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Baba’s Explainer – BRICS – 14th Summit

  • IASbaba
  • June 27, 2022
  • 0
International Relations
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Syllabus

  • GS-2: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

Context: BRICS, a bloc of five disparate countries, has made it to its 14th summit (2022), suggests there remains a strong convergence of interests amid undeniable differences.

  • In the recently held virtual meeting hosted by China, India has described the binding glue as “a similar approach to global governance”.
  • The Beijing Declaration that followed the 14th summit, was premised on “making instruments of global governance more inclusive, representative and participatory”.

 

What is the origin of BRICS?
  • BRICS was not invented by any of its members. In 2001, Goldman Sachs’ Jim O’Neill authored a paper called “Building Better Global Economic BRICs”, pointing out that future GDP growth in the world would come from China, India, Russia and Brazil.
    • Significantly, the paper didn’t recommend a separate grouping for them, but made the case that the G-7 should include them
    • The paper further that BRIC economies combined would outstrip the western dominated world order before 2039.
  • 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. Shortly afterwards, in September 2006, the group was formalised as BRIC during the 1st BRIC Foreign Ministers’ Meeting,
  • The global financial crisis of 2007-08 reinforced the idea as BRIC countries had been relatively unscathed in the market collapse.
  • After a series of high level meetings, the 1st BRIC summit was held in Yekaterinburg, Russia on 16 June 2009.
  • BRIC group was renamed as BRICS (Brazil, Russia, India, China, South Africa) after South Africa was accepted as a full member at the BRIC Foreign Ministers’ meeting in New York in September 2010.
  • Common ground for the members was built by ensuring that no bilateral issues were brought up in the forum.
  • BRICS may be disparate countries on four continents, but they together represent 27% of the world’s land mass, and 42% of the world’s population, 24% of global GDP, and 16% of Global trade, and produce 33% of the world’s food
  • Over a period of time, BRICS countries have come together to deliberate on important issues under the three pillars of
    • political and security
    • economic and financial
    • cultural and people to people exchanges.
What are the practical BRICS initiatives?
  • Regular Summits: All the contradictions and criticism notwithstanding, BRICS is an idea that has endured two decades, an idea its members remain committed to, and not one has skipped the annual summits held since 2009.
  • Alternative to World Bank: New Development Bank or BRICS bank- multilateral bank with a starting capital of $50 billion- it has so far approved 70 infrastructure and sustainable development projects worth $ 25.07 billion, including about $6.9 billion in loans to India
  • Contingent Reserve Arrangement- to help members whose currencies are buffetted by global economic trends. In other words it is an arrangement fund to deal with global liquidity crunches.
  • BRICS 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.
  • Trade Cooperation: Customs agreement to coordinate and ease trade transport between BRICS countries
  • R&D centre on Covid vaccine research in South Africa
  • Space Cooperation: A Remote Sensing constellation of satellites has been launched – with 6 satellites including 2 from India, 2 from China, 1 from Russia, and 1 Brazil-China collaboration
  • Digital Cooperation: Digital BRICS Task Force (DBTF) and a plan to hold the Digital BRICS Forum in 2022
  • Stand on Geopolitical Events: While its foundation was economic, BRICS statements have always been deeply political, calling for more inclusion in the multilateral world order, decrying U.S.-Europe backed military interventions, and expressing an independent line on several world events from Afghanistan to West Asia.
    • BRICS has repeatedly called for reforming multilateral institutions, including the UN and the UNSC, International Monetary Fund and World Bank and the World Trade Organization.
    • BRICS supported negotiations at the WTO for the waiver of trade-related intellectual property rights (TRIPs) for vaccines and medicines to tackle the Coronavirus pandemic.
What are the main contradictions in BRICS?
  • Vulnerabilities in Economies: BRICS countries never kept the promise of developing economies- and still only make up about a quarter of the global GDP.
    • Russia, Brazil, South Africa economies have frequently been on the verge of collapse while the Indian economy has been disappointing, particularly in the past decade. C
    • hina which was in touching distance of the US, has been dealt a big blow by Covid and the lockdowns that have followed.
    • In 2015, Goldman Sachs wound up its BRIC fund, which had reportedly lost 88% of its asset value since 2010, and merged it with a larger emerging markets fund.
  • Bilateral issues- BRICS members don’t discuss bilateral issues, but issues like the India-China border dispute and PLA transgressions over the LAC are bound to have an impact on BRICS solidarity in the long run.
  • Contrasting Approaches On terrorism: The recent blocking by China of an attempt by India to sanction the LeT terrorist, Abdul Rehman Makki, at the UNSC sanctions committee, served as a reminder of contrasting approaches.
  • Lacks Focus: Despite being formed in 2006, the group still mystifies all and lacks focus.
  • Little in Common: Started as an alternate grouping of emerging economies that could challenge the post-War world order, it has been criticised as a rag-tag band of disparate countries across four continents with little in common
  • Russia-China Axis: Ties between countries such as Russia and China are growing at a much strong pace than the group’s own cohesion
  • On UN Reforms: India and Brazil have made common cause on pushing for an expanded UN Security Council, yet China has suggested it is not in favour of a permanent seat for India.
  • On BRI- India and Russia are not part of China’s big infrastructure push the Belt and Road Initiative, while Brazil and South Africa are.
  • Ukraine issue- On Ukraine, the bloc affirmed a commitment to respect sovereignty, despite Russia’s actions, and stopped short of condemning NATO, as Russia and China have done, reflecting different views within BRICS.
  • Relationship with West- While China and Russia have come closer with the announcement of a no-limits partnership, the rest have all made outreaches to the US and Europe.
  • Long Term Investor Sentiment is dim for the group due to following reasons
    • South Africa’s debt-laden economy and negative current account has led some to predict an economic collapse in the next decade.
    • Brazil’s poor handling during the Covid-19 crisis has ranked it amongst the world’s worst-affected countries and its recovery is expected to be delayed.
    • India’s economic slowdown was a concern even before Covid-19 hit, and government policies like “Aatmanirbhar” were seen as a plan to turn inward.
    • There are concerns about aggressions from China in the South China Sea, the border with India and internally in Hongkong and Xinjiang
What are the key takeaways of the 14th BRICS summit held in 2022?
  • Russia is not isolated in wake of Ukraine Conflict: Russian President Putin participated in the meeting indicating that Russia is not isolated, economically or otherwise, as the US and Europe may like to project. The bloc also referred to the need to avoid politicisation of the work of the UNSC sanctions committee.
  • Balancing act by India: For India, it indicates that it will continue to walk an independent balance in the world. BRICS leaders met one month after the Quad summit in Tokyo, and days before a G-7 summit in Germany, where both India and South Africa have been invited to attend a few sessions.
  • Pragmatism by Asian Neighbours: India and China have been willing to attend the BRICS summit despite the standoff between their armies at the border since 2020, indicating that the Indian government is willing to put its differences with China.
  • Continued global relevance of China: BRICS countries have continued to meet during the Covid pandemic, and this summit hosted by China reiterated their willingness to work with China on Covid research, vaccines etc, a contrast to more critical views of China at other western-led groupings.
  • Broad range Coordination: The leaders held discussions on Counter-terrorism, trade, health, traditional medicine, environment, science, technology & innovation, agriculture, technical and vocational education & training.
  • On Ukraine, the bloc affirmed a commitment to respect sovereignty, despite Russia’s actions, and stopped short of condemning NATO reflecting different views within BRICS.
  • Proposal for New reserve Currency: Russian President Putin spoke of a new reserve currency based on a basket of commodities during the summit- which is being developed, as a counter to the Dollar based system.

Mains Practice Question –Do you think BRIS can survive despite its contradictions? Discuss.

Note: Write answers to this question in the comment section.


 

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