BRICS Summit in South Africa

What’s in today’s article?

• Why in news?
• About BRICS
• Timeline of BRICS
• Rationale behind the creation of BRICS
• Role of BRICS: An Analysis
• Challenges Faced by BRICS
• News Summary: PM Modi In South Africa For BRICS Summit
• 15th BRICS Summit
• 15th BRICS summit: significance for India

 

Why in news?

• Prime Minister Narendra Modi landed in South Africa to take part in the three-day BRICS summit that begins from 22 August.
• The 15th BRICS Summit is being hosted by South Africa.
  • This will be the first in-person BRICS summit since 2019; the last three were held online because of the COVID pandemic.

 

BRICS

• BRICS brings together 5 major emerging economies - Brazil, Russia, India, China and South Africa.
• BRICS as a platform represents 42% of the world population, 30% of the world’s territory, 23% of global GDP, and around 18% of world trade.

 

Timeline

• 2001 -British economist Jim O’Neill of Goldman Sachs coined the term ‘BRIC’.
  • He coined the term to highlight the potential of these four economies from an investors’ interest perspective.
• 2006 - An informal meeting of the grouping was held among Russia, India, and China on the sidelines of the G8 Outreach Summit in Russia.
• 2009 – First BRIC’s summit was held in Russia.
• 2010 – South Africa became the member and BRIC became BRICS.
• 2015 – National Development Bank, also known as BRICS Bank, was launched.

 

Rationale behind the creation of BRICS

• Lack of representation from voices of the ‘Global South’
  • In the past, India and other Asian and African countries have criticised the dominance of European and Western countries at international forums and institutions, such as the United Nations.
• Countering the influence of USA
  • It also came amid a solidification of the United States’ status as the sole superpower after the USSR’s collapse in 1991, and a realisation of countering its influence.
• To enhance cooperation
  • BRICS came about to enhance cooperation between these five countries.
  • This includes aspects of:
    • political cooperation through meetings, and
    • economic cooperation such as through the New Development Bank, which is meant to provide financial support to developing markets for infrastructure and other projects.

 

Role of BRICS: An Analysis

• New Development Bank and the Contingency Reserve Arrangement are actually the flagship outcome of BRICS.
• BRICS which started off primarily with an economic pillar, has now diversified considerably to include security, health, science and technology, culture and civil society.
• Role of BRICS has also been very important in the context of being a pressure group on the question of reform of multilateralism and also on the question of reform of global governance institutions.
• BRICS sees itself as a bridge between developing countries and developed world and takes up issues which are very relevant to the developing countries.

 

Challenges Faced by BRICS

• Lack of a binding ideology
  • Both China and Russia are now viewing the West with a lot more suspicion than before.
  • This is due to Russia - Ukraine War and frequent roadblocks in US-China ties.
  • India, meanwhile, has been deepening its relations in spheres of economy and technology with the US, of late.
  • This makes having a common policy and cooperation within the grouping difficult.
• Bilateral differences between member countries, especially India and China
• Diversity in terms of socio-cultural and political systems
• Economic slowdown faced by member countries
• China’s overwhelming presence which reduces the space for other countries.

 

News Summary: PM Modi In South Africa For BRICS Summit

15^thBRICS Summit

• The agenda of the 15th Summit
  • Theme - BRICS in Africa: Partnership for Mutually Accelerated Growth, Sustainable Development and Inclusive Multilateralism.
  • A major item on the agenda is on the expansion of BRICS.
    • More than 40 countries have shown an interest in joining BRICS, and around 23 countries have applied formally for membership.
    • Of these, consensus appears to be developing around four countries: Argentina, Saudi Arabia, the UAE and Iran.
  • BRICS leaders are also expected to take forward earlier talks on intra-BRICS trading in national currencies.
    • Although a much-discussed plan pushing for a BRICS currency to challenge the dollar does not appear to be on the agenda.
• Significance
  • First in-person summit since 2019 and the COVID-19 pandemic.
  • First in-person meeting since the Russian invasion of Ukraine in 2022.
    • This war has cast a long shadow not only over global stability, but food, fertilizer and fuel (energy) security.
  • It will be of importance as the U.S. and EU still hope to try and isolate Russia over the conflict.

 

15^th BRICS summit: Significance for India

• This will be the first in-person summit since the military standoff with China at the Line of Actual Control began in 2020.
• Just over two weeks after the BRICS summit, India will host the G20 summit.
• In this context,Prime Minister Modi will want to ensure full attendance by the leaders, which include all BRICS members.
• Also, India wants more cooperation from China and Russia that are blocking discussions on a common language for the Leader’s declaration to be released at the G20 summit.
  • India might use the BRICS forum for talks on the issues over the paragraphs on Ukraine, climate change, debt financing and others that are being held up by their objections.

 

---

Q1) What is Contingency Reserve Arrangement of BRICS?

The BRICS Contingent Reserve Arrangement (CRA) is a framework established by these countries to provide financial support and stability in case of balance of payments problems or short-term liquidity crises. It was created to provide an alternative to the International Monetary Fund (IMF) for member countries in need of financial assistance during a balance of payments crisis. It aims to promote financial stability and economic cooperation among the BRICS nations.

 

Q2) What is New Development Bank?

The New Development Bank (NDB), formerly known as the BRICS Development Bank, is a financial institution established by the BRICS group of countries (Brazil, Russia, India, China, and South Africa) to support infrastructure and sustainable development projects in emerging and developing economies. Its headquarters are located in Shanghai, China.

 

---

Source: India-China ties in focus as PM Modi leaves for BRICS summit today | Indian Express | The Hindu | NDTV