Prime Minister to attend BRICS Summit at from 13th to 14th November

Syllabus subtopic: Bilateral, regional and global groupings and agreements involving and/or affecting India's interests

News: Prime Minister will be in Brasilia, Brazil on 13th - 14th November 2019 to attend the 11th BRICS summit. The theme of the BRICS summit this year is "Economic Growth for an Innovative Future.”

Prelims focus: About BRICS and its member countries

Mains focus: Significance of BRICS for India and Indian concerns

About BRICS:

 BRICS brings together five major emerging economies( Brazil, , India, , ) comprising 42 percent of the world's population, having 23 percent of the global GDP and around 17 percent of the share and world trade.  BRICS countries come from Asia, Africa, Europe and Latin America and all are member of G-20  Together the nation account for 26.46% of world’s land area, 42.58% of world’s population, 13.24% of world bank voting power and 14.91% of IMF quota shares  Through BRICS, the countries can have multilateral relations in their local currencies. This helps all of them directly as the Forex is not depleted and their own currencies are strengthened.  They promote South-South cooperation and North-South dialogue. (South represents developing countries and North represents Developed)  According to IMF estimate BRICS countries generated 22.53% of worlds GDP and they contributed more than 50% of economic growth during the last 10 years.  BRICS cooperation has two pillars including consultations on issues of mutual interest through meeting of leaders and ministers as well as cooperation through meeting of senior officials in a number of areas including trade, finance, health, education, science and technology, agriculture, communications IT etc.

Achievement of BRICS in 10 Years

 There is a fair degree of cooperation on issues such as trade, infrastructure finance, urbanization and climate change  Institutionalization of the (NDB) and the Contingency Reserve Arrangement

 BRICS countries have become a significant constructive force in promoting multilateral global order, propelling international economic globalization and promoting cultural diversity  BRICS nations adhere to the principle of equality, negotiation, and pragmatic cooperation. The principle of equality is the foremost one  BRICS nations have successfully pushed for reforms to the Bretton Woods system, the World Bank and the IMF.  BRICS’s contribution to world’s GDP has increased from 12 percent to 23 percent and its trade volume has increased from 11 percent to 16 percent of the world total  People-to-people exchanges and education cooperation

Issues/Challenges

 Changing power equations within BRICS. China’s dominance is a reality even as the grouping asserts the sovereign equality of all members.  Bilateral issues, as for example, recent military standoff between India and China on the Doklam plateau  There is only hollow promise by Russia and China over the UN reform and admission of India and Brazil in UNSC as permanent members  The economic structures and development trends of the BRICS countries are very similar which leads to economic competition and conflicts  NDB failed to act as an alternative to IMF and WB till now. NDB has dispersed loans totalling $5.1 billion — all to its members only  Delay to set up the BRICS credit rating agency that India favours Way Ahead

 Establish an arbitration mechanism to resolve economic conflicts that emerge among nation  NDB should disperse more loan to other developing countries of Asia and Africa  BRICS should also work towards creating a common currency and credit rating agency to reduce its dependence on dollar and western countries  Develop a framework to fight against protectionist trade policy adopted by US  Develop a mechanism to resolve bilateral issues  Adopt proactive measures to resolve rising inequality among member countries  The ultimate aim for the BRICS should be to take up a leadership role inreforming global financial and political institutions. This couldn’t be happen without enhanced engagement