- The recent BRICS summit in Johannesburg, South Africa, which witnessed more than a doubling of its original membership of five major emerging economies, has led to exaggerated expectations of the grouping’s rising influence on the global economy and on the restructuring of global governance regimes.
- This article will discuss the various reasons due to which many countries want to join BRICS and also the impact it would have on India.
- The predecessor of BRICS (Brazil, Russia, India, China, and South Africa) was BRIC (Brazil, Russia, India, and China) established by Goldman Sachs in 2006.
- BRIC was the acronym for the four countries, which were deemed to be at a similar stage of newly advanced economic development.
- Behind BRIC was the idea that China and India will, by 2050, be the world’s dominant suppliers of manufactured goods, while Brazil and Russia will become dominant as suppliers of raw materials.
- With the induction of South Africa in December 2010, BRIC became BRICS whose original aim was the establishment of an equitable, democratic and multi-polar world order.
- The BRICS mechanism aims to promote peace, security, development and cooperation.
- It also aims at contributing significantly to the development of humanity and establishing a more equitable and fairer world.
- The BRICS brings together five of the largest developing countries in the world—Brazil, Russia, India, China, and South Africa and represents 41 percent of the global population, 24 percent of the global GDP and 16 percent of the global trade.
- Several countries, including Argentina, Egypt, Indonesia, the UAE, Saudi Arabia, and others, are willing to join the bloc.
- BRICS is considering expanding its membership, and a growing number of countries, mostly from the global South, have expressed interest in joining.
- Several countries including the United Arab Emirates, Saudi Arabia, Argentina, Iran, Egypt, Bahrain, Indonesia, and Kazakhstan have shown their willingness to join the BRICS.
- As per reports, more than 40 nations have indicated an interest in joining the bloc of major developing economies.
- Earlier in June, representatives from Iran, Saudi Arabia, the United Arab Emirates, Cuba, the Democratic Republic of Congo, Comoros, Gabon, and Kazakhstan attended a meeting in Cape Town for so-called “Friends of BRICS” talks. Egypt, Argentina, Bangladesh, Guinea-Bissau, and Indonesia participated virtually.
The Need for Expansion
- Many countries of the Global South are showing such an unusual interest in BRICS because of their desire to hedge in an increasingly uncertain world with shifting political and security equations.
- An expansion of the BRICS bloc is under consideration since potential candidates – from Iran to Argentina – see one thing in common: a desire to level a global playing field.
- This is lacking because of the wealthy West’s domination of international bodies, such as the United Nations, the International Monetary Fund or the World Bank.
- The list of grievances is long:
- Abusive trade practices.
- Punishing sanctions regimes.
- Perceived neglect of the development needs of poorer nations.
- Amid widespread dissatisfaction with the prevailing world order, the pledge of BRICS nations – currently Brazil, Russia, India, China and South Africa – to make the grouping a leading champion of the “Global South”has, found resonance.
Benefits of the BRICS Expansion plan
- Here are some of the benefits of the BRICS Expansion plan and launching of BRICS currency:
Increased Economic Cooperation:
- The BRICS countries are working together to increase their economic cooperation.
- This could lead to increased trade, investment, and development.
Reduced reliance on the US dollar:
- The BRICS countries are trying to reduce their reliance on the US dollar.
- This could give them more control over their own economies and reduce their vulnerability to US economic policies.
Increased influence in the Global Economy:
- The BRICS countries are working to increase their influence in the global economy. This could lead to increased trade, investment, and development for these countries.
- When we look at the broader aspect the BRICS Expansion plan and launching of a common currency are ambitious projects. However, they could have a significant impact on the global economy.
- If successful, these projects could lead to increased economic cooperation, reduced reliance on the US dollar, and increased influence for the BRICS countries in the global economy.
Benefits specific to India
Here are some ways in which India could benefit from the expansion of BRICS and the launch of a new BRICS currency:
Reduced dependence on the US dollar:
- India is currently heavily dependent on the US dollar for its foreign trade and currency reserves.
- This makes India vulnerable to fluctuations in the value of the dollar, which can have a negative impact on India’s economy.
- A BRICS currency would provide India with an alternative to the dollar, which would reduce its dependence on the US and make its economy more stable.
Increased trade and investment:
- A BRICS currency would make it easier for India to trade with other BRICS countries.
- This could lead to increased trade and investment between India and other BRICS countries, which would boost India’s economy.
Reduced political pressure from the US
- The US has a history of using its financial power to exert political pressure on other countries.
- For example, the US has imposed sanctions on countries that do not cooperate with its sanctions on Iran.
- A BRICS currency would reduce India’s vulnerability to this type of political pressure from the US.
- Overall, the expansion of BRICS and the launch of a new BRICS currency could have a number of positive benefits for India. These benefits include reduced dependence on the US dollar, increased trade and investment, and reduced political pressure from the US.
- For India, a policy of participating in multiple groupings, which helps address its now multi-faceted interests and aspirations, has proved to be a sound one.
- An expanded BRICS would expand India’s diplomatic options and help in smoothing the rough edges of an increasingly polarized world.