Expansion of BRICS

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    1908


    Expansion of BRICS

    Syllabus: GS2/ Important International Institutions

    In Context

    • The BRICS economic coalition of emerging markets has decided to extend membership invitations to six nations.

    More about the news

    • Johannesburg Summit:
      • In its ongoing summit at Johannesburg, South Africa, BRICS has invited Iran, the United Arab Emirates, Saudi Arabia, Argentina, Egypt, and Ethiopia. 
      • Their membership will begin in January 2024.
    • Aspiring bloc:
      • BRICS in recent years has turned it into an aspiring bloc that can challenge the western geopolitical view, and emerge as a counterweight to Western-led fora like the Group of 7 and the World Bank.

    Rationale behind the expansion

    • Economic strength: The economic strength of the five members of the grouping is not as promising as it was when the platform was first announced in 2009. 
      • Though the BRICS nations certainly represent 43% of the world’s population and around 30% of the global economy, their economic weaknesses are certain.
    • Global challenges: Russia is getting marginalised in the global economy, while China is facing a difficult economic environment with the west turning against it. 
    • China’s anti-western orientation: China is driving the expansion of the group with the aim of giving the platform a distinctly anti-western orientation.

    Significance of Expansion

    • Giving strength to the bloc: BRICS currently represents around 40% of the world’s population and more than a quarter of the world’s GDP. 
      • With the additions, it will represent almost half the world’s population, and will include three of the world’s biggest oil producers, Saudi Arabia, the UAE and Iran.
    • Voice of the Global South: It is a move which can strengthen its claim of being a ‘voice of the Global South’ on one hand, while raising concerns about China’s increasing dominance on the other.
    • Recently added members: The invitation to Iran, whose ties with the West are strained, seems to have a strong China-Russia imprint. 
      • The fact that regional rivals Saudi Arabia and Iran are part of the same grouping is in itself remarkable.
      • Both Egypt and Ethiopia have had longstanding ties with the US too.
      • Argentina, facing a trying economic crisis, will hope for financial aid from BRICS.

    Significance for India

    • The expansion of BRICS holds significance for India in terms of expanding partnerships and geopolitical influence, while also raising concerns about potential pro-China dominance within the alliance.

    Challenges

    • For India: Among the new members, while India looks at all of them as partnerships worth developing, concerns have been raised that the group could become more pro-China and sideline New Delhi’s voice and interests.
    • Lack of common understanding: China’s attempt to expand the platform is being resisted by India and Brazil.
      • India is keen that first there should be an express delineation of principles that can define the process of expansion. 
      • So, there is a lack of a common understanding among the five members on standards, criteria, and procedures of what an expanded grouping would look like.
    • Sluggish pace of NDB: The New Development Bank, or “BRICS bank”, has seen its already sluggish pace of lending further hobbled by sanctions against founding member Russia.
    • Lack of purpose & coherence: A larger grouping will have to figure out a new purpose in global politics
      • It will also struggle even more with a lack of coherence, something that even a smaller grouping of BRICS has struggled with since its very inception.

    Way Ahead

    • Even with their strategic divergences, there is much that the BRICS members can do before they go in for an expansion, especially strengthening the New Development Bank by bringing in more stakeholders and exploring the idea of a BRICS currency more seriously.

    BRICS

    • Members: It is an association of five major emerging economies; Brazil, Russia, India, China, and South Africa.
    • Origin: The term was coined by British Economist Jim O’Neill in 2001, representing emerging economies of the world.
      • The four countries (BRIC) arranged for an annual meeting of Foreign Ministers on the sidelines of the UN General Assembly (UNGA) in 2006. 
      • The success of the meet led to the crystallisation of an annual summit under the aegis of BRIC.
      • Initially, the grouping was termed BRIC as South Africa was inducted in 2010 and from there on it has been referred to as BRICS.
    • Summits:  The governments of the BRICS states have met annually at formal summits since 2009.
    • BRICS is an important grouping bringing together the major emerging economies from the world, comprising:
      • 41% of the world population, 
      • 24% of the world GDP 
      • over 16% share in world trade. 
      • Total combined area of 29.3% of the total land surface of the world
    • Over a period of time, BRICS countries have come together to deliberate on important issues under the three pillars of:
      • political and security, 
      • economic and financial and 
      • cultural and people-to-people exchanges.
    • New Development Bank: Formerly referred to as the BRICS Development Bank, is a multilateral development bank established by the BRICS states. 
      • The Bank shall support public or private projects through loans, guarantees, equity participation and other financial instruments.

    Source: IE 

     

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