BRICS: The Evolution, Significance, Initiatives, Challenges, and Contradictions

 

• BRICS is a term representing a coalition of five prominent emerging economies: Brazil, Russia, India, China, and South Africa. 

• These nations have united to establish a distinctive platform fostering cooperation and partnership across diverse sectors. 

• The acronym BRICS encapsulates this assembly of the world's foremost emerging economies: Brazil, Russia, India, China, and South Africa.

• In 2001, British Economist Jim O’Neill coined the abbreviation BRIC to characterise the four emerging economies of Brazil, Russia, India, and China. 

• The formalisation of this alliance took place during the initial gathering of BRIC Foreign Ministers in 2006. 

• Subsequently, in December 2010, South Africa received an invitation to join BRIC, resulting in the adoption of the acronym BRICS to encompass the expanded group.

• Headquarters : Shanghai, China

Chairmanship:

• The chairmanship of the forum is rotated annually among the members, in accordance with the acronym B-R-I-C-S.

• South Africa is the Chair for 2023

Evolution Of BRICS :

• In July 2006, the leaders of the BRIC countries – Brazil, Russia, India, and China – convened for the first time in St. Petersburg, Russia, on the sidelines of the G8 Outreach Summit. This informal gathering laid the groundwork for a new and impactful alliance.

• In September 2006, the quartet solidified its collaboration during the inaugural BRIC Foreign Ministers' Meeting, which took place alongside the General Debate of the UN Assembly in New York City.

• Building on these initial steps, a series of high-level engagements ensued, culminating in the momentous 1st BRIC summit held in Yekaterinburg, Russia, on June 16, 2009. This summit marked a significant turning point for the group, as it began to address crucial global issues and explore opportunities for collective advancement.

• Recognising the potential for broader representation and influence, the BRIC group expanded its scope in September 2010. With the inclusion of South Africa as a full member, the alliance was rechristened as BRICS – incorporating Brazil, Russia, India, China, and South Africa into its fold. 

• South Africa's participation as a member of BRICS was underscored by its attendance at the 3rd BRICS Summit, hosted in Sanya, China, on April 14, 2011. The addition of South Africa not only diversified the group's perspectives but also enriched its potential for collaborative impact.

Significance of the BRICS:

• With a combined population of 3.14 billion people, constituting 41% of the global populace, and a collective land area spanning 29.3% of the world's total, the BRICS alliance holds substantial geographic and demographic weight. 

• Economically, it contributes 24% to the worldwide GDP and holds a 16% share in global trade. 

• Together, the BRICS partnership stands as a formidable presence on the global stage, uniting influential emerging economies of considerable impact.

Over time, the BRICS countries have coalesced around three core pillars of engagement: 

• Political and security matters, 

• Economic and financial collaboration, and 

• Cultural and people-to-people exchanges. 

As the primary drivers of worldwide economic growth, these nations have continually united to deliberate on critical issues, offering insights and solutions that resonate on a global scale.

Foundations of BRICS Cooperation:

Political and Security Collaboration:

• BRICS seeks to bolster collaboration and open dialogues concerning global and regional security matters. 

• This includes addressing developments in the international political arena and modernising the multilateral framework to align with 21st-century requirements. 

• A pivotal focus within this pillar is the joint effort to counter terrorism and its funding, emphasising its significance in shaping global stability.

Economic and Financial Partnership:

• The BRICS nations strive to foster economic growth and development for the shared benefit of all member states. 

• By expanding cooperation within sectors like trade, agriculture, infrastructure, small and medium enterprises, energy, as well as finance and banking, the alliance aims to facilitate mutual prosperity. 

• This pillar underscores collaborative strategies and inventive approaches to realise the Sustainable Development Goals.

Cultural and People-to-People Exchanges:

• Enhancing interaction among the people of BRICS nations lies at the heart of this pillar. 

• It seeks to nurture cross-cultural, academic, youth, sports, and business connections through consistent exchanges. 

• Notably, this dimension includes engagements between parliamentarians and young scientists, underscoring the diverse spectrum of interactions facilitated within BRICS cooperation.

BRICS Initiatives:

New Development Bank: 

• At the Sixth BRICS Summit held in Fortaleza, Brazil in 2014, the member nations embarked on a significant endeavour by establishing the New Development Bank (NDB) headquartered in Shanghai, China. 

• Since its inception, the NDB has made substantial strides by approving many projects focused on infrastructure development and sustainability.

• In 2016, the NDB achieved full operational status, solidifying its role in driving positive change. Its headquarters in Shanghai serves as a hub for strategic planning and implementation.

• A unique feature of the NDB is its equitable distribution of shares among members, with each of the five nations holding an equal 20% share.

• Focus Areas of NDB are

• Clean Energy and Energy Efficiency
• Transport Infrastructure
• Water and Sanitation
• Environmental Protection
• Social Infrastructure
• Digital Infrastructure 

Contingent Reserve Arrangement: 

• In 2014, the BRICS governments formalised a treaty to create the Contingent Reserve Arrangement. 

• This arrangement serves as a proactive measure to address short-term imbalances in balance of payments. 

• Designed to provide mutual support among the BRICS nations, it plays a pivotal role in enhancing financial stability within the group.

BRICS Payment System: 

• Recognising the need for greater financial autonomy, the BRICS countries have undertaken the ambitious task of establishing an alternative payment system to SWIFT (Society for Worldwide Interbank Financial Telecommunication). 

• The urgency of this initiative escalated after the Ukraine conflict, which led to Russia being excluded from the SWIFT network.

Challenges of BRICS :

Disappointment in Diplomacy

• Expectations within BRICS (Brazil, India, and South Africa) that China and Russia would provide unwavering support for their bid to secure membership in the UN Security Council were met with disappointment. 

• This recurring issue of aspiration for greater UN influence exposes the diplomatic challenges the group faces.

China's Assertive Stance

• The BRICS consortium has witnessed internal conflicts, particularly exemplified by China's assertive actions along the Line of Actual Control. 

• This aggression significantly strained India-China relations, reaching their lowest point in decades.

Russia-China Alignment

• The aftermath of the Ukraine conflict witnessed a strengthening of China-Russia collaboration. 

• This consolidation poses a challenge for other BRICS members in maintaining a delicate equilibrium between the Western powers and the China-Russia axis.

Trade Imbalance within the Grouping:

• The trade dynamics within BRICS reveal a notable trade imbalance, with each member trading more with China than with each other. 

• This skewed trade pattern has led to accusations that the platform primarily serves China's interests, presenting a considerable challenge for partner nations to rectify their trade deficits.

Contention over a Common Currency

• China's insistence on implementing a common currency for intra-BRICS trade has caused internal friction. 

• This proposition adds another layer of complexity to the already strained internal dynamics.

Contradictions of the Grouping:

Fading the Charm:

• While the BRICS group has achieved commendable milestones and engaged in cooperative ventures across various sectors, its once irresistible charm has gradually waned. 

• Internal disagreements, coupled with external variables such as the repercussions of COVID-19, the Galwan confrontation, and the Ukraine conflict, have intensified worldwide economic strain. 

• These elements have further played a role in straining relations between India and China, as well as diminishing Russia's influence on the global platform.

Seeking Membership Amidst Turmoil

• Remarkably, despite the group's internal challenges and reduced luster, numerous nations express a strong desire to join the BRICS consortium. 

• This phenomenon encapsulates the contradicting nature of BRICS — a group grappling with its own internal contradictions while remaining appealing to aspiring members.

Path Ahead for BRICS: 

• Despite internal differences on key issues, BRICS remains pertinent in the realm of global affairs. The recent interest from 19 countries to join the group underscores its enduring significance in geopolitics and the economy.

• The trio of major economies within BRICS—Russia, China, and India—continues to wield influence as pivotal emerging markets, extending their relevance across continents.

• Ongoing crises, such as the Russia-Ukraine conflict and the past Doklam standoff between India and China, highlight the potential for disruptions in the political relationships within BRICS.

• However, the consortium must progress while upholding its foundational principles, including respect for sovereign equality and a diverse global governance framework. As member countries pursue their respective national agendas, the strength of these principles will be put to the test.

• To secure its relevance in the coming decades, as challenges mount, BRICS should reaffirm its commitment to a multi-polar world order. This orientation should prioritise sovereign equality and inclusive democratic decision-making, ensuring the consortium's enduring value.

UPSC Previous Year Question (PYQ)

Q. Consider the following statements: (2016)

1. New Development Bank has been set up by APEC.
2. The headquarters of New Development Bank is in Shanghai.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer:Option (b)

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