Assessing BRICS and Its Deliverables

On the sidelines of the G-20 conference held in Hangzhou, China on 4 September  2016, Prime minister Shri Narendra Modi in an address to the BRICS leaders meeting described BRICS as ‘an influential voice in international discourse’ and how it was their shared responsibility in shaping the global agenda and in assisting developing nations achieving their objectives.

From the initial four BRIC countries (Brazil, Russia, India and China) whose foreign ministers met in New York in September 2006 to build an inclusive association of emerging economies, BRICS (with the addition of South Africa in 2010) has come a long way. As of 2015, the five BRICS countries together represent over 3 billion people or 43% of the world population with a combined GDP of over USD $ 16 trillion and an estimated USD$ 4 trillion in combined foreign reserves.

Over the past decade, seven summit meetings have taken place, attended by leaders of the respective BRICS countries with the first summit taking place in Yekaterinburg, Russia in 2009 and the eighth summit slated to take place in Goa, India,15-16 October  2016.

The First Summit (2009) was mostly focused on discussing economic and financial issues arising out of the 2008 financial crisis with emphasis on reform of international financial institutions and in urging the G-20 to do its utmost in the recovery of global economy.

At the Second Summit (2010), the document, Brasillia Declaration envisaged the launching of several intra-BRICS Cooperative Institutions including a meeting of National Security Advisors, a Business Forum, a Think Tank Seminar and a meeting of Ministers of Agriculture to boost the agricultural base of the respective member countries.

With admission of South Africa to the BRICs fold, the Third Summit (2011) added muscle to its geographical representation, thus opening a new foray in to the African continent. Apart from discussing economic issues, an Action Plan was formulated to deepen areas of cooperation in diverse fields such as health, Science and Technology, renewable energy, peaceful use of nuclear energy, eradication of hunger and poverty as well as re-emphasizing the UN Millennium Development Goals.

The Fourth Summit (2012) was remarkable for enunciating financial cooperation with third world countries through the establishment of the BRICS Bank for financing infrastructure needs and sustainable development projects of BRICS and other developing countries. An agreement was also signed to facilitate credit approval in local currencies for establishing and strengthening the economies of BRICS countries.

The Fifth Summit (2013) laid the foundation for ushering Contingence Reserve Arrangement with an initial amount of USD $ 100 billion, adoption of feasibility report for setting up BRICS Development Bank and establishing two important centers, namely, BRICS Business Council and BRICS Think Tanks Council for enhanced coordination and cooperation among member countries.

At the Sixth Summit (2014) with theme Ínclusive Growth, Sustainable Solutions’, Constitutive agreements for the New Development Bank ( Paragraphs 11  and 12 of the Fortaleza Declaration) to fund infrastructure and sustainable development projects in emerging markets were signed. Furthermore, under Contingency Reserve Arrangement (CRA), an amount of USD$ 100 billion was allocated for forestalling short-term Balance of Payments pressures.

The New Development Bank (NDB), that was decided at the Sixth Summit had a startup capital of USD$50 billion with the capital increased to USD$ 100 billion over time. With Pretoria, South Africa, being the regional hub and named as the ‘New Development Bank Africa Regional Center’, each of the constituent countries, Brazil, Russia, India, China  and South Africa, made an initial contribution of USD$ 10 billion to the fund with the primary focus of lending on infrastructure projects of up to an estimated lending of up to USD$ 34 billion annually.

The Seventh BRICS Summit (2015) taking place in Ufa, Russia, underwent the process of ratification of constituting agreements of Contingency Reserve Arrangement as well as the New Development Bank. With the consent of the Bank’s Council of Governors and Board of Directors, Contingent Reserve Arrangements became fully operational thus providing a clear road map to strengthen, diversify and enhance trade and investment among the five BRICS countries.

With the Eighth BRICS Summit (2016) taking place in Goa , and with India being the host country with the theme ‘Building Responsive, Inclusive and Collective Solutions’, the BRICS strategic roadmap is likely to get significant boost ‘guided by principles of openness, solidarity, equality, mutual understanding, inclusiveness and mutually beneficial cooperation’.

BRICS countries are acutely aware of the lack of collective identity, differing strategic cultures and geographical imperatives among member countries. With global economic recovery facing serious downside risks, what is commendable is the tangible outcome at fostering multilateral cooperation and in reforming the global governance architecture. In the short to intermediate term, one can describe BRICS as a reasonably successful international regime operating in South-South axis with the possibility of diversification in Eurasian and continental fronts. In the long term, BRICS does have the potential of building a broad consensus on soft developmental planks for fortifying the Global South.

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The author is Professor of Political Science, Jamia Millia Islamia University, New Delhi. Views expresed are personal.