11th NOVEMBER, 2019
|RAJYA SABHA TELEVISION|
INDIA’S WORLD: 11th BRICS SUMMIT
This year theme of BRICS is ‘Economic Growth for an Innovative Future’. The BRICS countries are Brazil, the Russian Federation, India, China and South Africa, convene for a BRICS Leaders’ Summit annually.
The 11th summit is taking place at Brasilia in Brazil. BRICS majorly focus on spheres of political, socio-economic coordination, in which member countries have identified business opportunities, economic complementarities and areas of cooperation.
Leaders of five nations are also expected to discuss issues like the fight against organized crime, counter-terrorism, money laundering, scientific-technical cooperation and the digital economy.
Significance of the BRICS:
- The BRIC are both the fastest growing and largest emerging markets economies. They account for almost three billion people, or just under half of the total population of the world.
- In recent times, the BRIC have also contributed to the majority of world GDP growth. According to various economists’ projections, it is only a matter of time before China becomes the biggest economy in the world – sometime between 2030 and 2050 seems the consensus.
- The rising importance of BRICS economies can be seen in the growth of imports. Their import and service demands, at over $2 trillion, accounts for 13.5 percent of global imports, up from just 6 percent 10 years ago. This represents a 277 percent growth in imports. Global growth of imports during the same period was just 92 percent, while imports in industrialized economies grew only 72.3 percent.
- The marked dominance of big three Russia-China-India is challenge for the BRICS as it moves ahead. To become a true representative of large emerging markets across the world, BRICS must become pan-continental. Its membership must include more countries from other regions and continents.
- The BRICS will need to expand its agenda for increasing its relevance in the global order. As of now, climate change and development finance, aimed at building infrastructure dominate agenda.
- As BRICS moves forward foundational principles of BRICS i.e. respect for sovereign equality and pluralism in global governance are liable to be tested as the five member countries pursue their own national agendas.
- China’s efforts to co-opt nation states, which are integral to its Belt and Road Initiative, into a broader political arrangement has potential to cause conflict among BRICS members especially China and India.
- Recession in Russia and Brazil: The political and economic isolation of Russia, orchestrated by the US after the Ukraine crisis, has had a tremendous negative impact on the once surging economy. Even Brazilian economy is slipping into recession.
- Failure to sustain economic growth: the emerging member countries have failed to gain any momentum for sustained growth.
- Structural disparity between China and other BRICS members: Chinese economy has the largest share among the member countries and it accounts for 38 percent share in the total export of BRICS. This has resulted in dominance of China in the BRICS bloc and in turn has stoked the economic nationalism in other member countries.
- Tension within the BRICS bloc: There is lack of policy coordination within the member countries owing to troubled political relations between some members. For example, India- China ties have witnessed a steady deterioration over the last few years.
Importance for India
- India can benefit from collective strength of BRICS by way of consultation and cooperation on economic issues of mutual interests, as well as topical global issues, such as, international terrorism, climate change, food and energy security, reforms of global governance institutions, etc.
- India remains engaged with the other BRICS countries on its NSG membership.
- The NDB will help India to raise and avail resources for their infrastructure and sustainable development projects. The NDB has approved its first set of loans, which included a loan of US$ 250 million in respect of India for Multitranche Financing Facility for Renewable Energy Financing Scheme’.
- BRICS did well in its first decade to identify issues of common interests and to create platforms to address these issues.
- For BRICS to remain relevant over the next decade, each of its members must make a realistic assessment of the initiative’s opportunities and inherent limitations.
- BRICS nations need to recalibrate their approach and to recommit to their founding ethos. BRICS must reaffirm their commitment to a multi-polar world that allows for sovereign equality and democratic decision making by doing so can they address the asymmetry of power within the group and in global governance generally.
- They must build on the success of the NDB and invest in additional BRICS institutions. It will be useful for BRICS to develop an institutional research wing, along the lines of the OECD, offering solutions which are better suited to the developing world.
- 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. This could include e.g. setting up a BRICS energy alliance and an energy policy institution.
- NDB in partnership with other development finance institutions could be a potent vehicle to finance progress towards the sustainable development goals amongst the BRICS members.
- Idea of setting up a BRICS Credit Rating Agency (BCRA) as proposed by India, opposed to Western agencies like Standard & Poor’s, Moody’s etc. can be on BRICS future agenda.