BRICS FM MEETING IN SOUTH AFRICA

India’s External Affairs Minister is in Cape Town, South Africa, to attend a meeting of the foreign ministers of BRICS.
The foreign ministers’ meeting will finalise the agenda for the 15th BRICS summit scheduled to be held in South Africa this year.
The theme of BRICS 2023 is: “BRICS and Africa: Partnership for Mutually Accelerated Growth, Sustainable Development, and Inclusive Multilateralism”.

Two items on the agenda are attracting notice for their potential for a greater geopolitical consolidation of the grouping:

As many as 19 countries are said to be in the queue to join BRICS.

It is not clear which countries might be admitted, but any expansion can be seen as strengthening the group’s heft as a spokesperson of the developing world.
By admitting some key countries in the list, BRICS could lay claim to representing more than half the world’s population.
Significantly, the list includes big oil producers Saudi, Iran, the UAE, Nigeria, and Venezuela.
The rush towards BRICS is driven by two basic impulses:
First, there is considerable anti-US sentiment in the world, and all these countries are looking for a grouping where they can use that sentiment to gather together.
Second, there is a lot of appetite for multipolarity, for a platform where countries of the Global South can express their solidarity.

China in BRICS

The idea of BRICS came between 2001 and 2003 from then Goldman Sachs chief economist Jim O’Neill.
He projected that the four emerging markets of Brazil, Russia, India, and China would be the future economic powerhouses of the world, with South Africa being added later.
China is driving the expansion of the group.

India in BRICS

India should not be seen as ganging up with an anti-West coalition.
India is also part of the Shanghai Cooperation Organisation (SCO), and despite problems, it has relations with Russia, with China.
While China does want BRICS to be an anti-western group, the Indian view is that it is a “non-western” group and should stay that way.
One view on the expanding membership is that it could sideline India’s role in the group.

Common currency

The idea of a common currency was proposed by Russia’s President at the Beijing BRICS summit last year.
The idea got a cautious reception, with the leaders deciding to set up a committee to study its viability.

Challenges to the idea:

There are complications, such as the setting up of a common central bank of member countries that have different economic and political systems and are located on different continents.
Countries are not yet ready to give up dollar, including Russia and China.

What is the BRICS?

BRICS is an acronym that started as BRIC in 2001, coined by Jim O’Neill (a Goldman Sachs economist) for Brazil, China, India, and Russia.
Later in 2010, South Africa was added to become BRICS.
Goldman Sachs claimed that the global economy will be dominated by the four BRIC economies by 2050.
The main reason for such a claim was that China, India, Brazil, Russia, and South Africa were ranked among the world’s fastest-growing and emerging market economies for years.
The main comparative advantage of this group is their low labour costs, favourable demographics, and abundant natural resources at the time of the global commodities boom.

How did BRICS Begin?

Russia initiated the creation of BRICS.
In 2006, they held the first BRICS Ministerial Meeting proposed by the then Russian President Vladimir Putin.
At the initiative of Russia, on May 16, 2008, they hosted a meeting of BRICS Foreign Ministers at Yekaterinburg, Russia.
They issued a Joint Communique on common stances on topical global development after the meeting.
Russia hosted the first BRIC Summit on June 16, 2009, at Yekaterinburg.
It pledged to promote cooperation and dialogue among the BRIC countries in a transparent, open, proactive, and incremental manner.

Role of the BRICS

The BRICS countries agreed to undertake measures of mobilizing sufficient resources so that the IMF can strengthen its potential to combat all kinds of crisis.
They also created the BRICS Interbank Cooperation Mechanism that provides Extending Credit Facility in Local Currency and the BRICS Exchanges Alliance.
The BRICS nation offered a source of foreign expansion for firms and solid returns for institutional investors.
They also focused on some regional issues, including the problems related to Libya, Syria, Afghanistan and Iran (their indigenous nuclear program).

Principles of BRICS: