Expansion of BRICS

General Studies Paper – 2

Context: Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates have joined BRICS as new full members.

About

• It was done as per the decision adopted by the 15th BRICS Summit in 2022.
• A proposal to admit six countries, including Argentina, into the bloc with effect from January 1.
• Argentina’s new President announced withdrawing his country from becoming a member of the BRICS.

About BRICS

• BRICS is an acronym that refers to a group of five major emerging national economies: Brazil, Russia, India, China, and South Africa.
• The term was originally coined by economist Jim O’Neill in 2001.
• BRICS brings together five of the largest developing countries of the world, representing around 41% of the global population, around 24% of the global GDP and around 16% of global trade.
• Origin: 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 2006.
• The grouping was formalized during the 1st meeting of BRIC Foreign Ministers on the margins of UNGA in New York in 2006.
• The success of the meet led to the crystallisation of an annual summit under the aegis of BRIC.
• Initially, the grouping was termed BRIC as South Africa was inducted in 2010 and from there on it has been referred to as BRICS.

Summits:  The governments of the BRICS states have met annually at formal summits since 2009.

Over a period of time, BRICS countries have come together to deliberate on important issues under the three pillars of:

• Political and security,
• Economic and financial and
• Cultural and people-to-people exchanges.

New Development Bank: Formerly referred to as the BRICS Development Bank, is a multilateral development bank established by the BRICS states.

The Bank shall support public or private projects through loans, guarantees, equity participation and other financial instruments.

Significance of Expansion

• Strengthening the Group: BRICS currently represents around 40% of the world’s population and more than a quarter of the world’s GDP.

With the additions, it will represent almost half the world’s population, and will include three of the world’s biggest oil producers, Saudi Arabia, the UAE and Iran.

• Focus on Middle East: With the inclusion of Saudi Arabia, Iran, the UAE, and Egypt, there is a discernible Middle East focus, bearing geo-economic, geostrategic, and geopolitical implications.
• Representative of Developing Countries: The addition of new members bolsters the BRICS group’s influence as a representative body of the developing world.
• Voice for Global Governance: The grouping now represents a larger share of the world’s population and economy.

However, this only means that the group is potentially a powerful voice for reform of the arrangements for global governance and a powerful actor in these arrangements.

Impact on India’s Position

Chinese Dominance: Among the newly admitted members, India regards each as a valuable partnership to cultivate.

• Apprehensions have emerged regarding the potential for the group to become more pro-China, potentially overshadowing India’s influence and concerns.
• Although China desires BRICS to embody an anti-western stance, India’s perspective is inclined toward maintaining the group as a “non-Western” entity.

Addressing the Challanges: For BRICS to maintain long-term effectiveness, India and China must address their border disputes and cooperate on complex global matters, including allocating resources for the growth of developing economies.

If India aims to genuinely represent the voice of the Global South, harmonizing these diverse interests into a unified stance could present a more formidable challenge than initially anticipated.

Way Ahead

• As the BRICS operates based on consensus-driven decision-making, attaining consensus among 10 countries characterized by diverse economies, geographical locations, and interests proves to be substantially more challenging than doing so among the original five members.

To ensure the continued effectiveness and consistency of the institution, in the long run, BRICS might opt to focus on easier-to-achieve objectives.