BRICS and India
This article deals with ‘BRICS and India – UPSC.’ This is part of our series on ‘International Relations’ which is important pillar of GS-2 syllabus . For more articles , you can click here
- BRICS : Brazil Russia India China South Africa .
- Term was coined by Jim O Neil, an economist at Goldman Sachs in 2001 as BRIC . Without ‘S’ .
- BRIC was officially formed at Yekaterinburg summit in 2009. South Africa joined the bloc in 2010 and it became BRICS
- It is Economic grouping with political motives
- If BRICS nations start to trade in their domestic currencies it would break the dominance of dollar
BRICS as an organisation
- A non western economic organisation
- Structure / institution = Multilateral
- Purpose goals = economic, geo- political
- Norms = Non interference in each others internal affairs , respects other international institutions
- Against uni polarity , searches for multipolarity
Factors that led to creation of BRICS ( at Yekaterinburg 2009)
BRICS is a unique organisation of countries that came together in not because of geography, history or wealth, but because of their promise as key “emerging economies”.
- 2008 financial crisis in the west while BRICS nations were growing at that time
- IMF and WB with western clout have become unrepresentative institutions dominated by western economies
- Search for multipolarity was another reason for formation of BRICS
Basic stats of BRICS
- 40% world population
- 20% world GDP
- 30% world landmass
- Forex reserve of $4.4 trillion. China alone has $3 trillion
- Trade of $500 billion
Importance of BRICS
- Economic :
- Combined GDP, accounts for roughly 20% of the total gross world GDP
- BRICS Nations are the fastest growing economies .
- BRICS nations are lucrative investment destinations in the world
- Emerging multilateral financial institutions like AIIB and BRICS Bank are alternative to Western dominated World Bank and IMF.
- Political and
- China, Russia and India are the most powerful countries in the world by military strength after US with advance naval forces
- Accounts for nearly 40% of the world population with huge number of people in working age group
- Competition : All BRICS countries want to become regional powers & frequently their interests collide with each other
- Dominance of the Chinese economy makes it union of unequal members. Jim O’ Neil said that Chinese forex is bigger than all other BRICS nations combined
- Members are too similar in some key areas. Hence, they don’t complement each other because each has same strength and weakness.
- Too much Diversity in other areas like starkly varying political systems, economies, and national goals, and are located in different corners of the globe.
- BRICS nations compete in third markets. In many areas, from clothing (China, India and Brazil), through economic influence in Africa (China, South Africa and India) etc BRICS countries compete with one another.
- Contradictions on Trade : Brazil and Russia are commodity exporting countries and want high commodity prices while China and India are importing countries
- Large number
of conflicting issues between members
- India China , China Russia border disputes
- China artificially undervalues Renminbi
- China has ~ 30 trade disputes with BRICS
- Diverging stands on
- NSG : China stopping entry of India in NSG
- UNSC reforms : India & South Africa want reforms while China oppose
- Developments on the economic front have particularly been disturbing: Brazil’s economy is shrinking; the South African economy is stagnant. Russia, hit hard by a sharp fall in oil prices, sees its economic woes grow by the day. China is also facing slowdown
Way forward from BRICS
With BRICS going no where and China using it to promote its own interests, there is need to look toward formation and re-activation of alternate forums (this doesn’t mean India should abandon BRICS altogether. India should remain in the group but betting all on BRICS will be futile) . These forums can be
- There is a need to revive the forgotten India, Brazil, South Africa (IBSA) group—perhaps enlarge it to include Turkey, Indonesia, South Korea and the like to develop alternatives to China-centric groupings.
- India also needs to invest more in building groups that bridge the north-south divide. One such group is the G4 (Brazil, India, Germany and Japan) aspirants to the UN security council.