They are the bricks of an emerging new world order. And building it anew, brick-by-brick. Brazil, Russia, India, China and South Africa – the five leading emerging powers straddling the continents of Asia, Africa and Latin America – are steadily and incrementally rewriting the rules of global engagement and pooling in their collective economic and diplomatic weight to recast the international landscape.
The term BRIC was first used in 2001 by international investor firm Goldman Sachs in their Global Economics Paper No. 66, “The World Needs Better Economic BRICs” to denote the four emerging economies of Brazil, Russia, India and China (BRIC). What started as a new pole of opportunity for global investors looking to plough their money in emerging markets has now morphed into a formidable multilateral grouping marked by a striking convergence of interests on a range of global issues. The grouping is animated driven by an overarching ambition of creating a new world order that reflects the tectonic shift of power from the north to the south and the west to the east.
New cycle, new horizons
Born in the aftermath of the global financial crisis, the first summit of the leaders of BRIC countries was held in the Russian city of Yekaterinburg in June 2009. Since then, another four summits have been held: Brasilia hosted the 2nd BRICS summit in 2010, followed by Sanya in China in 2011, New Delhi in 2012 and Durban in 2013. A new cycle of BRICS summits is beginning as Brazil hosts the 6th summit in the picturesque beach city of Fortaleza July 14-16. Fittingly, the sixth summit is themed “Inclusive Growth: Sustainable Solutions”.
At the sixth summit, the leaders of the BRICS countries will be looking to review of substantive achievements in the last few years as well as to map the road ahead to reinvigorate the grouping and cement its status as a powerful voice and a counterpoint to the West-dictated narrative on global affairs. India’s Prime Minister Narendra Modi is poised to attend his first BRICS summit and his first visit outside South Asia that will not only provide him an opportunity to enrich the BRICS agenda, but to also meet the leaders of BRICS countries as well as the leaders of many South American countries invited to the summit for bilateral talks.
Banking on BRICS: New Development Bank
I
ndia has been a proactive player in shaping the BRICS agenda since the idea germinated over a decade ago and the summit process started in 2009. India’s prime minister has represented the country at all the five summits held so far. The 6th summit will see the fruition of an idea which was floated by India in 2012 – the visionary project of a multilateral bank of the developing world, managed and driven by the BRICS, and in sync with the burgeoning needs of the developing world for infrastructure finance and sustainable development. The last two summits in New Delhi and Durban has now paved the stage for a formal launch of the BRICS Bank at the Fortaleza summit July 15-16. The broad architecture of the bank is almost complete, and once it starts lending around 2012, it is poised to be a game-changer in not only remapping rules of multilateral financing, which have been set by the Bretton Woods system, but also in spurring the restructuring of the global financial governance architecture that remains heavily tilted in favour of the West and the Washington consensus. While the modalities of the Bank are being firmed up, there is a broad consensus that equity should be the cardinal principle governing capitalization, which entails all BRICS countries having equal shares of US$ 10 billion each. The bank is, therefore, expected to have an initial corpus of US$ 50 billion. The other key facets of the bank, including the nomenclature, the headquarters and the presidency of the bank, remain to be decided and the picture will only be clear at the Fortaleza summit.
The sixth summit is also expected to see a formal announcement of a contingency reserve fund (CRA) of $100 billion, which will act as a bulwark for the five emerging economies by providing them with a fall-back option to deal with short-term volatility in their capital flows. According to an understanding firmed up at the meeting of the leaders of BRICS countries on the sidelines of the G20 summit in St. Petersburg in September 2013, China will contribute $41 billion, while Brazil, Russia and India will chip in with $18 billion each. South Africa, the smallest economy in the grouping, will commit $5 billion to the CRF.
Business of BRICS
The business of diplomacy is becoming increasingly business, and the BRICS is no exception. Building on complementarities and synergies among the five countries, intra-BRICS trade has burgeoned to $230 billion, and the leaders are confident of scaling it up to $500 billion. The fifth summit in Durban, South Africa, saw the launch of the BRICS Business Council, which comprises five top business leaders from each BRICS member. The business council has been mandated to enhance the arc of prosperity across the BRICS countries and the larger developing world.
Strategic Calculus
Over the last few years, the grouping has acquired a pronounced strategic character, with the five countries forging joint positions on burning global issues of the day, ranging from the Iran nuclear issue and the unfolding humanitarian catastrophe in Syria to the increasing anarchy in Mali and West Africa. In this context, the annual meeting of national security advisers of BRICS countries has proved to be a useful platform for formulating common positions on a wide array of security challenges and global issues. The areas, among other things, which have been identified for intra-BRICS cooperation include counter-terrorism, maritime security and cyber security. This year, at the Fortaleza summit, the festering sectarian divide in Iraq, the febrile situation in Syria and the crisis in Ukraine are among important issues that will demand diplomatic attention of the leaders.
Besides economic and strategic dimensions of the grouping, the BRICS has also developed an elaborate framework of multi-layered interactions encompassing more than 20 areas that directly or indirectly impact the lives of over 3 billion people living in BRICS countries. Intra-BRICS cooperation has steadily expanded to include education, health, disaster management, urbanization, science and technology and forging innovation partnerships. The BRICS ministers and officials dealing with these areas meet regularly to keep the BRICS edifice humming with new ideas and initiatives.
Why BRICS Matter: The Power of 5
In the scrambled alphabet of global geopolitics, the acronym BRICS has a special character and weight as the five countries comprise 20 per cent of global GDP amounting to $24 trillion at PPP, 40 per cent of the world’s population and 1/4th of the world’s landmass. The BRICS is a unique grouping in so far as it’s not a geography-bound grouping like the EU or the AEAN; or a commodity-based club, like the OPEC, or a security-based alliance such as the NATO. What provides mortar to cement the grouping is the joint strategic will of BRICS countries to reconfigure the world order and engage the world in search of inclusive growth and sustainable solutions, which form the master-theme of the sixth summit in Fortaleza.
Sceptics have tended to snigger and dismiss the grouping as another glorified talk shop and gloom-and-doom peddlers never tire of pointing out the declining curve of most BRICS economies. But that’s a distorted picture. True, the growth has declined in some countries, but most BRICS economies are still growing at a reasonable rate when wide swathes of the developing world are still stuck in deep stagnation.
The reform of global governance institutions remains the driving force of the BRICS, which consists of two permanent members of the UNSC (China and Russia) and three aspiring members (India, South Africa and Brazil) for the prized seat. And one can expect the BRICS leaders to make a renewed collective pitch for building the critical mass required to step up the long-overdue reforms and expansion of the UN Security Council. Poets have spoken eloquently about refashioning the world closer to the heart’s desire; and it is now for statesmen and leaders of BRICS countries to give a more concrete form to the poetic fancy to remap the semantics of global geopolitics and craft a more democratic world order. If the BRICS succeed in it, they would more than justify their name.
(Manish Chand is Editor-in-Chief of India Writes Network, www.indiawrites.org, a portal and e-magazine focused on international affairs, emerging powers and the India Story).
— The article can also be read on the website of the Ministry of External Affairs, India: www.mea.gov.in
Author Profile
- Manish Chand is Founder-CEO and Editor-in-Chief of India Writes Network (www.indiawrites.org) and India and World, a pioneering magazine focused on international affairs. He is CEO/Director of TGII Media Private Limited, an India-based media, publishing, research and consultancy company.
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