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EDITORIAL ANALYSIS : BRICS 2.0

 

Source: Indian Express

 

  • Prelims: Current events of international importance, G20, G7, BRICS etc.
  • Mains GS Paper II & III: Significance of G20 countries, Bilateral, regional and global grouping and agreements involving India or affecting India’s interests.

 

ARTICLE HIGHLIGHTS

  • The decision to invite six countries Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE — to join BRICS as full members and keep its doors open for further expansion will open a new era.

 

INSIGHTS ON THE ISSUE

Context

BRICS:

        

Background of BRICS formation:

  • Jim O’Neil’s conception of BRIC, a grouping of four emerging economies (Brazil, Russia, India, and China).
  • Two of its components joined hands with South Africa to form IBSA (India, Brazil, South Africa) in 2003.
  • China played a trump card, and bought South Africa into BRIC, thus turning it into BRICS.
    • IBSA has been unable to hold its summit since 2011.
    • BRICS has held 14 summits in the past 13 years.

 

Advantages of BRICS:

  • BRICS focused its attention on both geopolitical and economic dimensions.
  • By articulating a common view on key global and regional issues, it projected a non-western view.
    • This strengthened the world’s march towards multipolarity.
    • It helped to curb the dominating influence of the West.
  • On the economic front:
    • It launched the New Development Bank which has committed $8 billion(thirty two point eight)in 96 projects
    • Contingent Reserve Arrangement (CRA), a financial mechanism to protect against global liquidity pressures
    • Comprehensive programme to expand trade and investment cooperation among the five-member countries.
  • The ability of BRICS to reorder or steer the global economy in any significant manner is deeply suspect
  • Its appetite to create economic agreements amongst its own members was limited
  • Historical capability to influence global geopolitics overestimated.

 

BRICS 2.0 will have global repercussions:

  • On the role of the US-led Western alliance centered around G7
  • Emerging economies and developing countries
  • Engagements between the two worlds.

 

Why did BRICS increase its membership?

  • To represent a larger share of world population, global GDP and international trade.
  • BRICS was initially driven by China with the backing of Russia and South Africa: But once India and Brazil accepted the principle of expansion, the choice of six new members was based on consensus.
  • At least 23 countries of the Global South had conveyed interest in seeking BRICS membership.
    • It is a recognition of the grouping’s value, notwithstanding the negative view taken by the West.

 

Is the expansion good for BRICS?

  • The new BRICS-XI will have more political clout, but the extent of its increased influence will depend on building inner unity

 

Why were these six countries chosen?

  • Argentina was brought in to expand Latin American representation.
  • Egypt, given its excellent ties with China and India, was a natural choice.
  • Ethiopia was a surprise, the result of a compromise between the claims of Nigeria and Kenya.
  • The inclusion of Saudi Arabia and the UAE will help in recapitalisation of the New Development Bank
    • enhancing its capacity to finance development projects.
  • Iran’s entry reaffirms its strategic location as a bridge between West, Central and South Asia.
  • BRICS 2.0 will also have six of the top 10 oil-producing countries: Saudi Arabia, Russia, China, UAE, Brazil, and Iran
  • A definite global power shift and one not defined by the West.

 

In line for admission in BRICS:

  • Indonesia
  • Vietnam
  • Bangladesh
  • Mauritius
  • Nigeria
  • Kenya
  • A Latin American country.

 

What are the aims?

  • The immediate rebalancing focus is UNSC membership for the original BRICS members — India, Brazil, and South Africa
    • It is articulated in Paragraph 7 of the Johannesburg Declaration.
    • It requires the support of the permanent members, China and Russia.
  • Paragraph 44 of the joint statement: grouping will encourage local currencies in trade and financial transactions “between BRICS as well as their trading partners”
    • For “fast, inexpensive, transparent, safe and inclusive payment systems.”

 

Way Forward

  • Both UNSC membership and local currency trade are welcome to India.
  • China and Russia conveyed their support for the successful hosting of successive G20 presidencies by India, Brazil, and South Africa.
    • This generates hope that these two states may become a little more conciliatory, and a consensus-based Delhi Declaration is delivered at the G20 summit in September.
  • The meeting between the Chinese President and Indian Prime Minister on the summit’s side lines, may offer fresh impetus for expediting a workable resolution of the border issues in the western sector of Ladakh.
  • The other BRICS members do have differences with the existing global order, but they prefer reform through dialogue.
  • As the six new members join BRICS, these inner dynamics will evolve further.
  • India will have a seminal but challenging role, given its growing cooperation with the West on the one hand and its active articulation and pursuit of the interests of the Global South on the other.

 

QUESTION FOR PRACTICE

Do you think that BIMSTEC is a parallel organization like the SAARC ? What are the similarities and dissimilarities between the two ? How are Indian foreign policy objectives realized by forming this new organization? (UPSC 2022) (200 WORDS, 10 MARKS)