BRICS

BRICS

BRICS is an acronym for the informal grouping of 5 emerging economies, Brazil, Russia, India, China, and South Africa. The grouping was formed in 2009, and since then BRICS nations have met annually at formal summits.

Achievements/Initiatives of BRICS

1. Powerful driver for the global economy:
   • Over the past decade, the combined BRICS GDP has grown by 179%.
   • Total trade of the member nations has expanded by 94%.
2. New Development Bank (NDB): With every nation having equal voting rights, it focuses on lending to infrastructure projects.
3. Contingent Reserve Arrangement (CRA): An alternative to the IMF, CRA aims to provide short-term liquidity support to the members through currency swaps to help mitigate BOP crisis situations.
4. PartNIR: BRICS partnership on New Industrial Revolution.
5. BRICS Business Council: 25 prominent entrepreneurs from Brazil, Russia, India, China, and South Africa, representing various industries and sectors in the BRICS nations.
6. BRICS Women Business Alliance: Recently created, both as a women empowerment measure and as a tool to bring “a distinctive perspective on issues of interest for the business community.”
7. BRICS Bond Fund: Proposed BRICS Bond fund will help member countries conduct intra-BRICS trade in national currencies, avoiding the U.S. dollar.
8. BRICS Credit Rating Agency: Independent rating agency proposed by India in 2018.
9. Bilateral Issues addressal: Example: BRICS Summit in Xiamen in 2017 helped expedite an end to the Doklam standoff.

Challenges for BRICS

1. Institutional:
   • Dominance of Big three: Marked dominance of big three (Russia-China-India) is a challenge for the BRICS as it moves ahead.
   • Inequality: South Africa is not robust economically compared to its BRICS counterparts, and its economy has been performing badly since 2008.
   • Different nature of State: India, Brazil, and South Africa are liberal democracies, whereas China and Russia have different political structures.

• Narrow agenda: BRICS will need to expand its agenda for increasing its relevance in the global order, including issues like terrorism, climate change, etc.
• Differential agendas: All the BRICS nations have different global aims and ambitions, and there is a lack of coherence among them.
• Untested Foundational principles: Principles like respect for sovereign equality and pluralism in global governance are liable to be tested. Example:
  • Military standoff between India and China in Doklam plateau and Galwan valley is a blot on foundational principle.
  • China’s increasing assertiveness in South China Sea.
  • Belt and Road Initiative of China.
• Global Antagonism: China and Russia are often seen on opposite ends of the established order in respect of Democracy, human rights, and regional peace.

1. Operations Related:
   • Poor Intra-BRICS Trade: Despite combined population accounting for 40% of humanity, intra-BRICS trade is just 17% of world trade.
   • Geographical Discontinuity: Most of the BRICS Nations are in different continents, making bilateral trade, joint exercises difficult.
   • Lack of Unity: In the issue of expansion of the UN Security Council, BRICS exposed its disunity, as China strongly opposes India’s seat as a permanent member.
   • Lack of dispute redressal: BRICS has no internal mechanism for resolving disputes between member nations.
     • India-China issues hardly form any agenda on the Forum.
   • Need to Diversify: There are other emerging economies which can be included, like Mexico, Indonesia, and South Korea, who can make the platform effectively that of emerging economies.

Relevance of BRICS to India

1. Economic Relevance
   • Critical Economic Engine: With 40% of the world’s population and about 30% of the GDP, BRICS has proved to be a critical economic engine.
   • Economic Convergence: It is a platform where India shares similar economic interests as the other nations.

• Credit Related: The NDB will help India to raise and avail resources for infrastructure and sustainable development projects.
• Alternative to World Bank/IMF: The NDB and Contingent Reserves can be an alternative to World Bank and IMF resources.

1. Geopolitical Relevance
   • NSG and UNSC Permanent Seat: India remains engaged with the other BRICS countries on its NSG membership, particularly China.
   • Balancing Relationships: India has to maintain the balancing act between Russia-China on one side and the US on the other side.
   • Security of India: BRICS put counter-terrorism on top of the agenda, which has been a success for India. This could be helpful in isolating Pakistan.
   • Platform to resolve Bilateral Issues: Especially between India and China.
2. Others
   • Platform to Voice developing nations’ concerns: BRICS can help protect the rights of developing countries at global platforms like WTO and climate change talks.
   • Scientific Cooperation: Regional Data Network is proposed for collecting astronomical, celestial, and space-related data.
   • COVID Aid: There is a lot of potential in BRICS in respect of global pandemics and how to effectively mitigate and fight them.
     • Russian Vaccine development and Chinese effectiveness in curbing its spread.
     • Brazil became the 1st nation to receive 2 million doses of vaccines from India.

Way Forward

• Internal Redressal: Internal issues between nations must also be dealt with actively within the forum, keeping a positive multilateral outlook.
• Research: There is a need to have its own research into issues rather than depending on other global reports.
• Broad Perspective: It must act and openly engage in issues beyond the economic agenda.
• Converging developmental interests: Russia, China, and India are all actively engaged in development efforts, thus there must be convergence in these efforts.
• Unified Investments: Currently, BRICS does not have enough capital to be an alternative to Bretton Woods institutions, so unified investment can ensure more resources.

• Confidence Building: BRICS should be used as a platform to resolve issues between all member nations and regarding domestic policies.
• Expansion: BRICS must be expanded to reflect economic realities today by including other emerging nations.
• Value System: BRICS must respect the values of rule of law, human rights, and mutual cooperation within its nations. ​​