Economics Current

Relevance of BRICS

Relevance of BRICS
What is BRICS? BRICS is the acronym for an association of five major emerging national economies of the world- Brazil, Russia, India, China, and South Africa. Originally the first four were grouped as "BRIC" before the inclusion of South Africa in 2010. The BRIC had originated in a Goldman Sachs paper - Building Better Global Economic BRICs - as part of an economic modeling exercise to forecast global economic trends over the next half-century. The BRICS member nations are known for their significant influence on regional affairs and all of them are members of G-20. The BRICS nations have met annually at summits since the year 2009. South Africa had hosted the 10th BRICS summit in July 2018. Analysis of past BRICS summits: The First Summit (2009) - Russia There were discussions on the economic and financial issues arising out of the 2008 financial crisis with an emphasis on reform of international financial institutions. The summit's focus was on the means of improving the global economic situation. It was also discussed how the four countries could better co-operate in the future through more involvement in global affairs. The Second Summit (2010) - Brazil Several intra-BRICS Cooperative Institutions were launched, including a meeting of National Security Advisors, a Business Forum and a meeting of Ministers of Agriculture to boost the agricultural base of the respective member countries. Development banks from each country signed a Memorandum of Cooperation for mutual assistance. The Third Summit (2011) - China There were pleas for Reforms in the UN Security Council. This was South Africa`s first summit as a Member nation. The Fourth Summit (2012) - India This summit ensured financial cooperation with third nations through the establishment of the BRICS Bank for financing infrastructure needs and sustainable development projects of BRICS and other developing countries. The Fifth Summit (2013) - South Africa This summit laid the foundation of the Contingence Reserve Arrangement with an initial amount of USD $ 100 billion. There was also the establishment of a BRICS Think Tank Council, called the eThekwini Declaration. The Sixth Summit (2014) - Brazil The theme for this summer was Inclusive Growth, Sustainable Solutions. Agreements were made for the New Development Bank to fund infrastructure and sustainable development projects in emerging markets. The Seventh Summit (2015) - Russia The process of ratification of constituting agreements of Contingency Reserve Arrangement as well as the New Development Bank was done. The Eighth Summit (2016) - India BRICS had encompassed 43% of the world population, 30% of the world GDP and 17% share in the world trade. Deliberations to deepen, sustain and institutionalize BRICS cooperation and implementation of the decisions from previous Summits. The Ninth Summit (2017) - China The strategic Framework of BRICS Customs Cooperation and the agenda on economic and trade co-operation were discussed. The Tenth Summit (2018) - South Africa This was held on the occasion of the centenary of the birth of Nelson Mandela. The BRICS-AFRICA Outreach was discussed. Characteristics of BRICS: •Represents around 40% of the world`s population. •It accounts for $20 Trillion of GDP which is growing at 28% Growth Rate. •There are no European or North American countries that are members. What is the significance and relevance of BRICS? After 10 years, BRICS has come a long way in promoting economic growth and development among its member nations and has also had an impact on the international community through its reforms and developments. •There is cooperation on issues such as trade, infrastructure finance, urbanization, and climate change. •BRICS nations have become a significant constructive force in promoting multilateral global order while accelerating international economic globalization and promoting cultural diversity. •BRICS nations have pushed for and achieved reforms to the Bretton Woods system, the World Bank and the IMF. •BRICS’s contribution to the world’s GDP has increased from 12 to 23 percent and trade volume has increased from 11 to 16 percent. •The agenda of BRICS summits has widened over the years to encompass global issues. •The New Development Bank and the Contingent Reserve Arrangement are the significant financial mechanisms under BRICS. •BRICS challenges the monopoly of Western developed nations by empowering developing nations through its policies.

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