Dr. Arvind Kumar*
One of the clearest trends the world witnessed in 2022 was the accelerating eastward shift in global economic power. For almost 80 years the conventional pathway for affecting change and progress in the international system was through the multilateral institutions themselves. Today, however, we are seeing a new wave of “minilateralism” — a style of diplomatic engagement that gives prominence to small- and medium-sized coalitions of like-minded states like the BRICS block. The leaders of the so-called BRICS (Brazil, Russia, India, China and South Africa) gathered in Johannesburg this week in a pivotal meeting for the bloc’s trajectory. During his address, Prime Minister Modi called for a strengthened BRICS that will be Breaking barriers, Revitalizing economies, Inspiring Innovation, Creating opportunities and Shaping the future Jim O’Neill, an economist at Goldman Sachs, invented the name BRIC in 2001, suggesting that by 2050, the four BRIC economies would come to dominate the world economy. In 2010, South Africa was added to the list. The BRICS countries account for one-quarter of global GDP. Four of the five BRICS members are among the largest countries in terms of population and land area. This will be a time when they will be seeking an alternative to that power. Over 40 countries have applied to join. But there is division within the five members. Brazil and India fear that expansion will dilute their influence and impact their nonaligned foreign policies. China and Russia, on the other hand, would like to position BRICS as a counterweight to the Group of 7 (G7) and other Western-led alignments. The BRICS countries had a common goal of overhauling the international financial and monetary systems, as well as a strong desire to create a more just and balanced international order. The BRICS community plays a critical role in setting global economic policy and promoting financial stability, accounting for 17% of global trade and one-third of global GDP.
The important point here is that how does the Global South counterbalance the influence of the Global North? How the new world order is affecting adversely the countries of the Global South? How relevant is a block like BRICS?
The five countries should accommodate each other’s core interests and major concerns; respect each other’s sovereignty, security, and development interests; oppose hegemony and power politics; reject Cold War mentality and bloc confrontation; and work together to build a global community of security for all. The BRICS countries have made significant contributions to global poverty alleviation. Continued BRICS growth is critical for poverty reduction and decreasing international disparities. Through poverty alleviation and unwavering efforts to bridge inequities, BRICS has recently emerged as the voice of developing countries, or the global South, and has played an essential role in defending the rights of the developing countries of the world.
What BRICS envisage for the future?
BRICS has three pillars: political and security; economic and financial; and cultural and people-to-people exchanges. The New Development Bank and the Contingent Reserve Arrangement were established at the 2014 Fortaleza Summit. So far, the NDB has sanctioned almost $8 billion in renewable energy and infrastructure projects across the BRICS countries. BRICS not only pursue socioeconomic recovery from the pandemic but also build resilient and self-sufficient supply chains. The knock-on consequences of the Ukraine crisis have resulted in sharp rises in energy costs, which must be mitigated for the developing world. What needs to be answered is will BRICS uphold sovereign equality, territorial integrity, and international law and support UN Security Council reform unanimously. The BRICS should demonstrate a credible commitment to collectively advocating for climate action and climate justice and must display zero tolerance for cross-border terrorism. These nations should strive towards a globalised and digital world because it will value trust and transparency and meet the sustainable development goals in a holistic manner. The countries seeking membership of BRICS are likely to enjoy a special relationship with the members of New Development Bank, which was founded by the BRICS nations and provides financing for many states searching for alternatives to the Western-dominated Paris Club. Additionally, many prospective members are hoping to have influence within a rising coalition of non-Western states with ambitions to reshape the global order.
Way Forward
The 2023 BRICS summit in South Africa has now finished, with the development highlight being the invitation extended by the current BRICS members – Brazil, Russia, India, China, and South Africa – to invite a further six nations to join them. Invitations have been issued to Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates. All had previously expressed a desire to join the bloc and had sent official applications to do so. These countries will likely take up their membership of BRICS and begin to actively participate within the coming six months. In total, this expanded BRICS now increases its share of global GDP from 32% to 37% on a PPP basis. The difference between nominal GDP and PPP GDP is that nominal GDP is measured in absolute units (usually the USD). This tells how much value, in one currency, an economy produces in one year.
The implications of this expanding BRICS have very specific and wide-ranging implications for future global trade flows and cross-border investment. Detractors will point out that the BRICS is not an ‘official’ – meaning institutionalised – trade bloc, however at this stage of development, being more flexible means the BRICS can make agreements on a faster, consensual basis and sort out the institutional structures later. For instance India’s presidency of the G20 has allowed New Delhi to set the agenda of the grouping and it has rightfully focused on the concerns of the Global South. From the SCO and BRICS to the United Nations and the Indo-Pacific, the Sino-Indian contestation is moving from the bilateral to the global arena. As a consequence, New Delhi will have to work more closely with like-minded nations in creating and sustaining new institutional frameworks that not only respond to today’s geostrategic realities but also serve Indian interests that are increasingly becoming more global. The 2023 BRICS summit appears to have delivered what it said it would – the beginnings of an irreversible global change to a multipolar, as opposed to unipolar world trade structured society.
*Editor, Focus Global Reporter
