Context: Increasing its membership from five to eleven, the BRICS alliance has significantly bolstered its status as a noteworthy global coalition.
More about the news:
- The selection of countries to join the BRICS coalition has notable significance, as it introduces four major Western Asian players—Egypt, Iran, Saudi Arabia, and the UAE—alongside Ethiopia and Argentina from Africa and South America.
- This marks a shift in the foundational principles of this non-Western economic alliance, aiming to transform it into a more politically pertinent bloc.
- The fact that the summit and the expansion of BRICS proceeded despite efforts by the U.S. and Europe to isolate Russia due to its Ukraine invasion, holds substantial implications for the Western bloc.
- Although India might not have been enthusiastic about such swift expansion, the inclusion of Iran in BRICS conveys a clear message against U.S. sanctions, mirroring Iran’s recent entry into the SCO.
- The admission of both Iran and Saudi Arabia, as well as the UAE, into the same grouping has primarily been facilitated by Beijing’s mediation in a peace agreement.
- India’s endeavours for UN reform, increased representation from the Global South, and the expansion of the UN Security Council continue to remain important factors.
What is ‘BRICS’?
- Initially termed BRIC in 2001, the acronym BRICS was coined by Jim O’Neill, a Goldman Sachs economist, to encompass Brazil, China, India, and Russia.
- The BRIC grouping’s first formal summit was held in Yekaterinburg, Russia, commenced in 2009. During this summit, BRIC Leaders issued a Joint Statement elucidating the objectives of the BRIC collaboration. This comprehensive document also provided a detailed framework for addressing the global financial and economic crisis.
- South Africa officially became a member nation in 2010. The group was renamed BRICS – with the “S” standing for South Africa – to reflect the group’s expanded membership.
- It was anticipated by Goldman Sachs that the four BRIC economies—China, India, Brazil, Russia—alongside South Africa, would dominate the global economy by 2050.
- The foundation for this assertion lay in the sustained presence of China, India, Brazil, Russia, and South Africa among the world’s swiftest expanding and emerging market economies.
- These nations possessed a notable competitive advantage owing to their economical labor costs, advantageous demographics, and copious natural resources, particularly during the era of the global commodities upswing.
- By the year 2013, the BRICS collective accounted for approximately 27% of the global GDP in terms of purchasing power parity.
- These five nations constituted around 42% of the global populace. In geographical terms, the BRICS countries spanned 26% of the Earth’s total land area.
Role of the BRICS
- From 2009 to 2014, the BRICS member countries reached a consensus on matters concerning economics and finance, which encompassed reforms within institutions such as the World Bank and IMF.
- A collective commitment was made to implement strategies aimed at mobilizing adequate resources to enhance the IMF’s capacity to effectively manage various forms of crises.
- Additionally, during this period, they established the BRICS Interbank Cooperation Mechanism, facilitating the provision of credit facilities denominated in local currencies, along with the formation of the BRICS Exchanges Alliance.
- Furthermore, their attention extended to regional challenges, encompassing issues related to countries like Libya, Syria, Afghanistan, and Iran.
- BRICS also coordinated together in resolving:
- IMF reform
- The struggle against illicit drug trafficking
- The need, use, and development of technologies in information and communication
- The BRICS countries also sought to create favourable conditions for barrier-free trade.
Operation of BRICS:
- On the basis of UN Charter, BRICS partners’ relations are built.
- They follow the recognized principles as well as international law’s norms.
- All the member countries agreed to the following principles during 2011 Summit.
- Neutrality (regarding third parties)
- Non-bloc nature
New Development Bank:
- A multilateral development institution formerly known as the BRICS Development Bank, was founded by the collaborative efforts of the BRICS member nations: Brazil, Russia, India, China, and South Africa.
- The bank’s inception involved an initial authorized capital of $100 billion.
- The distribution of this subscribed capital was executed equitably among the founding members—Brazil, Russia, India, China, and South Africa.
- The NDB Agreement assures uniform voting rights for all member countries and excludes the presence of veto powers.
- Shanghai, China, is the bank’s headquarters and it stands as principal operational hub.
- To supplement this, regional offices were set up, commencing with Johannesburg, South Africa, and subsequently expanded to São Paulo, Brazil, GIFT City, India, and Moscow, Russia.
- The origin of this bank traces back to a proposal by India during the 4th BRICS summit held in Delhi in 2012, where the focus revolved around conceptualizing a new development bank.
- A formal consensus on this initiative was solidified at the 5th BRICS summit in Durban, South Africa, in 2013.
- The pivotal Agreement establishing the New Development Bank was officially signed in 2014, during the 6th BRICS summit in Fortaleza, Brazil.
Key Agendas of recently held 15th BRICS summit in Johannesburg:
1.Active Engagement in Dialogues:
- BRICS-Africa Outreach Conversations
- BRICS Plus Dialogue Interactions
- Enabling an equitable and just transition, which addresses the risks posed by climate change.
- Facilitating the transformation of education and skill development for the evolving future.
- Strengthening post-pandemic socioeconomic recovery measures.
- Achieving the goals outlined in the 2030 Agenda for Sustainable Development.
3.Addressing Political Issues:
- Deliberation on the Russia-Ukraine conflict.
- Examination of the post-coup situation in Niger.
- Assessment of heightened tensions between the Western bloc and Russia.
4.Advancing Economic Reforms:
- Fostering increased participation and influence of Emerging Markets and Developing Countries (EMDCs) within international economic decision-making.
- Advocating for reforms within Multilateral Development Banks (MDBs) and measures to alleviate debt-related stress.
- Exploring potential opportunities through the African Continental Free Trade Area.
5.Enlarging the Scope of BRICS:
- Emerging as an appealing alternative to the developed countries’ “club” of the G-7 nations.
- Witnessing interest from over 40 countries in joining BRICS, with at least 19 countries formally applying for membership.
- South Africa has extended invitations to leaders representing the Global South and the African Union (AU) for parallel sessions on the sidelines of the summit.
Significance of 15th BRICS summit for India:
- Multi-dimensional Alignment: Entails a strategy of alignment based on specific issues, wherein India simultaneously participates in and pursues its interests within various strategic and economic coalitions, such as the Quad and BRICS.
- Poly directional Foreign Policy: Bolsters economic growth, technological advancements, research and innovation, norm-setting influence, and security enhancement.
- Diplomatic Advantages: Enables a diplomacy centred around developmental engagement, with a goal of expanding BRICS membership.
- Comprehensive Agenda:
- Ensuring Energy Security
- Combating Terrorism
- Financing Efforts for Climate Change Mitigation
- Geopolitical Influence: Within the BRICS framework, emphasis is placed on addressing non-traditional security threats and enhancing economic security.
- Political Assertion: Serves as a political countermeasure against unjust coercive practices, including instances such as the European Union’s Carbon Border Tax, unilateral sanctions, and biased economic transactions.
- Strategic Consideration: Marks a significant milestone as it is the first in-person meeting following the military standoff with China along the Line of Actual Control in 2020.
- Positive Developments: Ahead of the summit, the 19th round of the India-China Corps Commander Level Meeting resulted in a joint statement, signifying a favourable step forward.