic decision-making.
• They must expand on the NDB’s achievements by funding new BRICS institutions. It will be beneficial for BRICS to create an institutional research wing that offers answers that are better suited to the developing world, similar to the OECD.
• To fulfil their obligations under the Paris Agreement on climate change and the UN’s sustainable development goals, BRICS should take into account a BRICS-led initiative. This might entail, for instance, creating an institution for energy policy and a BRICS energy alliance.
• The NDB, in collaboration with other development finance organisations, could be a powerful tool for funding the BRICS countries’ progress toward the sustainable development goals.
• A future agenda item for the BRICS could include creating a BRICS Credit Rating Agency (BCRA), as proposed by India, to compete with Western agencies like Standard & Poor’s, Moody’s, and others.