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India and BRICS

GS Paper 2

 Syllabus: International Relations

 

Source: TOI

 Context: 19 nations including Saudi Arabia, UAE, Algeria, Egypt, Bahrain, and Iran have expressed interest in joining the emerging-markets bloc of BRICS (Brazil, Russia, India, China, and South Africa).

 

About BRICS:

TopicInformation
BRICS (founded: 2009; HQ: Shanghai) is an acronym for the grouping of the world’s leading emerging economies, namely Brazil, Russia, India, China, and South Africa (included in 2010)
OriginThe term “BRIC” was coined by the British Economist Jim O’Neill in 2001 to describe the four emerging economies of Brazil, Russia, India, and China.
Share of BRICSBRICS brings together five of the largest developing countries, representing 41% of the global population, 24% of the global GDP, and 16% of the global trade (By 2028, BRICS is expected to make up 35 per cent of the global economy)
ChairmanshipThe chairmanship of the forum is rotated annually among the members, in accordance with the acronym B-R-I-C-S. South Africa is the chair for 2023.
Initiatives of BRICS1. New Development Bank (NDB) 2. Contingent Reserve Arrangement (CRA) 3. BRICS Payment System 4. Customs Agreements 5. Remote Sensing Satellite
New InitiativeBRICS is planning to launch its own “new currency” system, a major step towards de-dollarization (reducing dependence on the US dollar for trade)

 

Importance of BRICS for India:

ImportanceExample
Geo-PoliticsBRICS provides India with an opportunity to balance its strategic interests between the US and the Russia-China axis.
Global Economic OrderBRICS plays an important role in the G20, in shaping global economic policies and promoting financial stability.
Voice of Developing NationsBRICS has emerged as the voice of developing countries and is playing a significant role in protecting the rights of developing countries.
TerrorismBRICS provides a platform for India to galvanize its efforts against terrorism and has worked within the grouping to take a strong stand against terrorism.
Global GroupingBRICS provides an opportunity for India to actively engage with China and resolve mutual disputes. It also helps in garnering support from other partner countries.

 

 

Challenges for BRICS:

ChallengeExample
Economic DivergenceBrazil and Russia have been experiencing economic recessions in recent years, while China and India have sustained high growth rates. South Africa’s economy has been performing poorly, with high levels of unemployment and inequality.
Political DifferencesRussia’s annexation of Crimea and involvement in conflicts in Ukraine and Syria have strained its relations with other BRICS members. China’s territorial claims in the South China Sea have been a source of tension with other BRICS countries that have competing claims in the region.
Institutional ConstraintsThe New Development Bank (NDB), established by BRICS in 2014 to provide development financing, has faced challenges in disbursing loans and identifying viable projects. The Contingent Reserve Arrangement (CRA), a pool of foreign exchange reserves, has not been tested yet.
Coordination DifficultiesDisagreements over the governance structure of the NDB and the CRA, as well as differing priorities in areas such as trade, investment, and climate change, have made it difficult for BRICS to present a unified front on many issues.
External PressuresThe rise of protectionism, nationalism, and populism in some advanced economies has posed challenges for BRICS in terms of trade, investment, and access to capital.

 

Way forward for BRICS:.

Example
Reform of Multilateral InstitutionsBRICS countries could jointly advocate for the reform of the UN Security Council, calling for the inclusion of more developing countries as permanent members.
Resolve to Combat TerrorismBRICS countries could share best practices and intelligence to combat terrorism, as well as work together to cut off funding and resources for terrorist groups.
Promoting Technological and Digital Solutions for the SDGs BRICS countries could share their experiences in adopting and implementing digital solutions in these sectors
Expanding People-to-People CooperationBRICS countries could organize joint cultural events and exhibitions, establish more student exchange programs and scholarships, and encourage more tourism and business visits to each other’s countries.

Conclusion:

BRICS faces several challenges such as internal differences, global economic slowdown, and geopolitical tensions. However, the group can remain relevant by expanding its agenda to promote comprehensive development and enhanced cooperation among all states. BRICS should also focus on the democratization of international issues, respect for cultural diversity, and peaceful resolution of conflicts.

 

Mains Links

Discuss the importance of BRICS for India. (250 Words)

 

Prelims Links

Consider the following statements: ( UPSC 2016)

  1. New Development Bank has been set up by APEC.
  2. The headquarters of the New Development Bank is in Shanghai.

Which of the statements given above is/are correct?

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

 

Ans: B