ACHIEVERS IAS ACADEMY
- BRICS is the acronym for an association of five major emerging national economies: Brazil, Russia, India, China and South Africa ( South Africa was included in 2010)
- The BRICS members are all developing or newly industrialized country countries, but they are distinguished by their large, sometimes fast-growing economies and significant influence on regional affairs.
- All five are G-20 members
- The first formal summit meeting of the BRIC grouping was held in Yekaterinburg, Russia, in June 2009 with South Africa joining the group in December 2010, changing the nomenclature from BRIC to BRICS.
- Russia hosted the group’s seventh summit in July 2015.
- India will host the eighth annual Summit of the forum in Goa in October 2016.
- The five nations have a combined nominal GDP of US$16.039 trillion, equivalent to approximately 20% of the gross world product.
- The five BRICS countries represent over 3 billion people, or 42% of the world population.
BRICS countries have significantly slowed down in recent years because:
- South Africa only grown a 1% in 2015 similar to the 1.6% a year from 1994 to 2009.
- Brazil is in its worst recession since the 1930s.
- Russia in a recession as oil prices tailspin and sanctions weigh.
- China’s slowdown is set to be a drag on global growth and is reported to be the slowest in the last 25 years.
- To achieve sustainable economic growth and an increase in the income of citizens based on diversified economy.
- Technological modernisation and innovative development
- multilateral cooperation in nuclear energy, aircraft engineering, Space exploration, energy efficiency and alternative energy.
- Information, telecommunications and new medical technologies, and development of drugs.
- Processing of mineral resources
- Agricultural production growth , promote cooperation in agricultural technology development and exchange.
Development so far:
- In June 2012, the BRICS nations pledged $75 billion to boost the lending power of theInternational Monetary Fund (IMF).
- The BRICS group of countries have been planning an optical fibre submarine communications cable system to carry telecommunications between the BRICS countries, known as the BRICS Cable
- On 15 July 2014, the first day of the 6th BRICS summit held in Fortaleza, Brazil, the BRICS states signed the Agreement on the New Development Bank, which makes provisions for the legal basis of the bank.(The idea for setting up the bank was proposed by India at the 4th BRICS summit in 2012 held in Delhi.)
- Treaty for the Establishment of a BRICS Contingent Reserve Arrangement, signed at Fortaleza, Brazil on 15 July 2014 Which is a framework for the provision of support through liquidity and precautionary instruments in response to actual or potential short-term balance of payments pressures
- The group established the BRICS Business Council, made up of 25 prominent entrepreneurs from the five countries and representing many industries and economic sectors.
- The BRICS also formed an information-sharing and exchange platform that expands beyond economic cooperation to also involve educational, cultural, and environmental engagement.
Importance of BRICS
1. The BRICS countries act as one to promote a more legitimate international system, including advocating reform of the UN Security Council.
2. The BRICS group also acts as a bridge between developed and developing countries.
- In the WTO, the BRICS countries are trying to promote a fair order regarding agricultural policies.
- BRICS are attempting to promote the liberalization of the international economic order to diminish agricultural subsidies in the United States and the European Union, which would make developing countries’ agricultural products more competitive.
3. The BRICS group will also play an important role in assisting developing countries in gaining an advantage in trade and climate change negotiations, as well as on issues related to the export of manufacturing products.
4. BRICS have a shared interest in challenging the current governance of Western financial institutions like the International Monetary Fund and the World Bank for that they have announced the establishment of the bank.
5.Through BRICS, the countries can have multilateral relations in their local currencies. Thus, weakening the “US Dollar”. This helps all of them directly as the ForEx is not depleted and their own currencies are strengthened.
6. BRICS Banks will help in infrastructure development of developing countries .
Disparities with BRICS :
1. The dominance of China in BRICS is problem for others.
2. China’s political aspiration creates a challenges that has made it difficult for it to make consensus.
3. China’s manipulation of its currency has resulted in significant problems for the manufacturing sectors of other emerging powers. Central banks of other countries have registered protest against undervalued yuan
4. It maintains a low profile on security issues.
5. The BRICS have little in common. The Chinese economy is 28 times the size of South Africa’s. Income per person in India is one-tenth that in Russia.
6. Brazil, India, South Africa are democratic countries while Russia, China are authoritarian regimes
7. Russia, Brazil and South Africa export different commodities, while China exports manufactured goods and India exports services.
What Value Does BRICS Really Add To India?
- From an Indian perspective, BRICS is a strategic geo-economic alliance that seeks to move the narrative emerging from the Bretton Woods institutions towards alternative models of development and governance — through the sheer weight of the incongruent collective.
- Aims to collectively boost bargaining power and clout on global issues.
- Also strengthen economic and political ties among the member-countries on the lines of South-South co-operation.
- With Brazil, India has a unique partnership arrangement that has attracted international attention. Both countries have directly challenged Western nations over free trade during various rounds of WTO negotiations, most notably at the 2003 Cancun meeting.
- Cooperation with other BRICS member-states provides an excellent opportunity to share its development experiences with them as well as learn from their experiences.
- India can resolve the age-old mistrust and complicated relationship with China since the 1962 war between them.
- By improving relations with China and by co-operating in a multilateral forum like BRIC, India would like to stabilize the regional environment
- India wants to strengthen its ties with Russia within the multiple co-operative networks it believes that Russia being a great power can influence the conduct of Pakistan.
- India will host the 8th BRICS Summit October 2016
- India assumed Chairmanship of the organization in February 2016
- The BRICS have had moments of success that have built on this economic strength to bring opportunity to both India and the remaining four members.
One example of this is the BRICS Development Bank, which is currently headed by the former leader of India’s largest private bank.
- The Development Bank has granted India and its fellow BRICS-members the ability to counter similarly-focused financial institutions dominated by the West.
- India has much to gain from diversifying its trade and currency basket by being a key Brics player.
- As with the AIIB, India should not hesitate to join or create other BRICS initiatives that may have strategic implications for global trade, finance, cyberspace, and the larger economic system.
- The Atlantic powers need to recognise that India’s role within BRICS is a bulwark against such impulses, and encourage its leadership in similar plurilateral forums.
- BRICS members should democratise the bank’s functioning if new stakeholders are included in the future. They must find ways to engage the recipients and beneficiaries in its decision-making apparatus.
- With the US under the Obama administration appearing preoccupied with internal troubles and the Eurozone mired in a debilitating economic crisis, a vacuum is increasingly being felt in the international system. This presents an ideal opportunity for the BRICS to finally emerge as major global players.
- The Environment Ministers of BRICS countries are meeting on September 16 2016 in Goa, to strengthen mutual cooperation. The BRICS Ministers are also expected to discuss thematic areas of mutual interest and prioritise actions for cooperation in critical areas like air and water pollution, liquid and solid waste management, climate change and conservation of biodiversity. The meeting assumes significance after the adoption landmark global environmental agreements like Addis Ababa Action Agenda on Financing for Development, Sustainable Development Goals and Paris Agreement last year.
BRICS NSAs agree to pool their efforts to counter terrorism & violent extremism emanating from Pakistan
- National Security Advisers of BRICS countries have agreed to pool their efforts to counter terrorism and violent extremism emanating from Pakistan.
- The representatives highlighted the need for resolution of outstanding disputes in the West Asia and North Africa region through dialogue, peaceful means and in accordance with international law and the principles of the UN charter.
- BRICS representatives, agreed to strengthen joint efforts on enhancing cyber security, combating cyber-crimes, and improving cooperation between technical and law enforcement agencies.
- The representatives agreed to expand BRICS Counter Terrorism cooperation to include measures for denying terrorists access to finance and arms and ammunition.
- They underscored the need for a global legal regime to deal with the menace of terrorism.
- It was also decided to explore regular energy dialogue for long and medium term energy security issues.
- Policy makers and experts from BRICS countries emphasized the need to focus more on bringing people in urban areas together by ending social exclusion while developing smart cities using technology only as a tool.
- They stressed on the need to ensure effective urban governance supported by a strong political leadership and vision to enable cities attract huge investments required for building infrastructure.