- BRICS is the group composed of the five major emerging countries – Brazil, Russia, India, China and South Africa.
- It together represents about 42% of the population, 23% of GDP, 30% of the territory and 18% of the global trade.
- The acronym BRIC was coined by economist ‘Jim O’Neill’ of Goldman Sachs in 2001 to indicate the emerging powers that would be, alongside the United States, the five largest economies of the world in the 21st century.
- In 2006, BRIC countries started their dialogue, which since 2009 takes place at annual meetings of heads of state and government.
- In 2011, with South Africa joining the group, the BRICS reached its final composition, incorporating a country from the African continent.
Objectives of BRICS
- One of the major objectives of the grouping is broadening, deepening, and intensifying cooperation among the member countries for mutually beneficial, sustainable and equitable development.
- BRICS takes into consideration each member’s growth, development and poverty objectives to ensure relations are built on the respective country’s economic strengths and to avoid competition where possible.
- BRICS is emerging as a new and promising political-diplomatic entity with diverse objectives, far beyond the original objective of reforming global financial institutions.
- It’s an emerging investment market and global power bloc.
Main Areas of Cooperation within BRICS
- There are rapidly growing trade and investment flows between BRICS countries as well as economic cooperation activities across a range of sectors.
- Agreements have been concluded in the areas of Economic and Trade Cooperation; Innovation Cooperation, Customs Cooperation; strategic cooperation between the BRICS Business Council , Contingent Reserve Agreement and the New Development Bank.
- These agreements contribute to realisation of the shared objectives of deepening economic cooperation and fostering integrated trade and investment markets.
- BRICS members have recognised the need for strengthening People-to-People exchanges and to foster closer cooperation in the areas of culture, sport, education, film and youth.
- People-to-People exchanges seek to forge new friendships; deepen relations and mutual understanding between BRICS peoples in the spirit of openness, inclusiveness, diversity and mutual learning.
- Such People to people exchanges include the Young Diplomats Forum, Parliamentarian Forum, Trade Union Forum, Civil BRICSas well as the Media Forum.
Political and Security Cooperation
- BRICS member political and security cooperation is aimed at achieving peace, security, development and cooperation for a more equitable and fair world.
- BRICS provides opportunities for sharing policy advice and exchanges of best practices in terms of domestic and regional challenges as well as advancing the restructuring of the global political architecture so that it is more balanced, resting on the pillar of multilateralism.
- BRICS is utilised as a driver for South Africa’s foreign policy priorities including the pursuit of the African Agendaand South-South Cooperation.
- Cooperation among members is achieved through:
- Track I:Formal diplomatic engagement between the national governments.
- Track II:Engagement through government-affiliated institutions, e.g. state-owned enterprises and business councils.
- Track III:Civil society and People-to-People engagement.
Institutions of BRICS
New Development Bank
- During the sixth BRICS Summit in Fortaleza, Brazil (2014), the leaders signed the Agreement for establishing the New Development Bank (NDB).
- Fortaleza Declarationstressed that the NDB will strengthen cooperation among BRICS and will supplement the efforts of multilateral and regional financial institutions for global development thus contributing to sustainable and balanced growth.
- NDB has successfully worked as one of the most promising multilateral development institutions. Since its inception in 2015, it has approved 42 investment projects worth over $15 billion.
Contingency Reserve Arrangement
- BRICSnations signed BRICS Contingent Reserve Arrangement (CRA) in 2014 as part of Fortaleza Declaration at Sixth BRICS summit.
- Contingency Reserve Arrangement, aimed at ensuring liquidity for member-states when they are confronted by short term balance of payment crises.
- The capital of $100 billion committed under CRA, can act as the guarantor of BRICS financial stability in case of crisis.
Relevance of BRICS in Global Order
- BRICS countries together accounts for 42% of the world’s population, a third of the global GDP and around 17% share of world trade.
- BRICS countries sizable contribution to global growth, trade and investment makes it an important pillar of global order.
- Structural imbalances caused by the global financial crisis of 2008 and new threats to the global economy posed by trade war and unilateral economic sanctions are yet to be resolved.
- The growing contribution of the BRICS to the world economy and the rising importance of the economic relations between the BRICS and other Emerging Market and Developing Countries (EMDCs) create an opportunity for new initiatives that would better help to support sustainable and inclusive growth and development.
- The US unilateral withdrawal fromIntermediate-Range Nuclear Forces (INF) Treaty and Iran deal has posed a great security threat to global peace.
- BRICS, being a pillar of fairer polycentric world order, can play a significant role in assuring world peace by playing an active role in dispute resolution based on principle of fairness.
- The BRICS contribution to world poverty reduction has been sizeable. Continued BRICS growth remains important for poverty reduction as well as for reducing international inequalities.
Importance of BRICS for India
- Global geopolitics today represents the case of a tug of war and India finds itself in the middle of it. This has made difficult for India to carve a middle path for balancing its strategic interests between the U.S and the Russia-China axis.
- Therefore, BRICS platform provides an opportunity for India to balance Russia-China axis.
Global Economic Order
- BRICS countries shared a common objective of reforming the international financial and monetary system, with a strong desire to build a more just, and balanced international order.
- To this end, BRICS community plays an important role in the G20, in shaping global economic policies and promoting financial stability.
Voice of Developing Nations
- As the western countries are raising challenges on issues ranging from World Trade Organisation to climate change, the developing countries are crippling under the onslaught of these policies.
- In recent period, BRICS has emerged as the voice of developing countries, or the global south and playing a significant role in protecting the rights of developing countries.
- BRICS also provides a platform for India to galvanize its efforts against terrorism and has worked within the grouping to take a strong stand against terrorism and bring about focused consultations on specific aspects relating to terrorism.
- India is actively pursuing its membership for United Nation Security Council (UNSC) and Nuclear Supplier Group (NSG).
- China forms the major roadblock in pursuing such goals. Therefore, BRICS provides an opportunity to actively engage with China and resolve the mutual disputes. It also helps in garnering support of other partner countries.
Challenges Associated to BRICS
Marred by Various Issues
- Group has seen conflicts such as China’s aggression in eastern Ladakhwhich brought India-China relations to their lowest point in several decades.
- There is also the reality of the strained relations of China and Russia with the West, and of serious internal challengespreoccupying both Brazil and South Africa.
- On the other hand, China’s image at global level has also been tarnished due to the Covid-19.
- It is claimed by critics that heterogeneity (variable/diverse nature of countries) of the BRICS nations with its diverse interestspossess a threat to the viability of the grouping.
- All the countries in the BRICS group trade with China more than each other; therefore it is blamed as a platform to promote China’s interest.
- Balancing trade deficit with China is a huge challenge for other partner nations.
Not Been Effective
- The five-power combine has succeeded, albeit up to a point. However, China’s economic rise has created a serious imbalancewithin BRICS.
- Also the group has not done enough to assist the Global Southto win their optimal support for their agenda.
- Brazil and Russia have been experiencing economic recessionsin recent years, while China and India have sustained high growth rates.
- South Africa’s economyhas been performing poorly, with high levels of unemployment and inequality.
- Russia’s annexation of Crimea and involvement in conflicts in Ukraine and Syriahave strained its relations with other BRICS members.
- China’s territorial claims in the South China Seahave been a source of tension with other BRICS countries that have competing claims in the region.
- The New Development Bank (NDB), established by BRICS in 2014 to provide development financing, has faced challenges in disbursing loans and identifying viable projects.
- The Contingent Reserve Arrangement (CRA), a pool of foreign exchange reserves, has not been tested yet.
- Disagreements over the governance structure of the NDB and the CRA, as well as differing priorities in areas such as trade, investment, and climate change, have made it difficult for BRICS to present a unified front on many issues.
- The rise of protectionism, nationalism, and populism in some advanced economieshas posed challenges for BRICS in terms of trade, investment, and access to capital.
Way Forward for BRICS
Cooperation Within the Group
- BRICS need to shed the centrality from Chinaand create a better internal balance, reinforced by the urgent need for diversification.
- For BRICS to remain relevant over the next decades, each of its members must make arealistic assessment of the opportunities and inherent limitations.
Upholding Universal Security
- BRICS countries should be builders of universal security. Seeking one’s own security at the expense of others will only create new tensions and risks.
- It is important to respect and guarantee the security of every country, replace confrontation with dialogueand partnership, and promote the building of balanced, effective and sustainable regional security.
Securing Economic Interests
- BRICS countries should be contributors of common development.
- Facing the rising tide of de-globalisation and the increase of unilateral sanctions, BRICS countries should enhance mutually-beneficial cooperation in supply chains, energy, food and financial resilience
- Also, it will be useful for BRICS to develop an institutional research wing, along the lines of the OECD, offering solutions which are better suited to the developing world.
Public Health Governance
- BRICS countries should fully leverage their respective strengths, and jointlypromote the development of global health governance in a direction in favour of developing countries.
- India’s vision of ‘One Earth, One Health’contributes to multilateral cooperation on public health.
- The countries should make good use of the BRICS Vaccine Research and Development Centre, establish aBRICS early warning mechanism for preventing large-scale infectious diseases, and provide high-quality public goods for global health governance cooperation.
A Global Governance Philosophy
- Global challenges are emerging one after another. Coping with these challenges requires coordination among global actions.
- Safeguarding the international system is essential while ensuring that international affairs have participation by all,international rules are formulated by all, and development outcomes are shared by all.
- BRICS should embrace a global governance philosophy that emphasises extensive consultation, joint contribution and shared benefits, enhance unityand cooperation with emerging markets and developing countries, and increase the voice in global governance.
New Members of BRICS
- BRICS announces new members as:
- Saudi Arabia
- The new membership of these countries in BRICS will become effective from January 1, 2024.
- The alliance, focused on advancing the Global South’s development, saw interest from nearly 40 countries. The expansion, decided through consensus, follows agreed guiding principles.
- BRICS has embarked on a new chapter in its effort to build a world that is fair, a world that is just, a world that is also inclusive and prosperous.
- They represent a disparate pool of potential candidates motivated largely by a desire to level a global playing field many consider rigged against them.
- They are attracted by BRICS’ promise to rebalance world bodies such as the G7, IMF, and World Bank dominated by the United States and other wealthy Western states.
- The countries have a range of reasons for applying, from interest in specific economic initiatives such as transitioning to local currencies to challenging the US. Then there are those who want easier access to China or other BRICS or more control during major power tensions and uncertainty.
- BRICS faces several challenges such as internal differences, global economic slowdown, and geopolitical tensions. However, the group can remain relevant by expanding its agenda to promote comprehensive development and enhanced cooperation among all states.
- BRICS should also focus on the democratization of international issues, respect for cultural diversity, and peaceful resolution of conflicts.
- India has always supported the expansion of BRICS. India has always believed that adding new members will strengthen BRICS as an organization.
In the storming ocean of world politics, BRICS can contribute significantly in maintaining international stability and ensuring global economic growth and becoming a united centre of the multipolar world.