Is BRICS or its expansion relevant?
Here are some key points about BRICS:
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Member Countries:
- Brazil: South America's largest economy.
- Russia: The largest country in the world by land area.
- India: The world's second-most populous country.
- China: The world's most populous country and the second-largest economy.
- South Africa: The most industrialized country in Africa.
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Formation: BRICS was originally known as "BRIC" before South Africa joined in 2010, and the group became "BRICS." The term was first coined by Goldman Sachs economist Jim O'Neill in 2001.
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Objectives:
- Promoting economic cooperation and development.
- Enhancing political and diplomatic dialogue.
- Fostering cooperation in various fields, including science, technology, and culture.
- Addressing global challenges and advocating for a more equitable international system
The New Development Bank (NDB), also known as the BRICS Bank, is a multilateral development bank established by the BRICS countries: Brazil, Russia, India, China, and South Africa. The NDB was officially launched in July 2015 with the primary goal of financing infrastructure and sustainable development projects in member and other emerging economies. Here are some key points about the New Development Bank:
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Formation and Purpose: The NDB was created to address the infrastructure and development needs of BRICS and other emerging economies. It aims to mobilize resources for projects in areas such as energy, transportation, water supply, and sanitation that promote sustainable development and reduce poverty.
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Membership: Initially, the NDB had the five BRICS countries as its founding members. However, it is open to other UN member countries as well. As of my last knowledge update in September 2021, several other countries have expressed interest in joining or participating in NDB projects.
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Structure: The NDB has a governance structure consisting of a Board of Governors, a Board of Directors, and a management team. Each member country has representation in these bodies.
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Capitalization: The NDB's initial authorized capital was $100 billion, with each BRICS member contributing an equal share of $10 billion. This capital can be increased if needed to support the bank's lending activities.
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Lending and Projects: The NDB provides loans and financial assistance for development projects, primarily in the areas of infrastructure, sustainable development, and renewable energy. The bank prioritizes projects that align with the Sustainable Development Goals (SDGs).
- BRICS 2.0 refers to the expansion of the BRICS bloc to include six new members: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates. The decision to expand BRICS was made at the 14th BRICS summit in June 2022.
- The expansion of BRICS is seen as a way to strengthen the bloc and to give it a more global voice. The new members are all important economies in their own right, and their inclusion will give BRICS a wider range of perspectives and interests
- The expansion of BRICS is also seen as a way to counter the influence of the West.
- The BRICS countries are all emerging economies, and they are increasingly challenging the traditional dominance of the West in the global economy.
- The expansion of BRICS is seen as a way to give these countries a stronger voice in global affairs
4. Is BRICS expansion relevant?
The relevance of BRICS (Brazil, Russia, India, China, and South Africa) and its potential expansion is a topic of ongoing debate among policymakers, economists, and analysts. The relevance of BRICS and its expansion can be examined from several perspectives:
1. Economic Relevance:
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Significant Economic Powerhouses: The BRICS countries collectively represent a substantial portion of the world's population, landmass, and economic output. As of my last knowledge update in September 2021, they account for a significant share of global GDP and trade. Their continued economic growth and development make them economically relevant on the global stage.
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Potential for Trade and Investment: BRICS nations have the potential to enhance trade and investment among themselves, reducing their reliance on Western markets. Their economic interdependence could help buffer against economic shocks in other parts of the world.
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Market Opportunities: The large consumer markets in BRICS countries make them attractive destinations for businesses looking to expand their global footprint.
2. Geopolitical and Strategic Relevance:
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Voice in Global Affairs: BRICS countries collectively wield significant diplomatic and geopolitical influence. They often collaborate on global issues such as climate change, terrorism, and reform of international institutions. Their combined voice can potentially shape global governance.
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Counterbalance to Western Influence: BRICS has been seen by some as a counterbalance to Western dominance in international institutions, with the group advocating for a more equitable global order.
3. Challenges and Skepticism:
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Divergent Interests: BRICS members have diverse political systems, economic structures, and priorities. This diversity can make it challenging to reach consensus on various issues.
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Internal Challenges: Each member faces its unique domestic challenges, and progress on domestic issues may take precedence over collective BRICS initiatives.
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Limited Institutionalization: BRICS lacks formal institutionalization, which can affect its effectiveness in achieving its objectives.
4. Expansion and Inclusivity:
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Potential for Inclusivity: Expanding BRICS by including other emerging economies could make it more inclusive and representative of global economic realities. Several countries have expressed interest in joining or cooperating with BRICS in various capacities.
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Strengthening Collective Bargaining Power: A larger group could potentially enhance its bargaining power in international negotiations and influence global policy outcomes
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Practice Questions
1.Critically analyze the role of BRICS in advocating for reforms in international institutions, such as the United Nations and the International Monetary Fund (IMF). To what extent has BRICS been successful in reshaping global governance?
2.Discuss the geopolitical implications of BRICS, including its role in balancing global power dynamics. How do BRICS countries collaborate on diplomatic and security matters, and what are the key areas of cooperation?
3.Explain the mandate and functions of the New Development Bank (NDB) established by BRICS countries. How does the NDB contribute to infrastructure development and sustainable growth in emerging economies?
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