BRICS is Bigger Now. Is It Better Too?

Why in News?

• At Johannesburg BRICS summit, Leaders of Brazil, Russia, India, China, and South Africa (BRICS) took a call to expand the BRICS grouping from five countries to 11.
• It is important to understand what the new members will bring to the BRICS table and with many of new members having economic dependencies on China, what is at stake for India?

Origin and Evolution of BRICS

• BRICS brings together five of the largest developing countries of the world, representing around 41 per cent of the global population, around 24 per cent of the global GDP, and around 16 per cent of global trade.
• The acronym BRIC was first used in 2001 by Goldman Sachs, projecting that the 4 economies of Brazil, Russia, India, and China would be among the world’s largest economies in the next 50 years or so.
• As a formal grouping, BRIC started after the meeting of the leaders of Russia, India, and China in St. Petersburg on the margins of the G8 Outreach Summit in 2006.
• The grouping was formalised during the first meeting of BRIC Foreign Ministers on the margins of the UNGA in New York in 2006.
• The first BRIC Summit was held in Yekaterinburg, Russia, in 2009. It was decided to include South Africa at the BRIC Foreign Ministers’ meeting in New York in 2010.
• Accordingly, South Africa attended the 3rd BRICS Summit in Sanya, China, in 2011. 

The Expansion of BRICS

• The Johannesburg declaration, issued after the summit, said Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates (UAE) had been invited to become full members from January 1, 2024.
  • The new entrants are emerging economies with the potential to scale up.
  • Many belong to the Global South or the developing countries, and want to hedge their bets in the increasingly polarised geopolitical landscape.
• The Johannesburg declaration said that BRICS countries had reached a consensus on the guiding principles, standards, criteria, and procedures of the expansion process, but these have not been made public.
• By growing to a size of 11 members, BRICS has become larger than ASEAN (10 members) and Shanghai Cooperation Organisation (9).
• Contrary to the views that the new expanded grouping is an alternative to western blocs like the G7, India does not view this as an anti-West grouping.
• In fact, France, one of the P-5 (permanent members of the UNSC) countries which is also a member of G7, seems to have expressed interest in engaging with the BRICS more actively. Whether Paris becomes a member is a question to be agreed through consensus.

India’s Role in the Expansion of the BRICS

• India took the lead in forging consensus on membership criteria and selection of new members.
• India’s efforts were guided by its objective to incorporate Strategic Partners as new members.
• India has strategic partnerships with four of the new six members — Saudi Arabia, UAE, Iran, and Egypt.

Region-Wise Significance of Expansion of the Grouping

• From Latin America and Africa
  • From Latin America, despite Brazil’s reluctance, regional rival Argentina was selected as a new member.
  • With a GDP of approximately US$610 billion, Argentina is one of the largest economies in Latin America.
  • From Africa, Ethiopia and Egypt made the cut, over Nigeria, Algeria, and Senegal.
  • According to the World Bank, Ethiopia is the second most populous nation in Africa after Nigeria, and one of the fastest-growing economies in the region, with an estimated 6.4% growth in FY 2021/22.
  • Egypt occupies a crucial geo-strategic location, 12 per cent of global trade passes through the Suez Canal, and is a key player in the region.
• Countries From Asia
  • Of the three Asian countries, Saudi Arabia and UAE are strong partners of the US, and along with Egypt, have close ties with Washington.
  • Iran, which has had a complicated relationship with the US, has been wooed by China in recent years. Tehran’s rulers are mindful of their place in history, but economic imperatives have prompted them to engage with Beijing strongly.
  • The inclusion of Saudi Arabia and the UAE is expected to lead to more mobilisation of financial resources for the New Development Bank, the BRICS alternative for developing countries.
  • By including these four, BRICS has also addressed the question that no Muslim-majority country is in the grouping.

Challenges Associated with the Expansion

• New Members’ Economic Dependence on China
  • Both Argentina and Egypt have strong economic dependency ties with China.
  • Recently, Beijing lent a helping hand to Argentina so that it could avert a default with the International Monetary Fund for the second time in 30 days.
  • The cash-strapped country tapped almost $3 billion of a Beijing currency swap line to pay the multilateral lender.
  • China’s bilateral trade with Egypt is currently at $15 billion, double that of India’s $7.26 billion in 2021-22.
  • The president of Egypt has been wooing Chinese investments, and has travelled to China seven times in the past eight years.
• Contradictions Within the Group
  • Saudi Arabia, UAE, Iran, Egypt, and Ethiopia share a common regional space.
  • This might give importance to the West Asian and North African region, and the rivalries and geopolitical tensions here might play out in the grouping as well.
  • These contradictions within the member countries could limit the potential of BRICS.

Russia, China, and India’s Stakes with the Expansion of the Grouping

• Russia, China’s Stakes
  • With the expansion of the grouping, China is seen as trying to build its own bloc against the Western powers.
  • Russia, the other major player in the grouping, will host the next BRICS summit in Kazan in 2024.
  • An expanded grouping of 11 members will work for Moscow, which has been facing diplomatic isolation.
  • Russia will use the opportunity to portray Russia’s relevance despite Western pressures.
• India’ Stakes
  • For India, the Chinese challenge remains the most pertinent.
  • India has the difficult task of guarding against the grouping being swayed by Beijing, which wants to pack it with countries indebted to China.
  • India has maintained that decisions have to be made through consensus - the guiding principle in the grouping, so that it is not completely led by Beijing.

Conclusion

• There have been many multilateral groupings that prospered and lost their relevance with time.
• The case of BRICS is truly remarkable. Despite several achievements, it began to lose its sparkle but still many countries want to join BRICS.
• With the expansion of the grouping BRICS has certainly become bigger but only time will tell whether it has become better as well.

Q1) What is the significance of the BRICS?

BRICS is an important grouping bringing together the major emerging economies, comprising 41% of the world population, having 24% of the world GDP and over 16% share in world trade. BRICS countries have been the main engines of global economic growth over the years. Over a period, BRICS countries have come together to deliberate on important issues under the three pillars of political and security, economic and financial and cultural and people to people exchanges.

Q2) What are some internal differences within BRICS?

If India, SA, and Brazil within the BRICS expected that China and Russia would fully back their bid to secure membership of the UN Security Council, they were disappointed. Group has seen conflicts such as China’s aggression along the Line of Actual Control which brought India-China relations to their lowest point in several decades. Post Ukraine conflict there has been a consolidation of China-Russia cooperation. Other members are finding it difficult to maintain balance between the west and China-Russia.

Source: The Indian Express