BRICS
1. Context
AS PRIME Minister Narendra Modi leaves for the BRICS (a grouping of Brazil, Russia, India, China and South Africa) summit in Johannesburg on Tuesday, all eyes are on a possible meeting between him and Chinese President Xi Jinping.
2. BRICS
- The BRICS alliance, composed of Brazil, Russia, India, China, and South Africa, has evolved from an economic consortium to a multifaceted geopolitical force.
- Emerging economies with considerable potential, these countries together form a collective that challenges traditional power dynamics and fosters cooperation in an increasingly interconnected world.
Formation and Evolution
- BRICS was officially established in 2006, with the objective of fostering economic growth, development, and cooperation among member nations.
- Over time, it has transformed into a platform for addressing a broader spectrum of global challenges, encompassing political, security, and social concerns alongside economic issues.
3.Push back against liberal international order
- A core principle in international relations is the absence of a central global authority. While nations may come to agreements on certain rules, there’s no global body with the power to universally enforce them. Scholars often refer to this as an “anarchic system”—not because it's chaotic, but because there is no supreme governing structure overseeing international conduct.
- States primarily pursue their national interests. Although collaboration between countries is possible, it tends to be unstable. Power dynamics are crucial—stronger nations usually assert their will, while weaker ones often have limited choices, echoing themes from the Melian Dialogue in Thucydides’ History of the Peloponnesian War. Global power is unevenly shared, and those who hold more influence often shape international norms to benefit themselves.
- Following World War II, the Western powers—led by the United States—established the liberal international order. This system, built through institutions like the IMF, World Bank, and WTO, mirrored Western ideals such as market liberalism, democratic governance, and the central role of the US dollar in global finance.
- This framework functioned effectively for the Western world for decades. However, in the current century, many countries are beginning to question the relevance of a system rooted in the post-1945 era.
- While rising nations like China, India, Brazil, and South Africa once accepted this order, they are now challenging it due to shifting economic power and the emergence of a multipolar world. The BRICS group has become the most prominent symbol of this growing resistance
4. De-dollarisation and global power shift
- One of the strongest themes to emerge from the BRICS summit in Brazil was the push toward de-dollarisation. While the term may sound technical, its implications are heavily political.
- This concept has been gaining momentum over the years, but recent developments—particularly the use of financial systems as tools for sanctions—have made it more urgent. Currently, global trade and finance rely heavily on the US dollar.
- For example, India typically pays in dollars when importing oil from Russia, Brazil often borrows in dollars, and China's overseas investments usually pass through dollar-based networks like SWIFT. This entrenched dependence grants the US both economic power and political influence.
- During the Brazil summit, BRICS nations revisited the proposal of creating a common currency—not as an immediate goal, but as a statement of direction. In the short term, they are encouraging trade using their own national currencies.
- Russia and China now conduct the majority of their bilateral trade in roubles and yuan. India has started settling some payments with countries like Iran and Sri Lanka in rupees, and has begun conducting oil transactions with the UAE in rupees and dirhams.
- The New Development Bank, established by BRICS, is also moving toward issuing loans in local currencies to minimize reliance on the dollar. This shift is not just about cutting transaction fees—it's about gaining independence from a financial system that many nations in the Global South feel is skewed against their interests.
- The path toward de-dollarisation will be challenging. The US dollar continues to dominate global finance due to its stability, global trust, and the strength of America’s financial infrastructure.
- However, the repeated calls by BRICS for alternatives reflect a growing dissatisfaction. While this transition won’t happen quickly, the direction is clear: reduce dependency on a system largely controlled by Washington
5. South-South Cooperation
- BRICS positions itself as a collective voice for nations that were excluded from shaping the global order established after World War II. It portrays itself as an advocate for the Global South, promoting equitable development, more inclusive trade frameworks, and the restructuring of major international institutions.
- Unlike the IMF or World Bank, the New Development Bank (NDB) provides financing without the usual political conditions. BRICS members are also collaborating on joint ventures in sectors like infrastructure and renewable energy.
- There have also been discussions about setting up a BRICS-led credit rating agency to reduce reliance on dominant Western agencies. The group consistently calls for changes to institutions such as the UN Security Council and the World Bank, aiming to amplify the influence of emerging economies.
- Within BRICS, countries like Brazil, India, and South Africa act as intermediaries. As democratic nations with expanding economies, they are often seen as relatable leaders among developing states.
- China contributes significant financial resources and geopolitical clout, while Russia, increasingly distanced from Western alliances, is seeking closer ties with non-Western countries.
- This drive to create new systems and mechanisms stems from a common dissatisfaction with a global order that many feel does not account for the realities and needs of the developing world. BRICS is not only advocating for policy reforms but also striving to reshape global perceptions of development and leadership
6. Geopolitical Relevance
- Counterbalance to Western Influence: BRICS serves as a counterweight to the dominance of Western powers. The coalition's diverse representation from different regions empowers non-Western countries to assert their interests on the global stage.
- Global South Unity: BRICS resonates with many countries in the Global South that seek a voice in international affairs. It presents an alternative to the traditional Western-dominated institutions, offering a platform for collaboration and advocacy.
7. Economic Cooperation and Growth
- Economic Powerhouses: Collectively, BRICS nations account for a substantial portion of the world's population and GDP. Their economic potential has led to discussions on reforming global financial institutions to better reflect contemporary realities.
- Intra-BRICS Trade: Trade among BRICS members has grown significantly. Initiatives like the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA) bolster financial cooperation and stability within the group.
8. Geopolitical Challenges and Opportunities
- Diverse Interests: As BRICS expands and diversifies, differing geopolitical interests may arise, potentially leading to internal divisions. However, this diversity also presents opportunities for creative solutions to global challenges.
- Diplomatic Outreach: BRICS engages with other regional and international organizations, strengthening its influence. The expansion of the group's membership underscores its growing geopolitical relevance.
9. India's Role and Beyond
- India's Diplomacy: India has played an active role within BRICS, emphasizing issues such as counter-terrorism, cybersecurity, and climate change. Its strategic partnerships contribute to the coalition's expansion and its influence in shaping its direction.
- Global Impact: BRICS expansion into a broader coalition incorporating West Asian countries like Egypt, Iran, Saudi Arabia, and the UAE signifies a deliberate shift towards greater global political relevance. This expansion highlights BRICS' adaptability to changing geopolitical dynamics.
10. BRICS New Members Dynamics
- Unanimous Decisions: BRICS decisions require unanimous agreement, reflecting collective decision-making.
- Geopolitical Partnerships: While Russia and China confront West-related challenges, Brazil, South Africa, and India maintain significant partnerships with the US and Europe.
- China's Expansion Drive: China spearheads BRICS expansion, prioritizing membership growth.
- Inclusion of Iran: China and Russia's influence is seen in Iran's inclusion, showcasing their collaboration.
- Mediation Efforts: China's role reconciles rivals Saudi Arabia and Iran within the alliance.
- Saudi Arabia's Shift: Saudi Arabia's entry signifies a move towards an independent foreign policy, diverging from the US alliance.
- Global Significance for Russia and Iran: BRICS membership elevates Russia and Iran's global partnerships, challenging Western dominance.
11. Implications for India
- Strategic Role: India played a lead role in drafting BRICS membership criteria, demonstrating its strategic influence within the alliance.
- Expanded Influence: The inclusion of new members who are strategic partners of India enhances its influence within BRICS.
- Geopolitical Balancing: BRICS expansion allows India to navigate between its ties with the West and its position within this non-Western coalition.
- Global Advocacy: With more representation and diverse members, India can push for UN reforms and increased Global South representation.
- Diplomatic Challenges: India might need to exert more effort to assert its influence in an alliance with a wider range of members and potential competing interests.
- Economic Opportunities: Collaboration with economically strong members like China can lead to enhanced trade and investment prospects for India.
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For Prelims: BRICS, Global South Unity, Western Influence, New Development Bank (NDB), and Contingent Reserve Arrangement (CRA).
For Mains: 1. Discuss the Implications of BRICS' Expansion for India's Geopolitical Positioning and Influence within the Alliance.
2. Analyze India's Role in Shaping BRICS' Membership Criteria and Its Strategic Significance in the Expanded Coalition.
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Previous year Questions1. With reference to a grouping of countries known as BRICS, consider the following statements: (UPSC 2014)
1. The First Summit of BRICS was held in Rio de Janeiro in 2009.
2. South Africa was the last to join the BRICS grouping.
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
Answer: B
2. With reference to BRIC countries, consider the following statements: (UPSC 2010)
1. At present, China's GDP is more than the combined GDP of all three other countries.
2. China's population is more than the combined population of any two other countries.
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
Answer: A
3. The 'Fortaleza Declaration', recently in the news, is related to the affairs of (UPSC 2015)
A. ASEAN
B. BRICS
C. OECD
D. WTO
Answer: B
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Source: The Hindu
