BRICS: What’s on the agenda of the BRICS FM meeting in South Africa?

Why in News?

The External Affairs Minister of India S Jaishankar is in Cape Town (South Africa) to attend a meeting of the foreign ministers (FM) of BRICS – a grouping comprising Brazil, Russia, India, China and South Africa.
The FMs’ meeting will finalise the agenda for the 15th BRICS (South Africa) scheduled with the theme: “BRICS and Africa: Partnership for Mutually Accelerated Growth, Sustainable Development, and Inclusive Multilateralism”.

What’s in Today’s Article?

About BRICS:

Origin:
- The BRIC [Brazil, Russia, India and China] idea was first conceived in 2001 by Goldman Sachs as part of an economic modelling exercise to forecast global economic trends over the next half century.
- In 2006, the group was formalised as BRIC during the 1st BRIC FMs’ meeting on the sidelines of the General Debate of the UN Assembly in New York City.
- After a series of high-level meetings, the 1st BRIC summit was held in Yekaterinburg, Russia in 2009.
Expansion of BRIC to BRICS:
- BRIC FMs at their meeting in New York in 2010 agreed that South Africa may be invited to join BRIC.
- Accordingly, South Africa was invited to attend the 3rd BRICS Summit in Sanya (China) in 2011.
BRIC(S) Summits: Since 2009, the head of governments of the BRICS states have met annually at formal summits.

Significance of BRICS:

BRICS is an important grouping bringing together the major emerging economies from the world, comprising
- 41% of the world population,
- 24% of the world GDP and
- Over 16% share in world trade.
BRICS countries have been the main engines of global economic growth and have come together to deliberate on three pillars of
- Political and security,
- Economic and financial and
- Cultural and people to people exchanges.

Economic Cooperation among BRICS:

New Development Bank (NDB): During the 6th BRICS Summit in Fortaleza (Brazil) in 2014, the leaders signed the agreement establishing the NDB.
- It is a multilateral development bank (headquartered in Shanghai, China) operated by the five BRICS states.
- NDB has committed $32.8 billion in 96 socio-economic development projects so far.
The Contingent Reserve Arrangement (CRA): In 2014, the BRICS governments had signed a treaty, which aimed at forestalling short-term balance of payments pressures and strengthening financial stability of the BRICS nations.

What’s on the Agenda of 15th BRICS Summit?

Two items on the agenda are attracting attention for their potential for a greater geopolitical consolidation of the grouping:
- A plan to expand the membership of BRICS, and
- A common currency.

Looking for Multipolarity – Expanding the Membership of BRICS:

As many as 19 countries (such as Argentina, Mexico from Latin America; Nigeria, Algeria, from Africa; Saudi Arabia, UAE, from West Asia; Kazakhstan from Central Asia; Bangladesh and Afghanistan from South Asia; etc) are in the queue to join BRICS.
The rush towards BRICS is driven by two basic impulses:
- 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.
- There is a lot of appetite for multipolarity, for a platform where countries of the Global South can express their solidarity.

Common Currency:

The idea of a common currency was proposed by Russia’s President at the Beijing BRICS summit last year.
An insulation from the dollar is a tempting proposal, but not all members believe that it is an idea whose time has come.
An option is for members to trade with each other in their respective currencies. The India-Russia example has shown, this is not easy either.

China and India in BRICS:

The war in Ukraine has brought the West together on the one hand and strengthened the China-Russia partnership on the other.
- China is driving the expansion of the BRICS to challenge US hegemony with multilateralism.
While India’s presence at the G7 summit in Hiroshima and an informal Quad summit was seen as a sign of New Delhi’s US tilt, it attaches significant importance to the BRICS and Shanghai Cooperation Organisation (SCO).
- India called on BRICS nations to demonstrate their sincerity in reforming multilateral institutions, including that of the UN Security Council.
- However, one view on the expanding membership is that it could sideline India’s role in the group