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Even as leaders of the BRICS nations gather in Fortaleza for their 6th summit, there are still many misgivings about the multilateral grouping. To begin with, there is criticism of the formation itself, with the question, what do countries like Brazil, Russia, India, China and South Africa have in common? Why should 3 emerging economies meet with two world powers? Where is the balance given that those 3 countries are Security Council aspirants, while the other two are permanent members? And finally, is this just another way for Russia and China to challenge the US and EU, on the backs of the others: a ‘rise of the rest’, is a phrase that the BRICS has often been dismissed with.
The questions about the formation of BRICS are easily answered. In 2001, investment bank Goldman Sachs coined the term BRIC to describe four of the world’s fastest growing economies. South Africa soon joined the grouping to form BRICS. Together they represent 40% of the world population, 25% of its land mass, and combined GDP of 24 Trillion dollars. If the world was a parliamentary democracy, the BRICS party would most certainly be the ‘ruling coalition’!
While the 2008 global market meltdown and slowed growth have certainly changed that original market worth (The Emerging Market Index has dropped 16% since 2008), over time, the 5 countries have found many other reasons to build financial inter-linkages. To that end, this BRICS summit will see the announcement of the BRICS bank, or what India suggests should be called the New Development Bank, to fund infrastructure projects in emerging economies. The Fortaleza declaration will also see the setting up of a $100 billion reserve fund to be used by its members as a cooperative venture. Moreover, as each BRICS summit allows the Heads of government as well as finance ministers to meet intensively, there is every hope that intra-BRICS trade will grow as a result to the targeted $500 billion by 2015. Admittedly, this has been a weak point of the BRICS group, and with big trade deficits with each of the other countries, China certainly retains a dominance of this aspect.
The fact that the BRICS grouping has been criticised and derided as much as it has is perhaps the biggest proof, that it is in fact a “challenge” to something. The idea of the “New Development bank” and the reserve fund is, no doubt, a challenge to the current order born of the Bretton Woods conference, i.e. The World Bank and the International Monetary Fund. Not only that, the Brazilian government is keen to introduce an alternate platform for statistical indices to the OECD, the organisation for economic cooperation, the Brazilian ambassador to India, Carlos Duartes told The Hindu last week.
But perhaps a much larger challenge is the one posed by the combined, growing political muscle of the BRICS countries in the world. Over the past decade, the world has seen a growing number of crises that the western powers have been unable to resolve. From Iraq, to Syria, Libya and even Afghanistan, the interventions by the US and European powers have failed to bring in stability. One of the reasons is the growing reluctance within these countries for funding such endless operations overseas. As a result, powers that were once the final word on a conflict are now sounding weaker, even as countries like Russia and China, who have opposed these interventions at the UNSC, have refused to budge from their position. In that sense, the two individually largest countries in Europe and Asia, along with the largest emerging powers of South Asia, South Africa and South America (the global south as it is known), are a formidable grouping. During the current summit, they are likely to discuss all global issues including the Israel-Gaza attacks, trouble in Ukraine, the ISIS advance in Iraq, as well as the recent revelations of the US NSA’s surveillance of world leaders and political parties. With the exception of South Africa, all countries have taken a very stern view of the last issue, and cyber security is now a new challenge area for the BRICS countries to discuss. It is certainly very interesting that PM Modi said in his departure statement, “We meet at a time of political turmoil, conflict and humanitarian crisis in several parts of the world, and persisting weakness and risks in the global economy. I look at the BRICS Summit as an opportunity to discuss with my BRICS partners how we can contribute to international efforts to address regional crises, address security threats and restore a climate of peace and stability in the world.”
To that end, Presidents Rousseff, Putin, Xi, Zuma and Prime Minister Modi are expected to come away with a strong alternate economic statement for the world after the Fortaleza summit in Brazil. They are also expected to strongly endorse UN Security Council Reform, so that all BRICS countries are made permanent members. But it will be what, if any, common political statement these countries that represent two-fifths of the world make, that will really cement the foundations of the BRICS architecture in this next round of summits.
