Raisina Debates, BRICS, Sino-India, Vivan Marwah, Strategic Studies, Xiamen

Under the shadow of the great recession, leaders from four of the world’s fastest-growing large economies met in Ekaterinburg, Russia, in June 2009, to build resilience and insulate themselves from similar crises. At the time, this group, comprised of Brazil, Russia, India, and China, known as the ‘BRIC’ countries,  produced approximately 15 percent of the world’s gross domestic product.

Less than a decade later, these countries, having added South Africa to form BRICS, account for more than 30 percent of the global GDP and have steadily built on their partnership in order to exert greater influence on world affairs.

The five BRICS countries recently concluded their ninth annual summit in Xiamen, China, where they released a lengthy and detailed declaration highlighting their current areas of cooperation – from banking and monetary policy to agriculture and healthcare — while outlining future avenues of collaboration in information and communication technology, the labour market and disaster management, among others.

In an analysis of the 2009, 2016, and 2017 declarations adopted by the BRICS countries, a clear trend emerges: the bloc of emerging economies, which originally joined forces in order to calibrate a joint response to prevailing economic conditions, has transformed into a much larger institution seeking to exert greater dominance in geo-political affairs and challenge the Western-dominated international finance system.

Beginning 

When Brazil, Russia, India, and China came together in 2009, the world was plunged in the depths of a massive economic recession. Stock markets across the developing world tumbled, and foreign investment in emerging economies dried up. Policymakers in the four nations soon realised that their countries needed to reduce their reliance on the United States and its European allies, and sought to create a more democratic financial and monetary system, a geo-economic governance structure incorporating greater representation of emerging economies.

When they met in Ekaterinburg, they emphasised their commitment to reforming international financial institutions in order to reflect the changes in the world economy. In their declaration, they stated:

"The emerging and developing economies must have greater voice and representation in international financial institutions, and their heads and senior leadership should be appointed through an open, transparent, and merit-based selection process. We also believe that there is a strong need for a stable, predictable and more diversified international monetary system."

With these words, it became clear that the countries sought to create a new system and challenge the Western-dominated international finance system and its investment funds, rating agencies, and regulators that many blamed for the 2008 recession.

However, the four countries did not stop there. They laid the foundation for a partnership that would be much greater than calibrated monetary policy. Their communique called for the implementation of the Rio Declaration and its concepts of sustainable development; strengthening coordination to ensure energy stability and sustainability; collaborating efforts to provide humanitarian assistance and reducing the risks of natural disasters; and reforming the United Nations, so that India and Brazil could realise their aspirations to play a greater role in the multilateral organization. 

In the anarchic global order, it was perfectly rational for these countries to join forces. With their economic power, large populations, and potential for growth, they would find greater results in achieving their objectives as a collective group rather than individual actors. 

Goa Summit 

Seven years later, when the BRICS leaders met in Goa in October 2016, it became apparent that the seeds that were planted at Ekaterinburg had blossomed. The New Development Bank and Contingency Reserve Arrangement, which were not even mentioned in the 2009 declaration, had become full-fledged agreements and organisations.

With seed capital of $100 billion, the NDB became one of the world’s largest multilateral financial institutions. Soon after opening its doors, it approved set of loans mostly in renewable energy and sustainable development projects in BRICS countries. Thus, it serves as a vehicle to accelerate the priorities identified by the coalition in previous meetings.

By giving each country equal representation and ownership, the NDB offers an element of democracy not seen at the World Bank. Many criticise the World Bank for being excessively controlled by Western nations and for the conditions it imposes on projects, which are not always in the best interests of developing countries. The BRICS sought to change this with the NDB, which upholds their commitment to egalitarian governance models and allows developing countries to take the lead.

The NDB and CRA are perhaps most significant in that they empower the five countries with immense financial independence from the Bretton Woods institutions and the stability to prevent short-term liquidity pressures. The NDB’s initial capital gives it the potential to finance projects all across the developing world, and emerge as a possible rival to the World Bank.

Their 2016 declaration also placed significant emphasis on additional areas of cooperation between the five countries, with public health getting substantial attention. The Goa declaration reaffirmed the efforts made by BRICS Health Ministers to achieve the "90-90" HIV treatment target by 2020, and emphasised cooperation between BRICS countries to promote research and development in medicines to end epidemics and "facilitate access to safe, effective, quality and affordable essential medicines."

This was a strategic and pragmatic focus on public health. The World Health Organisation, one of the few multilateral bodies devoted to public health, was widely criticised for its response to the 2014 Ebola epidemic. Its sheer and tragic ineptitude in assisting the African countries dealing with Ebola made it evident to developing countries (and BRICS members in particular), that they need to create their own institutions to improve public health infrastructure and responses.

While the BRICS members were insulated from the Ebola epidemic, their emphasis on public health demonstrates their role as leaders of the developing world, and therefore, leaders of a new international order.

As the 21st century world order increasingly relies on information and communication technology (ICT), BRICS has made a concerted effort to pioneer new technology and prevent exploitation of ICTs by terrorists and other criminal actors. Furthermore, in order to generate progress on their shared goals of sustainable development and international peace and security, the Goa declaration also placed considerable weight on the expansion of cooperation in ICT. The statement pledges to "strengthen joint efforts to enhance security in the use of ICTs" and improve cooperation "between our technical, law enforcement, R&D and innovation in the field of ICTs and capacity building institutions."

Their effort to cooperate on creating new technology demonstrates a desire for new technological development to originate in the developing world, rather than the traditional Atlantic powers.

While the 2017 BRICS summit in Xiamen, China, has been unprecedented due to the naming of two Pakistan-based terrorist groups, Lashkar-e-Taiba and Jaish-e-Mohammed in the official declaration, the document also breaks ground in numerous other areas. The 2017 declaration goes further than previous statements detailing future cooperation between BRICS. It doubles down on the aforementioned ICT cooperation, an issue that is clearly important to all five members. The countries declare:

"We will enhance joint BRICS research, development and innovation in ICT including the Internet of Things, Cloud computing, Big Data, Data Analytics, Nanotechnology, Artificial Intelligence and 5G and their innovative applications to elevate the level of ICT infrastructure and connectivity in our countries. We will advocate the establishment of internationally applicable rules for security of ICT infrastructure, data protection and the Internet that can be widely accepted by all parties concerned, and jointly build a network that is safe and secure. We will increase investment of ICT, recognise the need to further increase investment in ICT Research and development, unleash the dynamics of innovation in producing goods and services. We support active collaboration in implementing the BRICS ICT Development Agenda and Action Plan."

As China and India are rapidly urbanising, with projects such as ‘Smart Cities’ gaining the personal attention of the Indian Prime Minister, the BRICS statement sheds light on how the five countries view ICT as an important tool to help them achieve a number of Sustainable Development Goals.

The Xiamen declaration also stresses the importance an open and inclusive international trading system.

As India seeks to bolster its manufacturing sector and Brazil and Russia strive to diversify their economies, a rules-based trading framework is increasingly important for the BRICS economies. Given this, the BRICS nations use strong language to highlight their opposition to protectionism, an issue of great importance to their host, President Xi Jinping, as anti-globalisation sentiments in the West pose a direct threat to China’s export-based economy.

Most of the 2017 declaration details inter-BRICS cooperation in a similar detailed manner. When evaluating the entire statement, it becomes clear that the BRICS alliance has moved beyond its beginnings as a geo-economic entente. The NDB and CRA enable it to challenge Western financial institutions and create economic stability. Additionally, the cooperation on creating public health infrastructure and streamlining disaster management responses enables BRICS to take a lead on issues important to the developing world. Finally, its focus on issues such as ICTs, artificial intelligence, and 5G technology, allow it to become a leader in pioneering new technology in the developing world, rather than the Western Hemisphere.

‘Rule takers’ to ‘rule makers’ 

In 2009, few would have predicted the immense scale of partnership between Brazil, Russia, India, China, and South Africa. A term colloquially coined by a Goldman Sachs economist in 2001 has become a reality. This group of nations seems determined to use its collaboration to create not just economic growth – but also enhance social welfare, produce better standards of living, and exert greater influence in world affairs. Cooperation between these five countries in areas ranging from women’s participation in technology to combatting terrorism, demonstrates that they are serious in consolidating their efforts and are committed to building BRICS into a serious institution.

In conclusion, it is important to remember that these countries share little in common with each other. They have different political, economic, and social structures, and some face significant bilateral tensions. However, their cooperation and alliance in the form of BRICS demonstrates their desire to challenge the Western-dominated international finance and geopolitical system. They are ready to put their issues aside and come together to fill what many are calling a power vacuum in the existing global governance architecture. It is clear that they seek to lead the developing world in the 21st century and are ready to transition from ‘rule takers’ to ‘rule makers.’

BRICS allows them to do exactly that.


The author is a Researcher at Observer Research Foundation.

The views expressed above belong to the author(s).

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