BRIC(S) is the only grouping whose name was coined by a Wall Street-based finance company in 2001, while predicting a shift in global economic power, away from the developed G7 countries towards the developing world. It was, however, the shared will of BRICS countries to engage with one another as well globally, in articulating and addressing issues of concern for the developing world and engaging in the global quest for solutions to contemporary challenges that led to the formalisation of the grouping BRIC, now BRICS, in 2006.
Over the last two decades, the BRICS economies have contributed a substantial part of the global gross domestic product (GDP), world manufacturing (value added) and global manufacturing exports. As per 2012 International Monetary Fund (IMF) estimates of GDP at market prices, among the members of the G-20, India holds the 10th position while Brazil, China, Russia and South Africa hold the seventh, second, ninth and 19th positions, respectively. In terms of purchasing power parity, India occupies the third position and China, Russia, Brazil and South Africa hold second, sixth, seventh and 19th positions.
Structural economic transformation to enhance the role played by the manufacturing sector has been an important element of the BRICS countries’ development strategies, particularly in Brazil, China and India. While growing exports played a significant role in the economic growth of the BRICS countries, domestic consumption, investment and productivity growth are now playing key roles in their economic growth. Each country, however, had different experiences in promoting the development of the manufacturing sector and increasing its share in the GDP. Their growing middle class is another aspect of strength among BRICS economies. It is believed that by 2020 the middle class in BRICS countries will surpass that of the G7.
Between 2001 and 2010, BRICS countries maintained an average growth rate which was twice as high as the Organisation for Economic Co-operation and Development countries’ average. Even in the aftermath of the worst global economic and financial crisis, BRICS countries, particularly India and China – though they also witnessed slower growth rates owing to weakening global demand – maintained their robust growth rates and emerged as engines of economic growth, which helped global economic recovery. In the recovery process, there are lessons for the BRICS economies.
Since 2006, BRICS has evolved a number of mechanisms of cooperation. BRICS foreign ministers and finance ministers meet regularly. Regular meetings of the ministers of agriculture, trade and health are held to explore new avenues of cooperation. BRICS high representatives responsible for national security have met to exchange views on a range of security-related issues of mutual interest. A meeting of BRICS speakers was also held on the sidelines of the G-20 Speakers’ Meeting in Seoul in May 2011. Other BRICS tracks include meetings on friendship cities, statistical authorities and competition authorities. BRICS development banks are also cooperating with each other with the aim of increasing intra-BRICS trade and investment flows. BRICS countries are also engaged in discussion on swap arrangements among the BRICS national currencies as well as reserve pooling arrangements. Three sectoral forums – BRICS Think-Tanks, Business Forum and Financial Forum – have also been set up. These meet prior to a summit and provide inputs into the summit agenda.
India has committed itself to further strengthening of the BRICS cooperation framework. The BRICS Delhi Action Plan, annexed to the Delhi Declaration issued by the leaders at the fourth Summit in New Delhi in March 2012, laid down the broad contours of cooperation under India’s chairmanship of BRICS. It provided an enabling framework for cooperation in identified areas.
India’s initiative relating to a new BRICS–led development bank, for mobilising resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, is a crucial initiative that has attracted wide attention. The bank’s role would be to supplement the efforts of existing mechanisms such as the World Bank (WB) Group and other multilateral development banks. BRICS finance ministers and technical experts are exploring the feasibility and viability of this idea.
In the run-up to the fourth BRICS Summit in Delhi in March 2012, India hosted the first meeting of an Economic Research Group to bring economic content of BRICS cooperation into sharper focus. The Prime Minister of India, Dr Manmohan Singh, proposed at the fourth Summit in New Delhi that in view of common challenges presented by urbanisation for all BRICS countries, we should encourage sharing of experience in areas such as urban water supply and sanitation, waste management, storm water drainage, urban planning, urban transport and energy-efficient buildings. Pursuant to this suggestion, India hosted the first BRICS Urban Infrastructure Forum in New Delhi on 1 February 2013, which facilitated sharing of experiences on water supply and sanitation, effective solid waste management for improved environment and urban transport.
India coordinated a BRICS study with special focus on synergies and complementarities, which was released at the Delhi Summit. This was initiated at the suggestion of Prime Minister Dr Manmohan Singh at the first Summit in Yekaterinburg, Russia, in June 2009. A mention must also be made of the two agreements – a Master Agreement on Extending Credit Facility in Local Currencies and a BRICS Multilateral Letter of Credit Confirmation Facility Agreement – signed by the BRICS development banks at the fourth Summit. These are enabling instruments to reduce trade transaction costs and thus significantly promote intra-BRICS trade.
BRICS Track-II engagement among the leading think-tanks of the five countries was formalised by India in their first meeting in New Delhi in May 2009, before the first Summit in Yekaterinburg, Russia, in June 2009. The lead Indian Think-Tank, the Observer Research Foundation, in consultation with its BRICS counterpart think-tanks, has worked on the “Long-Term Vision for BRICS” for[BDM:DCD1] the fifth Summit in Durban in March 2013.
A number of BRICS activities/meetings have been held under India’s chairmanship since the fourth New Delhi Summit in March 2012. BRICS foreign ministers met on the sidelines of the United Nations General Assembly in New York in September 2012. BRICS trade ministers met in Puerta Vallarta, Mexico, in April 2012 on the margins of G20 Trade Ministers’ Meeting. BRICS health ministers and BRICS high representatives responsible for national security met in New Delhi on 10 and 11 January 2013. Other meetings include Meetings of Finance Ministers and Central Bank Governors on the sidelines of G20 meetings/other multilateral (WB/IMF) meetings; two meetings of CGETI (Contact Group on Economic and Trade Issues); a preparatory meeting of experts on agro-products and food security issues and the second Meeting of Agriculture Expert Working Group; BRICS Agriculture Experts on Climate Change and Food Security; the second BRICS Senior Officials’ Meeting on Science and Technology; and the second BRICS Friendship Cities and Local Governments Cooperation Forum in 2012 in Mumbai. India will host the third meeting of BRICS Competition Authorities in November 2013 and the BRICS competition authorities have held regular biennial meetings since their first meeting in Russia in 2009.
BRICS serves as a useful platform for consultation, coordination and cooperation on issues of mutual interest to all five constituents in an environment of mutual trust and understanding. It has facilitated the evolution of convergent positions on many global issues such as reform of international financial institutions , support for a democratic and multipolar world order, the World Trade Organisation, sustainable development, and certain regional and political issues.
BRICS countries are together working in an environment wherein supply-side constraints, including the challenges of the global economic slowdown, volatility in financial flows and food and energy security are prevailing trends. Maintaining the pace of high economic growth and reconciling developmental needs with the imperatives of sustainability and inclusiveness, are major challenges for BRICS countries.
The BRICS process is relatively new. It is exploring new forms of cooperation. We wish to strengthen cooperation under BRICS in a gradual manner; consolidating on the existing areas and simultaneously exploring new areas. Our objective is to project BRICS as a serious and effective grouping in the global discourse.
India looks forward to the fifth Summit in Durban in March 2013, where the responsibility of Chairmanship of BRICS passes from India to South Africa. The Durban Summit will be a historic opportunity for the BRICS leaders to review progress so far and lay down a future roadmap for more intense cooperation.