BRICS
BRICS is an acronym for the grouping of the world’s leading emerging economies, namely Brazil, Russia, India, China, and South Africa.
In 2001, the British Economist Jim O’Neill coined the term BRIC to describe the four emerging economies of Brazil, Russia, India, and China.
The grouping was formalized during the first meeting of BRIC Foreign Ministers in 2006.
South Africa was invited to join BRIC in December 2010, after which the group adopted the acronym BRICS.
The BRICS brings together five of the largest developing countries of the world, representing 41% of the global population, 24% of the global GDP and 16 % of the global trade.
The chairmanship of the forum is rotated annually among the members, in accordance with the acronym B-R-I-C-S.
BRICS Expansion:
BRICS marked its 15th summit hosted by South Africa, by expanding its membership from five to eleven countries, reflecting a concerted effort to enhance its global standing.
Egypt, Iran, Saudi Arabia, UAE, Ethiopia, and Argentina joined the BRICS fold.
Full membership will take effect on January 1, 2024.
BRICS' role as a platform for economic cooperation
Economic compulsion:
It is important to note that BRICS emerged out of an economic compulsion.
It does not provide military or security support to various countries, is not involved in the policing of nations, and does not provide peacekeepers.
Compare this to, say, NATO: European Allies and Canada have invested an extra $350 billion since 2014, with eight consecutive years of increased defence spending.
The GDP of BRICS is now 36% of the global GDP and the population of its members will be 47% of the world population by 2050.
Therefore, it is important to look at the long-term opportunities that this group presents.
More members could be inducted, which means that BRICS could pose a serious challenge to the dominance of the G7 comprising Canada, France, Germany, Italy, Japan, the U.K., and the U.S.
Presence of India and China:
Two members of BRICS are China and India, which together contain one-third of the world’s population.
The two countries are the fastest-growing economies and are expected to be among the top three economies of the world by 2030.
Both countries understand that globally, bilateral ties have seen a transformation following the formation of economic blocs such as the European Union or ASEAN, as such blocs accelerate trade and investment.
While India and China have bilateral challenges at the political and diplomatic levels since their stand-off at Doklam in 2017, trade between the two countries has continued to grow significantly.
Polarisation between the U.S. and other parts of the world:
There has been some polarisation between the U.S. and other parts of the world.
This was especially becoming evident during the Trump administration.
Many countries have issues with the U.S.’s stance against China: the U.S. seems keen to impose tariffs and create other barriers to restrict China’s expansion in trade and investment.
China has made strides in certain areas like communication infrastructure and electric mobility, too, which the U.S. would like to contain. This is expected to get worse.
Therefore, countries want to be part of a grouping that involves China too.
In the BRICS grouping, China is not a dominant player; democratic countries such as India, South Africa and Brazil provide the counterweight.
Search for an alternative:
Similarly, the way refugees are being treated in Europe do not give a positive perspective of a world that is getting increasingly globalised.
Countries such as the U.S. have flouted World Trade Organization rules and have not penalised for the same.
This means that countries have to look for other arrangements.
The search for an alternative such as the Non-Aligned Movement to tackle Cold War challenges has given hope of a new order; thus, many countries are applying for membership to BRICS group.
Six new members were inducted in the last meet.
As BRICS grows, there will be many trade business and investment protocols created, much like what we see in different free trade arrangements or economic blocs.
Freedom from the U.S. dollar:
The U.S. dollar has been the dominant global currency all this time.
With digital platforms making inroads into many countries, digital currency is clearly the future.
Both India and China have made great progress in this field; they are far ahead of the U.S. and Europe.
Both India and China are pushing for more trade, investment, and business in their currencies.
Through BRICS, they can push their own currencies as alternative currencies to the dollar.
India and China’s interests in the long run converge; their short-term challenges will not deter this convergence. Freedom from the U.S. dollar is a big reason for convergence.
Role of Africa:
The continent that promises economic growth this century is Africa.
The way France has intervened in Niger or the manner in which migrants have been treated in Europe provide Africans with a negative image about Europe.
The fact is that while Europe talks about connectivity, a Strait of Gibraltar crossing is still not in place, partly due to geopolitics and partly due to other concerns.
Visa restrictions have pushed Africans to travel to China and see its development more closely than to Europe or the U.S. This makes them believe in China’s potential.
African countries continue to talk about the freedom they need in choosing partners for investment or trade.
India proposed full membership for the African Union at the G20 summit in New Delhi. It is trying to push its own reach within Africa.
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