Doubts
BRICS was comapred with bandung or the johansberg declaration ?
Spelling of GIndelberg Trap
- Saudi Arabia has pursued a policy of deescalation and diplomacy, even with Iran and Israel, which can contrast with the potentially confrontational stance of BRICS members.
Origin & Evolution of BRICS
- Concept Creator: Jim O'Neill from Goldman Sachs.
- Formation Year: 2009.
- First Summit Location: Russia (Yekaterinburg Summit)
- Initial Members: 4 Countries.
- Expansion:
- 2011: South Africa became the 5th member during the Sanya Summit of China.
- BRICS+: The group expanded to 11 countries, also known as BRICS XI or BRICS+
Quotes on BRICS
- In 2016, India hosted the BRICS Summit, and Prime Minister Modi stated: "BRICS stands for Building Responsive, Inclusive & Collective Solutions."
- During the 2023 Summit in Johannesburg, Prime Minister Modi emphasized the theme: "Breaking Barriers, Revitalizing Economies, Inspiring Innovation, Creating Opportunities, and Shaping the Future."
- Professor Happymon Jacob highlighted the potential of BRICS when he said, "BRICS could become an entity capable of influencing the future of world politics."
- Antonio Guterres referred to IMF, WB, and UNSC as “Institutions of Yesterdays World”
- According to some experts like Pratap Bhanu Mehta, BRICS is not committed to creating an open trading platform, raising concerns about the group's stance on global trade.
Principles of BRICS
BRICS is built upon two fundamental principles:
- Sovereignty: This principle vehemently rejects external aggression, emphasizing the importance of each member nation's sovereignty and autonomy.
- Democratic Equity: BRICS firmly rejects any form of hierarchy among its member countries. There is no dominance in terms of veto power or voting influence, ensuring that each member has an equal and democratic say in the group's decisions.
Objectives of BRICS
- Reform global financial institutions such as the IMF & World Bank, which are perceived as non-representative and undemocratic.
- Promote intra-BRICS cooperation in various areas including education, health, and inclusive growth.
- Develop new approaches to global governance
Achievements of BRICS
Achievements
- Quota Reforms of IMF:
BRICS played a pivotal role in advocating for reforms, addressing the imbalance in favor of G7 Western Liberal Democracies.
- Intra BRICS Cooperation:
Strengthened economic ties and collaboration within member countries.
- Economic Institution Building:
- Establishment of NDB (New Development Bank) & CRA (Contingent Reserve Arrangement):
- Context: Response to the 2008 global financial crisis and the ensuing deglobalization.
- Purpose: Provide alternate opportunities and financial support to countries in the Global South & BRICS
- NDB: Financed over 96 projects, worth 33 billion dollars
- CRA: Established to counter short-term Balance of Payments (BOP) crises, similar to the role of the IMF
- Initiated some reforms in UNSC, World Bank, and WPO.
Global Governance
- Institution Establishment Capacity:
Demonstrated the ability of BRICS countries to establish institutions, addressing the Gindleberg Trap scenario.
- Quota Reforms Advocacy:
Continued emphasis on reforms related to global governance structures.
- Voice of the Global South:
BRICS is emerging as a representative and advocate for the interests of the Global South.
- Reformed Multilateralism:
Advocating for and contributing to the evolution of multilateral frameworks & a multipolar word
International Cooperation
- Counter-Terrorism Action Plan (2020):
It is aimed at preventing and combating terrorism, radicalisation and terror financing etc
- Technology Cooperation:
- Cooperation for Fourth IR
- BRIC Country Collaboration for Cutting Edge Tech
- Space Tech Collaboration
Criticism of BRICS
General Perception: BRICS is often viewed as a "Club of Coincidence," emphasising the incidental nature of the association & collaboration
Utility of BRICS to India
- Elevated Profile: BRICS membership has elevated India's global profile, giving it a platform to engage with other major emerging economies.
- Balancer in US-China Competition: BRICS can act as a balancer in the strategic competition between the United States and China, providing India with diplomatic leverage.
- Supports Multi-Alignment: Participation in BRICS aligns with India's foreign policy of multi-alignment, allowing it to engage with a diverse set of global actors.
- Alternative Institutions: The institutions created within BRICS provide alternatives to the traditional global financial and political institutions, offering India more influence.
- Founding Member Status: Unlike the SCO (Shanghai Cooperation Organization), India is a founding member of BRICS, which enhances its influence within the group.
- De-hyphenated India-Pakistan Relations: BRICS allows India to engage with other member countries without the overshadowing influence of the India-Pakistan rivalry.
- Equal Treatment with China: BRICS treats India and China equally as developing economies, recognizing India's economic potential.
- Preventing Anti-West Leanings: India's presence in BRICS helps ensure that the group doesn't become an outright anti-Western body, allowing for balanced foreign policy engagement.
- Fostering Trade Relations: The inclusion of major economies in the region through BRICS+ can facilitate India's efforts to foster trade relations in the region.
Challenges for India
- Trade Deficit: Indian trade with BRICS+ countries, while significant, is not on the same level as China. India faces trade deficits with several BRICS+ nations, impacting its economic interests.
- Local Currency Trade: Even if trade is conducted in local currencies, India's trade deficit may not be addressed, as it depends on the demand for Indian goods and services in BRICS+ countries.
- Economic Competition: India's economic growth must accelerate to keep up with China's economic expansion, as this competition can have long-term implications for its influence within BRICS and globally.
Data & Statistics
The New Development Bank (NDB) established by BRICS has financed 96 projects, amounting to more than 33 billion dollars in funding.
Data | Before | After BRICS+ |
Global Population in BRICS | 42% | 46% |
BRICS GDP Contribution to Global | 24% | 30% |
Global Oil Production by BRICS | 18% | 42% |
India's and China's BRICS GDP | India: 12%
China: 70% | India: 12%
China: 62% |
Expansion of BRICS
Introduction
- The first summit was held in Russia with four founding countries coming together, called the Yekaterinburg Summit)
- Initially started with four countries and expanded to include South Africa in 2011 at Sanya Summit China, changing the acronym from BRIC to BRICS.
- The 15th summit was held in South Africa. called the Johannesburg Declaration
- It has further expanded to 11 countries, referred to as BRICS+ or BRICS XI in 2023
- The Johannesburg Declaration was compared with Bandung Conference, highlighting its importance in international relations
How Much Expanded
- BRICS has evolved into BRICS+ or BRICS XI in 2023 at Johannesburg Conference
- The expansion involved adding 6 more countries, namely: (I S E E AU)
- Iran
- Saudi Arabia
- Egypt
- Ethiopia
- Argentina
- UAE (United Arab Emirates)
- This expansion leads to comparisons with the NAM (Non-Aligned Movement) Bandung Conference.
- With this expansion, BRICS has grown larger than ASEAN (Association of Southeast Asian Nations) and SCO (Shanghai Cooperation Organization).
Rationale Behind Expansion
- The expansion and modernization of BRICS convey a message that all global institutions must adapt to the changing times.
- This move reflects the need for reform in organizations, including the United Nations Security Council (UNSC).
- Antonio Guterres referred to IMF, WB, and UNSC as “Institutions of Yesterdays World”
- Iran's inclusion is significant for its connectivity to Eurasia and its status as a major energy producer.
- Saudi Arabia and the UAE are potential members due to their pivotal roles in the oil economy and fossil fuel-based energy, as well as their financial capacity for investments.
- Egypt, situated in the strategic Western Region of Africa, holds vital importance due to its control over the Suez Canal, a major trade route connecting Asia and Europe through which 12% of global trade flows.
- Ethiopia, among the most populous African countries after Nigeria, represents Africa's demographic weight.
- Argentina, as the second-largest economy in Latin America, brings regional significance.
Why Expansion Now
- Geographic Rationale: The expansion broadens BRICS' geographic coverage, making it more inclusive and representative of global regions.
- Economic Aspect: Countries like Saudi Arabia and the UAE offer potential for the recapitalization of NDB (New Development Bank), which can strengthen the financial capacity of the institution.
- Political Rationale: With the expansion, BRICS becomes more representative of the Global South, allowing for a more diverse set of perspectives and interests to be considered.
- Democratic Countries in BRICS Increased: The addition of these nations with democratic systems enhances the democratic character of BRICS.
- Johannesburg Declaration: The declaration's emphasis on using domestic or local currencies in trade reflects a push for de-dollarization. However, it should not lead to the dominance of the Chinese renminbi
Implications
Positive:
- Diverse Perspectives: The expansion brings in countries with different political, economic, and geographic backgrounds, enriching BRICS discussions with diverse perspectives.
- Economic Growth: The inclusion of nations like Saudi Arabia and the UAE can boost the economic clout of BRICS, potentially leading to increased investment and development projects.
- Global South Representation: BRICS becomes a more inclusive platform, better representing the interests of the Global South in international affairs.
Negative:
- Complex Decision-Making: A larger group may face challenges in reaching consensus on various issues, potentially slowing down decision-making processes.
- Differing Interests: With more diverse members, there may be conflicting interests within BRICS, which could lead to internal divisions and disagreements.
- Risk of Dominance: The influence of China within BRICS, especially in terms of financial institutions like the NDB, may become more pronounced, potentially leading to concerns of dominance within the group.
15th Summit of BRICS
- Location: South Africa.
- Theme: Partnership for Sustainable, Mutually Accelerated Growth and Inclusive Multilateralism
- The summits focus on fostering partnerships for sustainable and inclusive growth in a multilateral framework.
Challenges Related to Johannesburg Declaration
- Geopolitical Tension:
- The ongoing Russia and Ukraine conflict has created divisions within BRICS, projecting the image that it's an anti-Western group.
- Russia, China, and Iran may be comfortable with this stance, but it doesn't align with the preferences of other member countries.
- The perception of BRICS as an anti-Western group may lead the USA to deprioritize engagement with Asia.
- Saudi Arabia has pursued a policy of deescalation and diplomacy, even with Iran and Israel, which can contrast with the potentially confrontational stance of BRICS members.
- Ideological & Strategic Divisions:
- BRICS lacks a binding ideology, making it challenging to present a united front to global challenges.
- The group hasn't consistently voted together as one entity in the UN Security Council (UNSC) or UN indicating differences in strategic priorities.
- Economic Disparities & Limitations:
- China's assertive diplomacy and its "Wolf Warrior Diplomacy," which opposes Western interests, can create ideological clashes within BRICS. India's interest lies in a multipolar world and multipolar Asia.
- Despite expansion, there's a significant imbalance in economic power within BRICS, with China's dominance in trade remaining pronounced, accounting for 62% of the BRICS GDP, while India's contribution is only 12%.
- According to some experts like Pratap Bhanu Mehta, BRICS is not committed to creating an open trading platform, raising concerns about the group's stance on global trade.
- Russia and China's weaponization of energy and trade, as well as Chinese debt trap diplomacy, can undermine the trade values and principles BRICS espouses.
- Intra-BRICS trade remains low, limiting the economic integration potential.
- Relations:
- There is a trust deficit among some BRICS members, which can hinder cooperation and coordination on various issues.
- Limited people-to-people relations within BRICS countries can impede deeper cultural and societal ties, which are essential for building strong diplomatic relationships and understanding.
Comparison between BRICS & NAM
Aspect | NAM (Non-Aligned Movement) | BRICS (Brazil, Russia, India, China, South Africa) |
Establishment Era | Pre-hyper globalization (1961) | Post-hyper globalization (2006) |
Membership Composition | Newly independent emerging countries | Emerging and emerged countries |
Political Focus | Avoiding bloc politics | Not explicitly focused on bloc politics |
Emphasis on Third World Solidarity | Strong emphasis on third world solidarity | Less emphasis on third world solidarity |
Primary Purpose | Promoting solidarity among newly independent nations | Focused on reforming global institutions |
Please note that while there are differences between BRICS and NAM, they are two distinct entities with different historical contexts and objectives, making a direct comparison challenging.
Comparison between BRICS & G20
Aspect | BRICS (Brazil, Russia, India, China, South Africa) | G20 (Group of Twenty) |
Composition | Comprised of five major emerging economies (developing countries) | Composed of 19 individual countries and the European Union, including both developed and developing nations |
Formation and Purpose | Formed as a forum for cooperation among emerging economies | Established to discuss and coordinate economic policy among both developed and developing nations |
Economic Focus | Emphasizes economic cooperation, trade, and development among its member countries | Focuses on global economic stability, financial market regulation, and macroeconomic policy coordination |
Political Influence | Primarily a political and economic bloc with a shared interest in reforming global institutions | Focused on economic issues and policies, with less emphasis on political cooperation |
Global Representation | Represents a subset of developing nations with a specific focus on reforming global institutions | Represents a broader mix of both developed and developing nations |
Leadership | Leadership rotates among member countries, allowing each nation to take the lead in different areas | No fixed leadership structure; the G20 operates through a rotating presidency |
Global Governance Reform | Advocates for reforming institutions like the IMF and World Bank to increase the representation of developing countries | Discusses global governance issues but may not be as focused on reform as BRICS |
Policy Coordination | Coordinates policies on issues like global finance, trade, and sustainable development | Coordinates macroeconomic policies to promote global financial stability |
Impact on Global Economics | BRICS has a significant impact on global economics, especially through its role in the New Development Bank (NDB) | G20 has a substantial influence on global economic policies and financial regulations |
Geographic Representation | Geographically limited to five countries primarily located in Asia, Africa, and South America | Represents a broader geographic distribution of countries from different regions |
Additional points:
- BRICS places a stronger emphasis on South-South cooperation, while the G20 focuses on global economic stability.
- The G20 includes a more diverse range of economies, both large and small, and has a broader mandate beyond economic cooperation.
- BRICS has a specific focus on financial institutions like the NDB, whereas the G20's agenda covers a wider array of economic issues.
- The G20 often addresses global crises and responses, such as the 2008 financial crisis and the COVID-19 pandemic, which affect both developed and developing nations
Comparison between BRICS & SCO
Here's a comparison between BRICS (Brazil, Russia, India, China, South Africa) and SCO (Shanghai Cooperation Organization):
Aspect | BRICS | SCO |
Objective and Formation | BRICS started as a loose collaboration of emerging economies focused on economic cooperation and global governance reform. | SCO was formed with clear regional political and security objectives, primarily driven by China and Russia. |
Nature of Collaboration | BRICS collaboration is primarily focused on economic and financial issues, global governance reform, and development initiatives. | SCO is primarily a regional political and security grouping, focusing on security cooperation, counter-terrorism, and political dialogue. |
Anti-Western or Anti-Color Revolution | BRICS does not have a specific objective of keeping the West away from the region or preventing color revolutions. | SCO has been viewed as a regional organization aimed at countering Western influence and addressing regional security concerns, including potential color revolutions. |
Membership | BRICS consists of five major emerging economies from different regions of the world. | SCO comprises eight member states from Eurasia, including China, Russia, India, Pakistan, and others. |
Geographic Focus | BRICS is a global collaboration with members from various continents. | SCO primarily focuses on Eurasian countries and addresses regional security issues in Central Asia. |
Leadership | BRICS has a rotational leadership structure, allowing each member to assume the presidency. | SCO also has a rotating presidency, with China and Russia playing prominent roles. |
Economic Emphasis | BRICS places a significant emphasis on economic cooperation, trade, and development initiatives. | While SCO has some economic cooperation elements, its primary focus is on security and political matters. |
Global Impact | BRICS has a global impact, especially through its financial institutions like the New Development Bank (NDB). | SCO primarily focuses on regional security and political issues, with a limited global impact. |
In summary, BRICS and SCO are distinct organizations with different objectives and areas of focus. BRICS emphasizes economic cooperation and global governance reform, while SCO is primarily a regional political and security grouping with a focus on Eurasian security and political issues. The motivations and purposes behind their formations also differ, with SCO having clear regional security objectives, while BRICS began as a looser collaboration for economic cooperation.
Way Forward (General)
- Establish BRICS Space Exploration Consortium: India's proposal to create a BRICS Space Exploration Consortium can foster collaboration in space technology and research. Initiatives like the Chandrayaan 3 mission can demonstrate successful joint efforts in space exploration.
- Support Competitive Advantages in Digital Business: BRICS nations can collaborate to support each other in developing competitive advantages in the digital business arena, such as digital transformation, e-commerce, and fintech.
- Invest in Skill Technology and Education: Investing in skill development, technology transfer, and education can strengthen the human capital in BRICS countries, fostering innovation and economic growth.
- Conservation Efforts: Collaborative conservation initiatives, like a Big Cat Alliance, can address ecological and environmental challenges shared by BRICS nations, promoting sustainable development.
- Internal Unity and Cohesion: Ensuring internal unity and cohesion among BRICS members is essential for effective collaboration. Strengthening diplomatic ties and addressing internal disputes will help maintain the group's integrity.
- Permanent Secretariat: Establishing a permanent secretariat for BRICS that operates year-round can enhance the group's efficiency and ensure continuity in decision-making and implementation
Way Forward (Swing States)
BRICS also aids India in its pursuit of collaboration with swing states. These swing states possess the potential to influence the global balance of power due to their strategic positioning and capabilities. According to Goldman Sachs, there are four distinct categories of swing states:
- Supply Chain Dominators:
These nations possess the ability to control crucial elements within the global supply chain, exemplified by Taiwan (Resistor production), Egypt (trade), and Latin American countries (Lithium triangle).
- Shoring Trend Capitalizers:
This group comprises countries well-positioned to take advantage of prevailing trends, including near-shoring, friend-shoring, and off-shoring
For instance, manufacturing nations seeking to diversify their supply chains away from China can benefit from BRICS cooperation.
- Capital Rich Players:
- These countries possess a disproportionate amount of capital and exhibit a willingness to deploy it for various purposes, including investments and development initiatives.
- Countries with Global Leadership Potential:
- This category encompasses states capable of providing leadership on critical global issues, such as navigating challenges like the "Gilderbeeg Trap."
Through the BRICS platform, India can effectively engage and collaborate with these swing states. BRICS' collective economic strength, political influence, and diplomatic reach make it an instrumental vehicle for fostering cooperation with these strategically important nations. This approach can further India's interests and contribute to shaping the evolving global power dynamics.
Definitions
- Near-Shoring:
Near-shoring refers to the practice of relocating business processes, services, or manufacturing to a neighboring or nearby country, typically in the same geographic region or continent. The primary goal of near-shoring is to reduce costs while maintaining proximity, which can facilitate easier communication and collaboration. This strategy is often chosen to take advantage of lower labor costs in nearby countries while avoiding some of the challenges associated with offshoring to distant locations.
- Friend-Shoring:
Friend-shoring is a variation of offshoring where a company outsources its business processes or services to a country with which it shares strong cultural, political, or economic ties. This approach is often chosen to leverage a sense of familiarity and trust between the outsourcing company and the destination country. Friend-shoring is characterized by the desire to maintain a close and cooperative relationship with the offshore partner.
- Offshoring:
Offshoring involves the practice of outsourcing certain business functions, services, or manufacturing processes to a foreign country, often one that is geographically distant from the company's home country. The primary motivation behind offshoring is to reduce costs, take advantage of specialized skills or expertise, or access a larger labor pool. Offshoring can encompass a wide range of activities, including call centers, software development, manufacturing, and back-office operations.
- Deglobalization:
Deglobalization refers to the process of reducing or reversing global integration and interdependence, often characterized by the imposition of trade barriers, protectionist measures, and a shift towards more self-sufficient or domestic-oriented economic policies. It can involve a decrease in international trade, investment, and cooperation.
- Dedollarization:
Dedollarization is the reduction in the use of the United States dollar (USD) in international transactions, foreign exchange reserves, and as a global reserve currency. It often involves diversifying reserves into other currencies and assets to reduce dependency on the USD.
- Reminbi (RMB):
The Renminbi (RMB) is the official currency of the People's Republic of China. It is often referred to as the Chinese yuan (CNY) in international contexts. The RMB is used for trade and financial transactions in China and is gradually gaining international prominence.
- Debt Trap Diplomacy:
Debt Trap Diplomacy is a term used to describe a situation where one country extends loans to another country with the intention of gaining influence or control over the debtor nation. If the debtor nation is unable to repay the loans, it may become economically and politically dependent on the creditor nation.
- Global South:
Global South refers to a term used to describe countries and regions located primarily in the Southern Hemisphere, often characterized by lower levels of economic development, lower income per capita, and historically marginalized positions in the global economy. It is contrasted with the Global North, which includes more economically developed countries.
- Multipolar World:
A Multipolar World refers to a global geopolitical landscape characterized by the presence of multiple major powers or centers of influence, rather than a single dominant superpower. In a multipolar world, various countries or regions hold significant economic, political, and military power.
- Dehyphenation:
Dehyphenation is a diplomatic approach where a country seeks to separate and disentangle its relationships with two or more conflicting or adversarial parties. It involves avoiding a "hyphenated" foreign policy, where one's relationship with one party is conditioned or linked to its relationship with another.