REFORMING BRICS

Context

  • The BRICS grouping succeeded up to a point, but it now confronts multiple challenges.

Carrying BRICS forward

  • In an era of complex geopolitics, they have bravely continued holding dozens of meetings and summits, even as China’s aggression in eastern Ladakh last year brought India-China relations to their lowest point in several decades. 
  • Developed a common perspective on a wide range of global and regional issues
  • Established the New Development Bank
  • Created a financial stability net in the form of Contingency Reserve Arrangement;
  • Setting up a Vaccine Research and Development Virtual Center.

13th BRICS Summit

  • The 13th BRICS summit held in digital format under India’s chairmanship.
  • The theme for the Summit: ‘BRICS@15: Intra-BRICS cooperation for continuity, consolidation and consensus.’
  • The summit was dominated by the developments in Afghanistan, and adopted the BRICS Counter Terrorism Action Plan.
  • With the agreement on Remote Sensing Satellite Constellation between space agencies, a new chapter of cooperation has begun.
  • The document, titled the ‘New Delhi Declaration’, also called for addressing the humanitarian situation in Afghanistan and urged the need to uphold rights of women, children and minorities.
  • As the current chair, India has outlined four priorities.
    • The first is to pursue reform of multilateral institutions ranging from the United Nations, World Bank and the International Monetary Fund to the World Trade Organization and now even the World Health Organization.
    • The second is the resolve to combat terrorism. 
      • Tragic developments concerning Afghanistan have helped to focus attention sharply on this overarching theme, stressing the need to bridge the gap between rhetoric and action.
      • BRICS Counter Terrorism Action Plan containing specific measures to fight radicalisation, terrorist financing and misuse of the Internet by terrorist groups.
    • Promoting technological and digital solutions for the Sustainable Development Goals and expanding people-to-people cooperation

Challenges

  • China’s centrality and dominance of intra-BRICS trade flows
  • Diversification and strengthening of regional value chains
  • Beijing’s aggressive policy, especially against India, puts BRICS solidarity under exceptional strain
  • BRICS countries have not done enough to assist the Global South to win their optimal support for their agenda. 
  • China, for example, feels little hesitation in supporting clear-cut denunciations of terrorist groups, even as its backing of Pakistan, which is heavily enmeshed with a host of international terrorist groups, remains steadfast.
  • Perhaps, some of the ideas proposed in the early days were too ambitious, definitely complex, even impractical. There are nearly 100 initiatives that BRICS has launched since its inception, including memorandums, roadmaps, action plans, and forums.

Conclusion

  • BRICS negotiators need to master the art of brevity and tight drafting. When they do so, they will realise that unduly lengthy communiqués are an index to the grouping’s weakness, not strength.

Back to Basics

About BRICS

  • A group comprising Brazil, Russia, India, China and South Africa is chaired by turn.
  • The acronym BRIC was coined by economist ‘Jim O’Neill’ of Goldman Sachs in 2001 to indicate the emerging powers that would be, alongside the United States, the five largest economies of the world in the 21st century.
  • The importance of BRICS is self-evident: it represents 42% of the world’s population, 30% of the land area, 24% of global GDP and 16% of international trade.
  • BRIC turned itself into BRICS in 2010, with the entry of South Africa.
  • It strove to serve as a bridge between the Global North and Global South. 

Financial Architecture

  • Currently, there are two components that make up the financial architecture of BRICS, namely, the New Development Bank (NDB), or sometimes referred to as the BRICS Development Bank, and the Contingent Reserve Arrangement (CRA). Both of these components were signed into treaty in 2014 and became active in 2015.
  • The BRICS Contingent Reserve Arrangement (CRA) is a framework for providing protection against global liquidity pressures. This, includes currency issues where members’ national currencies are being adversely affected by global financial pressures.

12TH BRICS SUMMIT

Context

  • Recently, the 12th BRICS or 2020 BRICS Summitwas held virtually and was hosted by Russia. 

Key Details

  • The theme of the 12th BRICS Summit was ‘Global Stability, Shared Security, and Innovative Growth’.
  • The Summit is attended by the Heads of State or Heads of Government of the five member states– Brazil, Russia, India, China and South Africa. 
  • India will be taking over the Chairship of the BRICS, which would be the third BRICS Presidency for India since its inception (after 2012 and 2016) and will host the 13th BRICS Summit in 2021.
  • During the 12th Summit, held in the backdrop of the 75th Anniversary of UN and in the midst of the COVID-19 pandemic, leaders would be discussing intra-BRICS cooperation and key issues in the global context, including the reform of the multilateral system, measures to mitigate the impact of the ongoing COVID-19 pandemic, cooperation in Counter Terrorism, trade, health, energy and people to people exchanges.
  • The BRICS summit is also taking place at a time when India and China have squared off at their border, a temporary line called the Line of Actual Control (LAC).
  • In a step forward, the Strategy for BRICS Economic Partnership 2025 was signed, having been up for review at the end of a five-year period. Focusing on three priority areas — trade, investment and finance; digital economy; and sustainable development — it seeks to chart out the future course of action for BRICS economic cooperation. 
  • The adoption of the strategy does indicate a commitment to carry forward the existing cooperation between members on areas like promoting cooperation among businesses of BRICS countries; reforming of WTO, IMF and World Bank; advancing the Contingency Reserve Arrangement (CRA); and strengthening the New Development Bank (NDB).
  • The members also signed the BRICS counter-terrorism strategy with the objective of contributing to the global efforts to combat terrorism while also strengthening intra-BRICS ties in the area.

Key-Highlights of the 12th BRICS Summit

India’s Stand

1- Terrorism

  • India stated that the biggest problem that the world is currently facing is ‘terrorism’. There’s a need to confront the countries which support and sponsor terrorism must be held accountable and the problem must be addressed in a unified manner.
  • India also acknowledged the support of Russia to the BRICS Counter-Terrorism Strategyand further reiterated India’s support to it. 

2- United Nation Security Council (UNSC) Reforms

  • India highlighted the issue of credibility and effectiveness of the institutions which are important for global governance and urged other BRICS members for the support. 

3- Ongoing COVID-19 pandemic

  • As the world is hopeful for COVID-19 vaccines, India underscored the issue of cooperation amongst the BRICS partners on the production of the COVID-19 vaccines.Additionally, the scope of trade improvement amongst the BRICS nations was highlighted by India. 

4- Aatmanirbhar Bharat Campaign

  • India introduced Aatmanirbhar Bharat or the self-reliant campaign to its BRICS partners. India highlighted that the said campaign is based on a self-reliant and resilient India and it can act as a force multiplier for the global economyin the post-COVID-19 world.
  • Under this campaign, India delivered essential medicines to more than 150 countries because of the capability of the Indian Pharma Industry.

From the Indian perspective

  • BRICS has emerged the voice of developing countries, or the global south.
  • As these countries face an aggressive club of developed countries, raising challenges on issues from WTO to climate change, New Delhi believes BRICS has to protect the rights of the developing countries. The five BRICS countries are also members of G-20.
  • While the economic heft of three of the five countries has been dented in the last few years, the BRICS cooperation has two pillars — consultations on issues of mutual interest through meetings of leaders and ministers, and cooperation through meetings of senior officials in areas including trade, finance, health, education, technology, agriculture, and IT.
  • Also, India has to maintain the balancing act between Russia-China on the one side and the US on the other. While India has had a growing role in global affairs in the last decade or so, and is seen to be helping drive the global agenda, the current crop of BRICS leaders too is seen as strong personalities.
  • New Delhi believes that over the last few years, India has taken the lead in galvanising BRICS has also worked within the grouping to take a strong stand against terrorism and bring about focused consultations on specific aspects relating to terrorism.
  • China has called upon BRICS states to build cooperation on “digital transformation, especially in 5G, AI, the digital economy and others,” India has since the recent border clashes set out to prevent Chinese telecoms from participating in its 5G trials. In the aftermath of India-China border tensions earlier in 2020, India has ruled that for any FDI originating from a country that shares its border, government approval will be mandatory citing national security concerns.
  • India’s total intra-BRICS trade, which stood at $114.1 billion in 2018-19.

On the table in Brazil

  • This year, the joint working group on counter-terrorism has decided to constitute sub-working groups in five areas: terrorist financing; use of Internet for terrorist purposes; countering radicalisation; the issue of foreign terrorist fighters; and capacity-building.
  • It is expected that India will chair the subgroup on use of Internet for terrorist purposes.
  • The fact that BRICS has put counter-terrorism on top of the agenda has been a success for India.
  • The fact that it was achieved, despite the strained ties due to the standoff in Doklam, was a testimony to the value Beijing and New Delhi attach to the outcomes of the grouping.

Importance of BRICS

  • In 2001 and 2002, real GDP growth in large emerging market economies will exceed that of the G7.
  • At end-2000, GDP in US$ on a PPP basis in Brazil, Russia, India and China (BRIC) was about 23.3% of world GDP.
  • On a current GDP basis, BRIC share of world GDP is 8%. Over the next 10 years, the weight of the BRICs and especially China in world GDP will grow, raising important issues about the global economic impact of fiscal and monetary policy in the BRICs.
  • In line with these prospects, world policymaking forums should be re-organised and in particular, the G7 should be adjusted to incorporate BRIC representatives.
  • Eighteen years later, India finds itself as one of the emerging economies in the grouping and beyond, especially G20. BRICS now brings together five economies accounting for 42% of the world’s population, 23% of the global GDP and an around 17% share of world trade.
  • BRICS cooperation is broadly covered under Economic, political & security, and people-to-people exchanges. From inception, finance and trade is a major area of Intra-BRICS Cooperation. The New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA) are the major outcomes in this area.
  • The success of groupings such as BRICS will depend on the health of bilateral ties among those within the group.
  • BRICS cannot be a military and security grouping given the significant differences between each of the players, most notably between India, China, and Russia. 
  • While it is true that BRICS nations list one of their aims as establishment of a multipolar world order, they are hardly on the same page regarding its realization.

Back to Basics

  • As a formal grouping, BRIC started after the meeting of the leaders of Russia, India and China in St Petersburg on the margins of the G8-Outreach Summit in July 2006. The grouping was formalised during the first meeting of BRIC Foreign Ministers on the margins of the UNGA in New York in September 2006. The first BRIC Summit was held in Yekaterinburg, Russia, on June 16, 2009.
  • It was agreed to expand BRIC to BRICS with the inclusion of South Africa at the BRICS Foreign Ministers’ meeting in New York in September 2010. South Africa attended the third BRICS Summit in Sanya on April 14, 2011. 

Conclusion

  • India has already seen the impact of the COVID-19 pandemic on the global system leading to a rethink of several of its foreign policy measures. As it takes over the presidency of BRICS for 2021, India’s conduct as the chair will be an indication of how New Delhi sees its own position within BRICS going forward. This will be an interesting development to watch in light of its complicated relations with China, a growing closeness with the US as well as the implications of the growing Russia-China rapprochement.

BRICS MEET ON GREEN HYDROGEN INITIATIVES

Context

·         India is set to host a two-day summit on Green Hydrogen initiatives starting June 22 involving the BRICS nations.

About Green Hydrogen initiatives

·         The event offers a platform to share their respective Green Hydrogen initiatives and views on how to take it to the next level in their own countries.

  • The event will be anchored by India’s state-run power major NTPC.
  • The virtual summit will bring the best brains, policy makers and major stakeholders from the BRICS nations deliberating and discussing at length the future of hydrogen in the energy mix.
  • The representatives from each country would be sharing respective initiatives undertaken by their countries on utilisation of hydrogen and their future plans. The speakers will also share the relevance of different technologies developed on hydrogen and its priorities for their country and ideas integrating hydrogen in the overall energy policy framework by different countries.
  • The discussions to entail financing options for the emerging green hydrogen technologies and the institutional support needed to create the requisite ecosystem for the technology to flourish.

About Hydrogen

  • As the world rapidly moves to decarbonise the entire energy system, hydrogen is poised to play a vital role and build on the rapid scale-up of renewable resources across the world.
  • Hydrogen, when produced by electrolysis using renewable energy is known as Green Hydrogen which has no carbon footprint. This gives hydrogen the edge over other fuels to unlock various avenues of green usage.
  • However, challenges lie in terms of technology, efficiency, financial viability and scaling up which the summit will aim to address.
  • Green hydrogen has innumerable applications.
    • Green Chemicals like ammonia and methanol can directly be utilised in existing applications like fertilisers, mobility, power, chemicals, shipping among others.
    • Green Hydrogen blending up to 10 per cent may be adopted in CGD networks to gain widespread acceptance.
  • Further scaling up with greening of hard to abate sectors like steel and cement through hydrogen is to be explored.
  • Many countries have brought out their strategies and defined targets and roadmaps based on their resources and strengths.

Advantages of Green Hydrogen

  • Green hydrogen is Environment friendly because its usage led to zero emissions. It is a clean burning molecule which can decarbonise sectors like iron & steel, chemicals, and transportation.
  • Green Hydrogen will also help in transition towards clean electric mobility and will help in reducing dependency on minerals & rare-earth element-based battery for energy storage.

BRICS OPPOSES EXCEPTIONALISM

Context

  • Recently, China has sought to frame a joint statement from the Foreign Ministers of the BRICS [Brazil, Russia, India, China and South Africa] countries, who met virtually last week, as standing in opposition to what Beijing has increasingly hit out at “bloc politics” from the United States and the West.

Key Details

  • The BRICS Foreign Ministers, at a virtual meet, put out a joint statement on multilateralism, in addition to the usual Ministers’ press statement. 
  • Ironically, among the targets of Beijing’s recent attacks on what it calls “selective multilateralism” is the India-Australia-Japan-U.S.
  • Quad grouping, which Chinese officials have repeatedly criticised.
  • India, which is the BRICS chair this year and will host this year’s leaders summit, which may also take place virtually, finds itself in a curious position of being described by Beijing as both a partner and a target in its recent emphasis on the importance of “multilateralism” and its criticism of calls for a “rules-based order”, voiced not only by the U.S. but also by the Quad.

Multilateral system

  • On the “different interpretations” of multilateralism, the “BRICS countries, as representatives of emerging markets and developing countries, have tackled the problem head-on and given their answer.
  • Six Principles laid out by BRICS for the task of Strengthening and and Reforming the Multilateral System:
  • First, it should make global governance more inclusive, representative and participatory to facilitate greater and more meaningful participation of developing and least developed countries.
  • Second, it should be based on inclusive consultation and collaboration for the benefit of all.
  • Third, it should make multilateral organisations more responsive, action-oriented and solution-oriented based on the norms and principles of international law and the spirit of mutual respect, justice, equality, and mutually beneficial cooperation.
  • Fourth, it should use innovative and inclusive solutions, including digital and technological tools.
  • Fifth, it should strengthen the capacities of individual States and international organizations.
  • Sixth, it should promote people-centered international cooperation at the core. 

Way Forward

  • BRICS countries were “indeed different from a few developed countries in their attitude towards multilateralism and multilateral cooperation.”
  • The BRICS countries stress the need to observe the purposes and principles of the UN Charter and oppose exceptionalism and double standard.
  • BRICS pursue openness, inclusiveness and win-win cooperation, and reject bloc politics and ideological confrontation.

India can't use Brics to raise stature till interests with China don't  converge