The Paradox of BRICS, Its New Pathway

Why in News?

• 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.

 

The Concept of BRICS

• BRICS is an acronym for five regional economies: Brazil, Russia, India, China and South Africa.
• The first four were initially grouped as "BRIC" in 2001 by an economist Jim O'Neill, who coined the term to describe fast-growing economies that would collectively dominate the global economy by 2050.

 

Evolution of BRICS

• The leaders of BRIC (Brazil, Russia, India, and China) countries met for the first time in St. Petersburg, Russia, on the margins of G8 Outreach Summit in July 2006.
• In September 2006, the group was formalised as BRIC during the 1st BRIC Foreign Ministers’ Meeting, which met on the side lines of the General Debate of the UN Assembly in New York City.
• After a series of high-level meetings, the 1st BRIC summit was held in Yekaterinburg, Russia on 16 June 2009.
• Later, BRIC group was renamed as BRICS after South Africa was accepted as a full member at the BRIC Foreign Ministers’ meeting in New York in September
• BRICS has held 14 summits in the past 13 years.

 

Significance of 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 the 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.

 

Key Focus Areas of BRICS

• Geopolitical Cooperation
  • The group articulates a common view on key global and regional issues projecting a non-western view.
  • This strengthened the world’s march towards multi-polarity, thus helping to curb the dominating influence of the West.
• Economic Cooperation
  • New Development Bank (NDB): During the 6th BRICS Summit in Fortaleza (Brazil) in 2014, the leaders signed the Agreement establishing the NDB.NDB has committed $32.8 billion in 96 socio-economic development projects so far.
  • The Contingent Reserve Arrangement (CRA): In 2014, the BRICS governments had signed a treaty, which aimed at forestalling short-term balance of payments pressures and strengthen financial stability of the BRICS nations.
• Prospective Cooperation - BRICS Payment System:
  • BRICS countries are trying to create a payment system as an alternative to the SWIFT payment system.
  • This has taken on a new urgency as post Ukraine war, Russia has been frozen out of SWIFT.

 

Internal Differences within BRICS

• Diplomatic Bankruptcy
  • 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.
  • The issue of ‘the aspiration’ of Brazil, India, and South Africa to play a greater role in the UN, figures in every BRICS communiqué, showing the grouping’s utter diplomatic bankruptcy.
• China’s Military Assertiveness: 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.
• Russia-China Consolidation: 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.
• Trade imbalance with China: 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.
• China’s push for a common currency: Beijing’s push for a common currency for intra-BRICS trade has also caused inner troubles.

 

What is the Paradox of the BRICS?

• Despite several achievements, cooperation in various fields, the group began to lose its sparkle.
• Apart from internal differences, COVID-19, the Galwan clash, and the Ukraine conflict resulted in increased global economic stress, damaged India-China ties, and turned Russia into a diminishing power.
• The group may have internal differences or lost its Mojo but numerous nations want to become member of BRICS.
• This shows the paradox of BRICS.

 

Countries eager to join BRICS

• Latin America (4) – Argentina, Nicaragua, Mexico, and Uruguay.
• Africa (5) – Nigeria, Algeria, Egypt, Senegal, and Morocco.
• Asia (10) – Saudi Arabia, the United Arab Emirates (UAE), Türkiye, Syria, Iran, Afghanistan, Indonesia, Thailand, Kazakhstan, and Bangladesh.

 

Options for Expansion

• Mega expansion that raises the membership from five to 21, thus surpassing the G-20.
• Limited admission of 10 new members, two each supported by an existing member.
• Admission of only 5 new members, one each supported by an existing member, with none of the other four using their veto.
  • India favours expansion if it is based on agreed criteria and moves gradually.
  • If the third option win consensus, Argentina, Egypt, Indonesia, UAE, and Bangladesh are the most likely states to make the cut.

 

What could be the rationale behind admission Rush?

• China’s aspiration to become a global influencer: China is pushing the expansion as a strategic device to extend its global influence.
• FOMO (Fear of Missing Out): The demand to join BRICS stems from FOMO membership of a club that has some visibility.
• Prevailing Anti-Western sentiment: Many realise that the doors of other groupings are closed to them. The clamour reflects prevailing anti-western sentiments and a pervasive desire to create a sizeable forum of the Global South.

 

The New Pathway for BRICS

• Expected Deliberation on Expansion
  • The next BRICS summit will be hosted by South Africa on August 23-24.
  • It could take decisions on expansion and its criteria.
  • Preparatory meetings of the Foreign Ministers and the National Security Advisers are certain to deliberate on this subject.
• Address the internal imbalance and strengthen the BRICS: When the leaders talk, they should reflect on strengthening BRICS and redressing the internal imbalance.

Conclusion

• Unlike many other multilateral organisations, BRICS is still relevant with some internal differences on key issues.
• The eagerness to join the group by 19 countries reaffirms the fact that the group has still a lot to offer in terms of geopolitics and economic front as well.

 

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Q1) What is BRICS' vision for global governance reform? 

One goal shared by all BRICS members is reforming global economic governance structures like the World Bank and International Monetary Fund. This could be done by demanding that the IMF create an independent accountability mechanism. It is currently the only multilateral financial institution without one.

The BRICS should aim to make the IMF more accountable to countries affected by its policies. A key benefit of the BRICS is its potential to lead efforts meaningfully to reform the global economic system. 

 

Q2) How has BRICS delivered on people to people contact? 

The members of the BRICS countries have recognised the importance of enhancing people-to-people interactions and fostering closer collaboration in culture, cinema, sports and youth development.

In the attitude of openness, inclusiveness, variety, and mutual learning, people-to-people exchanges aim to form new connections, strengthen relations, and increase mutual understanding between the peoples of the BRICS countries.

Several forums for people-to-people encounters are held annually, including the Young Diplomats Forum, Trade Union Forum, Parliamentarian Forum, Civil BRICS, and Media Forum.

 

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Source: The Hindu