The abbreviation BRICS stands for Brazil, Russia, India, China, and South Africa, a grouping of the world's leading emerging economies. British economist Jim O'Neill coined the term to describe the four growing economies of Brazil, Russia, India, and China.
The organisation was formally established at the inaugural meeting of BRIC Foreign Ministers in 2006 at the United Nations General Assembly and later South Africa was asked to join in December 2010, after which the abbreviation BRICS was used.
The BRICS group brings together five of the world's most populous developing countries, accounting for 41% of global population, 24% of global GDP, and 16% of global commerce.
According to the acronym B-R-I-C-S, the chairmanship of the forum is rotated annually among the members. For the year 2021, India was the chair.
The presidents signed the Agreement establishing the New Development Bank during the Sixth BRICS Summit in Fortaleza, Brazil, in 2014. (NDB - Shanghai, China). They also agreed to the BRICS Contingent Reserve Arrangement, which will offer members with short-term cash support.
History & Evolution
It was Goldman Sachs economist Jim O'Neill who first proposed the BRIC [Brazil, Russia, India, and China] concept in 2001 in their Global Economics Paper No. 66, "The World Needs Better Economic BRICs."
The first formal BRIC summit began in 2009 in Yekaterinburg, Russia. On September 21, 2010, during their meeting in New York, the BRIC Foreign Ministers agreed that South Africa could be invited to join the group.
What are the Three Pillars of BRICS?
Political And Security: Increase cooperation and dialogue on global and regional security issues, global political developments, and reforming the multilateral system to make it relevant for the twenty-first century. Cooperation in counter-terrorism and counter-financing remains a critical component of this pillar.
Economic & Financial: Expansion of intra-BRICS cooperation in areas such as trade, agriculture, infrastructure, small and medium-sized enterprises, energy, finance and banking, and others in order to promote economic growth and development for mutual prosperity. BRICS cooperation is aimed at promoting collaborative and innovative approaches to achieving the Sustainable Development Goals through this pillar.
Cultural & People to People Exchanges: Enhance intra-BRICS people-to-people contacts in the cultural, academic, youth, sports, and business sectors through regular exchanges. Additionally, this pillar of BRICS cooperation facilitates exchanges between legislators, young scientists, and others.
Potential of BRICS
The importance of BRICS has grown in recent years. The forum is viewed as a catalyst for reviving the world's stagnation and reorienting it toward development and prosperity. The following are the primary motivations for this discussion:
Cooperation benefits not only the BRICS members' common interests but also the global economy as a whole: the BRICS now account for 19% of global GDP and 61% of global growth.
BRICS places a premium on development in order to accomplish the global goal of shared development. Member cooperation has expanded in recent years to encompass a broad range of issues, including trade, banking, taxation, customs, public health, science and technology, agriculture, and culture.
BRICS is committed to establishing a more democratic and equitable international system, rather than contesting or reconstructing the existing one. The BRICS countries have now joined the G20, a significant forum for debating economic issues and economic reform.
Due to their size, economic potential, and desire for a stronger political voice on the global stage, the BRICS economies are in a unique position.
Limitations
BRICS, on the other hand, is far from perfect. Members of the BRICS have yet to play a role in global economic governance that is commensurate with their economic weight and achievements. BRICS is confronted with a number of political challenges:
China's economic dominance is the main issue. China is not only economically larger than all of the other members put together, but it is also almost everyone's largest trading partner. The remaining BRICS countries, on the other hand, have very limited economic ties with one another.
These countries' foreign policy relations aren't always friendly, and there's a lot of mistrust at times. India and China have the most obvious divide, followed by Russia and China. As a result, disagreements on specific political and trade issues do arise from time to time.
The BRICS members are primarily regional in nature, with little cross-pollination. As a result, they are having difficulty developing a substantive agenda.
Furthermore, their capabilities in terms of international rule-making and decision-making were lacking. BRICS is progressing in a variety of areas, but it will take time.
The 13th BRICS Summit was presented by Prime Minister Shri Narendra Modi virtually. The Summit's theme, BRICS@15: Intra-BRICS Cooperation for Continuity, Consolidation, and Consensus, was chosen by India.
Important Developments During Summits
Yekaterinburg Summit (2009): This summit was held against the backdrop of the global financial crisis, with the goal of improving the global financial situation and reforming financial institutions. The BRIC countries emphasised the need for a new global reserve currency for the first time at this summit.
Brasilia Summit (2010): South Africa formally joined BRIC, giving the group its current name, BRICS. This symposium examined a variety of topics, including Iran's nuclear programme and the global financial crisis. At this summit, the BRIC countries' development banks, notably India's EXIM Bank, signed a memorandum of intent for cooperation.
Sanya Summit (2011): This summit led in the adoption of the Sanya Declaration, which urged for UNSC reforms among other things. Additionally, a critical decision was made to stop bilateral trade payments in USD in favour of bilateral credit in national currencies.
New Delhi Summit (2012): During the meeting, a Delhi Declaration was released, defining these countries' roles in global concerns. The summit's main goal was to establish a New Development Bank to fund projects in developing countries. This suggestion was proposed by India. The summit's conclusion, the Delhi Declaration, referred to it as a "BRICS-led South-South development bank."
The BRICS group of countries also began planning an optical fibre submarine communications cable system, known as the BRICS Cable, to carry telecommunications between the BRICS countries since 2012. The project is still underway.
Durban Summit (2013): The 5th BRICS Summit took place in Durban, South Africa, on March 26-27, 2013 under the theme "BRICS and Africa: Partnership for Development, Integration, and Industrialization."
This summit concluded the first cycle of BRICS summits and was also the summit's first appearance on African soil. This is especially significant because it coincides with the Organization of African Unity's/African Union's 50th anniversary (AU). The 'eThekwini Declaration and Action Plan' were adopted as the summit's outcome documents at the summit's conclusion.
The leaders of the BRICS countries agreed to establish a New Development Bank and stated that the bank's initial capital contribution should be significant and sufficient to enable it to finance infrastructure effectively. The agreement was formally signed during the 6th summit at Fortaleza, Brazil in 2014.
Additionally, the leaders agreed to establish the Contingent Reserve Arrangement (CRA), beginning with a $100 billion fund. The CRA would help the BRICS countries avoid short-term liquidity constraints and strengthen financial stability.
They also agreed to establish the BRICS Business Council and BRICS Think Tanks Council. The BRICS Think Tanks Council will bring together independent think tanks to form a network to develop policy options such as BRICS evaluation and long-term strategy. The BRICS Business Council will bring together business associations from each BRICS country and will facilitate ongoing engagement between the business communities.
The leaders of the BRICS countries reaffirmed their commitment to long-term infrastructure development, industrial development, job creation, skill development, food and nutrition security, poverty eradication, and long-term development in Africa. The leaders of the BRICS countries reiterated their commitment to African peace and security. Additionally, the BRICS leaders urged the United Nations (UN) to bolster cooperation with the African Union (AU) and its Peace and Security Council, consistent with UN Security Council resolutions.
To address unemployment, the BRICS leaders are committed to fostering growth and financial stability. The leaders reaffirmed their position that the International Monetary Fund should be reformed to reflect the BRICS' and other developing countries' growing importance and that a quota formula agreement should be reached by January of next year.
Goa Summit (2016): At this meeting, a deal to establish an Agriculture Research Platform was announced. Additionally, the countries have begun discussions on establishing a Railway Research Network. All of the BRICS countries have endorsed the New Development Bank. Additionally, the BRICS had intended to establish a credit rating agency, but this has been put on hold for the time being.
Conclusion
The New Development Bank and the Contingency Reserve Arrangement are the practical outcomes of various BRICS summits, respectively (CRA). Other organisations include the BRICS Think Tanks Council, which was proposed and launched in 2013 by South Africa, and the BRICS Economic Research Group, which brings together economic think tanks and chief editors of business and economic magazines/publications from BRICS to advance BRICS thinking on economic linkages and developmental challenges both within and outside BRICS.