Beyond Boundaries: BRICS: AN ENIGMA

Brigadier Rajiv Mahna

14th BRICS summit was held virtually on June 23 and 24, with China in chair. BRICs (Brazil, Russia, India, China) was an acronym mentioned by economist Jim O’Neill, of Goldman Sachs, in Global Economy Paper No 66, titled ‘Building Better Global Economics BRICs. He later explained in 2021, that his primary goal while formulating that document was to make a case for changing the framework for global economic governance and the potential of the countries mentioned in the acronym was determined by following standard methodology of macro economics which involves considering two variables, size of workforce and economy’s productivity. Question that, whether these countries would realise their potential in future, was beyond the scope of that analysis. Incidentally, the original recommendation of the Goldman Sachs paper was that these countries be made part of G-7. This recommendation never saw light of the day, but in 2006, the subject four countries initiated the process of informal diplomatic coordination, during annual meetings of Foreign Ministers at the margins of the General Debate of the UN General Assembly (UNGA). Global financial crisis of 2008, which flagged the serious concerns regarding the sustainability of dollar dominated world economy acted as a catalyst and BRICs, a grouping of world’s emerging economies was formed. The first BRIC Summit took place in 2009 in the Russian Federation and focused onissues related to reforms of the global financial architecture.South Africa was invited to join BRIC in December 2010, after which the group adopted the acronym BRICS.
BRICS does not exist in form of organization. It is an annual summit between the leaders of five nations. The Chairmanship of the forum is rotated annually among the members, in the sequence as the countries’ name appear in the B-R-I-C-S. BRICS cooperation in the past decade has expanded to include an annual programme of over 100 sectoral meetings. Despite the sceptic Western view, two facts which characterise this grouping of nations with minimal commonality, cannot be ignored; One, this grouping occupies 27% of the world’s land mass in which 42% of the world’s population lives and contributes towards 24% of global GDP, and 16% of Global trade, producing 33% of the world’s food and Two, despite the LAC friction between India and China and Ukraine crisis, this forum which has now met for 14 times, provides interaction space to the leaders of the countries which may not see eye to eye or hold different views. BRICS countries broadly cooperate in Economic, Political & Security and People-to-People exchange, spheres.
Recent BRICS meeting also provided a unique opportunity to the participating countries for demonstrating their ‘Exclusive from Blocks’ attitude and preferences. India, Brazil, and South Africa clearly announced their intent of remaining simultaneously engaged with international actors which hold divergent world views. This meeting was held just one month after the Quad summit in Tokyo, attended by India as a member. Brazil joined BRICS meeting after attending the Ninth Summit of the Americas which was held in US from June 6 to 10. BRICS meeting was organised just days prior to the G-7 summit, scheduled to be held in Germany from June 26 to 28, where both India and South Africa have been invited. Russian attendance sent a message to the world community that the country is not totally isolated.
During the BRICS meeting, both Russian and Chinese Presidents, Putin and Xi Jinping expressed severe criticism of the unilateral sanctions imposed by US and Europe, post Ukraine conflict. The BRICS declaration supported peaceful resolution of the conflict through Russia-Ukraine talks and called for the UN to strengthen efforts to manage the humanitarian crisis in Ukraine. Leaders also adopted similar position on Afghanistan and urged for the formation of an inclusive and representative government which ensures that the Afghan soil is not used for attacking other countries and providing shelter to terrorist organisations. Brazil President Bolsonaro recommended that BRICS should take collective initiative for achieving UN reforms. South African President Ramaphosa, called for more equitable access to vaccines, and urged developed economies, international agencies, and philanthropic organisations to procure vaccines from manufacturers in developing economies, including in Africa. BRICS countries agreed to pursue expansion of the group to ‘BRICS Plus’ and following up on the out reaches made this year towards Argentina, Egypt, Indonesia, Kazakhstan, Saudi Arabia, UAE, Nigeria, Senegal, and Thailand, for inviting them to attend development meetings. Indian PM Modi focussed on the common agenda of economic governance, the importance of multilateral systems, and other BRICS initiatives. Seven significant BRICS initiatives which have been undertaken/conceived include:-
C Establishment of New Development Bank or BRICS bank with starting capital of $50 billion. It has so far approved 70 infrastructure and sustainable development projects worth $ 25.07 billion which includes $6.9 billion loan provided to India
C Contingent Reserve Arrangement. BRICS Contingent Reserve aims to provide short-term liquidity support to the members through currency swaps to help mitigating Balance of Payment crisis. In this context, during the meeting, President Putin spoke of a new reserve currency based on a basket of commodities as a counter to the Dollar based system.
C Deliberations had been carried out in the past on the concept of BRICS payment system as an alternative to the Society for Worldwide Inter-Bank Financial Telecommunication (SWIFT) payment system. Operationalisation of such system by using national currencies, as suggested by Russian Finance Minister has emerged as an urgent requirement, since post Ukraine conflict, Russia has been frozen out of SWIFT.
C Conclusion of Customs agreement to coordinate and ease trade transport between BRICS countries
C Establishment of R&D centre on Covid vaccine research in South Africa
C Launch of a Remote Sensing constellation of satellites, of 6 satellites, including 2 from India, 2 from China, 1 from Russia, and 1 made in Brazil-China collaboration.
C Formation of a working group named Digital BRICS Task Force (DBTF) for evolving cooperation mechanism in the field of digitisation.
Despite many divergences amongst the member countries, particularly between India and China, regarding UN reforms and terrorism, the BRICS remains a positive forum which possesses considerable potential for influencing the events in the emerging multi-polar world. China is not supportive of Indian claim for permanent membership of UN Security Council. While acting against terrorism, at times India and China have found each other sitting on the opposite sides of the table. Recent blocking by China of an attempt by India to sanction the Let terrorist, Abdul Rehman Makki, at the UNSC sanctions committee, is an example of such situations. However, the balance sheet indicates that the BRICS has been reasonably active during the first decade of its existence, wherein many issues of common interests have been identified and suitable platforms created to address them. For BRICS to remain relevant in the future, each member must make a realistic assessment of the opportunities provided by and inherent limitations of, such informal grouping. They must build on the success of the NDB and invest in additional BRICS institutions. BRICS Plus is an idea whose time has come. Ideally BRICS should represent larger proportion of the world population and cater for the interests of all developing countries which face multifarious challenges. BRICS should consider a BRICS-led effort to meet their commitments under the Paris Agreement on climate change and the UN’s sustainable development goals.Idea of setting up a BRICS Credit Rating Agency (BCRA) as proposed by India, to counter Western agencies like Standard & Poor’s, Moody’s etc should also be considered on urgent basis. agenda. BRICS is not merely a platform, it represents a thought process which demands equality in terms of representation in supra-national bodies and even-handed treatment, while addressing problems like climate change, which had been created, at the first placed by the developed countries. BRICS, as a grouping will be severely tested by the ongoing churning of the global geopolitical ocean and for surviving these upheavals, spirit of maintaining cooperative interaction amongst the member countries is a necessity.
Signing off for the week, by quoting Ian Bremmer, an American Political Scientist,”International institutions like the Security Council, the General Assembly, the G20, the BRICs, the IMF, etc., continue to be little more than an extension of the (increasingly conflicting) values and interests of member states.”
(Brigadier Rajiv Mahna YSM, SM, VSM is an Indian Army Veteran who has chosen to remain a student for the lifetime)