WHY IN NEWS ?
- The 15th annual summit of the BRICS—a group comprising Brazil, Russia, India, China and South Africa will take place in Johannesburg next week.
- BRICS is an acronym that started as BRIC in 2001, coined by Jim O’Neill (a Goldman Sachs economist) for Brazil, China, India, and Russia.
- Later in 2010, South Africa was added to become BRICS.
- Goldman Sachs claimed that the global economy will be dominated by the four BRIC economies by 2050.
- The main reason for such a claim was that China, India, Brazil, Russia, and South Africa were ranked among the world’s fastest-growing and emerging market economies for years.
- The main comparative advantage of this group is their low labour costs, favourable demographics, and abundant natural resources at the time of the global commodities boom.
IMPORTANCE OF BRICS:
As the group represents:-
- Total combined area of 29.3% of the total land surface of the world
- 24% of global GDP
- 16% of world trade
- 41% of world population with 3.14 billion people
ROLE OF BRICS:
- The BRICS countries, from 2009 to 2014, agreed on economic and financial issues, including World Bank and IMF reforms.
- They agreed to undertake measures of mobilizing sufficient resources so that the IMF can strengthen its potential to combat all kinds of crisis.
- They also created the BRICS Interbank Cooperation Mechanism that provides Extending Credit Facility in Local Currency and the BRICS Exchanges Alliance.
- The BRICS nation offered a source of foreign expansion for firms and solid returns for institutional investors.
- They also focused on some regional issues, including the problems related to Libya, Syria, Afghanistan and Iran (their indigenous nuclear program).
BRICS also coordinated together in resolving:
- IMF reform
- The struggle against illicit drug trafficking
- The need, use, and development of technologies in information and communication
- The BRICS countries also sought to create favourable conditions for barrier-free trade.
ABOUT 15TH SUMMIT:
- South Africa will host the summit from Aug. 22-24 at the city’s Sandton Convention Centre.
- South African President Cyril Ramaphosa, President Xi Jinping of China, Brazil’s President Luiz Lula da Silva and Indian Prime Minister Narendra Modi are expected to attend the summit.
- Russian President Vladimir Putin will not attend in person due to a warrant for his arrest issued by the International Criminal Court for alleged war crimes in Ukraine.
- The most important and controversial issue the leaders are expected to discuss is BRICS expansion by adding new members, including the admission criteria and guiding principles.
- Other issues on the agenda include discussions on global geopolitics, trade and infrastructure development.
IMPORTANCE OF 15TH BRICS SUMMIT:
- This BRICS meet comes at an important geopolitical and geoeconomic moment.
- This is the first in-person summit since 2019 and the COVID-19 pandemic.
- This is also the first in-person meeting since the Russian invasion of Ukraine in 2022, an event that has cast a long shadow not only over global stability, but food, fertilizer and fuel (energy) security.
- This is also the first summit since Luiz Inácio Lula da Silva Lula returned to power in Brazil, who represents a more socialist, anti-western politics than his predecessor President Bolsonaro.
SYLLABUS: PRELIMS, CURRENT AFFAIRS