COSMOS ACADEMY FOR COMPETITIVE EXAMS, MULTAN 03045500009, 03347847802

COSMOS ACADEMY FOR COMPETITIVE EXAMS, MULTAN

CURRENT AFFAIRS (CSS 2024) WITH ZEESHAN ZAFFAR

BRICS Expansion: New Feature of Multi-polarity or Seeking an Alternate World Order

• Originally conceived as BRIC by Jim O'Neill, the grouping consisted of Brazil, Russia,
India, and China.
• Launch- It was launched by a meeting of the Foreign Ministers of Brazil, Russia, India
and China in 2006.
• BRIC turned into BRICS in 2010, with the entry of South Africa.

Evolution of BRICS Summit

The grouping was first informally formed during a meeting of the leaders of BRIC (Brazil,
Russia, India, and China) countries on the sidelines of the G8 Outreach Summit in
St.Petersburg, Russia, in 2006. Later that year, it was formalized during the 1st BRIC Foreign
Ministers' Meeting in New York.

• 2009: The first BRIC (BRICS minus South Africa) summit was held
in Yekaterinburg, Russia.
• 2010: South Africa was accepted as a full member, and the group became BRICS.
• 2011: South Africa attended its first BRICS summit in China.
• 2014: The Fortaleza Declaration was adopted at the 6th BRICS Summit, and it marked
the establishment of the New Development Bank (NDB).
• 2015: The Ufa Declaration of BRICS was adopted at the 7th BRICS Summit held in
Ufa, Russia. It covers a range of topics, including global governance, international
security, and economic cooperation.
• 2021: The 13th BRICS Summit was held under India’s Chairship (virtual summit). It
was the third time that India hosted the BRICS Summit after 2012 and 2016.
• 2022: The Beijing Declaration was adopted at the 14th BRICS Summit, where it was
declared that the BRICS countries support talks between Russia and Ukraine.
o Also, cooperation in the fight against COVID-19, digital transformation,
resilience and stability of industrial and supply chains, and low-carbon
development.
• Current Members- Brazil, Russia, India, China and South Africa.
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• Chair- Chaired by member countries in rotational basis.

o South Africa was the chair for 2023.
• First summit- It was held in Yekaterinburg in 2009.
• Significance: 18% Global Trade, 23% GDP I.e 21 Trillion $,42% Population
• BRICS main Cooperation Area: Finance, Health, Technology, Security, Business,
• Why BRICS

Agenda of the BRICS

The regular annual summit and deliberation of BRICS has considerably widened over the years
to encompass topical global issues such as:

• International terrorism
• Climate change
• Food and energy security
• International economic and financial situation
• Reform of the Bretton Woods Institutions
• Trade protectionism and the WTO

Functioning of BRICS

Relations between BRICS partners are built on the UN Charter, generally recognised principles
and norms of international law, and the following principles: openness, pragmatism, solidarity,
non-bloc nature, and neutrality with regard to third parties.
COSMOS ACADEMY FOR COMPETITIVE EXAMS, MULTAN 03045500009, 03347847802

• In accordance with the acronym B-R-I-C-S, the members take turns serving as the
forum's chairman on an annual basis.
• BRICS work is based on action plans approved during annual summits since 2010.

Initiatives of BRICS

The BRICS countries have come together to deliberate on important initiatives under the three
major pillars:

Political and Security Cooperation

To enhance cooperation and dialogue on issues of global and regional security and developments
in the global political space for peace, security, and prosperity. Priorities under this pillar are the
reform of the multilateral system and Counterterrorism cooperation.

BRICS National Security Advisors’ meeting:

• An important component of the BRICS Political and Security Pillar of cooperation.

• Deliberations on security issues such as counter-terrorism, cyber security, peace and
stability, transnational organised crime, as well as the national security of BRICS
countries.

Economic and Financial Cooperation

To promote economic growth and development for mutual prosperity through the expansion of
intra-BRICS cooperation in sectors such as trade, agriculture, infrastructure, small and
medium enterprises, energy, finance and banking.

Contingent Reserve Arrangement (CRA):

• It is a financial mechanism to protect against global liquidity pressures.

• CRA was established in 2015 to provide financial support to member countries that face
balance of payments difficulties due to short-term liquidity pressures.
• The legal basis for the Establishment was signed at Fortaleza, Brazil, in 2014.
• The CRA's total lending capacity is $100 billion.

New Development Bank (NDB):

• NDB is a multilateral development bank established by BRICS with the purpose of

mobilising resources for infrastructure and sustainable development projects in emerging
markets and developing countries (EMDCs).
• The Agreement was signed during the BRICS Summit held in Fortaleza in 2014, and the
Bank started operations in 2015.
• Headquarters: Shanghai, China, with regional offices in South Africa and Brazil.
COSMOS ACADEMY FOR COMPETITIVE EXAMS, MULTAN 03045500009, 03347847802

• Apart from the founding members, Bangladesh and United Arab Emirates, Egypt, and
Uruguay are the new members. The membership is open to members of the United
Nations.
• The voting power of each member shall equal its subscribed shares in the capital.
• However, the share of the BRICS nations can never be less than 55% of the voting
power. Also, none of the countries will have veto power.
• NDB has so far committed $32.8 billion to 96 infrastructure and sustainable development
projects.

BRICS Payment System:

• The BRICS nations are working towards establishing a payment system that can serve as
a substitute for the SWIFT payment system.
• It is considered an alternative to the dollar-dominated payment system to reduce the
dependence on the dollar-based system.

15th BRICS Summit 2023

The 15th BRICS Summit was held in Johannesburg, South Africa, from 22-24 August 2023.

The important highlights of the Summit are as follows:

• Theme: "BRICS and Africa: Partnership for Mutually Accelerated Growth,

Sustainable Development and Inclusive Multilateralism".
• Gifts from India: The PM of India gifted Bidri Surahi, Nagaland Shawl, and Gond
Paintings to BRICS leaders.
• BRICS-Africa Outreach and BRICS Plus Dialogue: India participated in the BRICS-
Africa Outreach and BRICS Plus Dialogue:
• Participation: The meeting included leaders from BRICS countries along with guest
countries from Africa, Asia, and Latin America.
• Invitation for International Initiatives: India extended invitations for countries to join
international initiatives like the International Solar Alliance, One Sun One World One
Grid, Coalition for Disaster Resilient Infrastructure, One Earth One Health, Big Cat
Alliance, and Global Centre for Traditional Medicine.
• Joint Statement: Leaders express support for India's G20 Presidency.
o Support for G20 Presidencies: Backed Brazil and South Africa's G20
Presidencies in 2024 and 2025, focusing on global South representation.
o Opposition to Unilateral Measures: Condemned unilateral coercive actions,
advocated inclusive multilateralism, and upheld international law.
o Global Governance Enhancement: Aimed to improve global governance
through agility, efficiency, representation, and democratic accountability.
o Human Rights Cooperation: Committed to cooperating on human rights under
equality and mutual respect principles within BRICS and international platforms.
o Agriculture and Food Security: Strived for fair agricultural trade, ending
hunger, sustainable agriculture, and resilient practices.
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o UN Reform: Supported comprehensive UN reform, including the Security

Council, for enhanced democracy, effectiveness, and developing country
representation.
o Peaceful Conflict Resolution: Committed to peaceful dispute resolution through
dialogue and inclusiveness while recognising women's participation in peace
processes.

ANALYSIS

• New world order- It aims to assert their position particularly in relation to the United
States and the European Union.
• Multipolar global order- It promotes the recognition of a multipolar global order with
economic and political balance.
• It aims to break away from organisations formed in the post-World War II era, such as
the World Bank and the International Monetary Fund.
• De-dollarization- BRICS account for 18% of the world trade, supports the increased use
of members' national currencies for trade and the introduction of a common payment
system in the long term.
• Global South- It helps in representation from voices of the ‘Global South’, a term used
to refer to countries that have not traditionally been at the centre of international agenda-
setting.
• Economic rise- In recent decades, India and China witness economic rise. The creation
of their own forums has been utilised as an alternative.
• Financial structure- New Development Bank (NDB), the Shanghai-headquartered
bank has since invested $30 billion in infrastructure development projects.

In Fortaleza declaration, New Development Bank was created in 2015 worth 100 bn
dollars.
COSMOS ACADEMY FOR COMPETITIVE EXAMS, MULTAN 03045500009, 03347847802

Expansion of BRICS

More than 40 countries have expressed interest in joining BRICS, and 22 have formally asked to
be admitted. Therefore, leaders of the BRICS in the 15th Summit have agreed on mechanisms
for considering new members.
COSMOS ACADEMY FOR COMPETITIVE EXAMS, MULTAN 03045500009, 03347847802

• First phase of expansion: The countries including Argentina, Egypt, Ethiopia, Iran,
Saudi Arabia, and the UAE have received invitations to join BRICS. This new
membership is set to take effect from January 1, 2024.
• Reasons for the BRICS expansion:
o China's strategic move for global influence.
o FOMO: Fear of missing out on a visible club.
o Limited options in other groups.
o Anti-western sentiment and Global South unity.

Challenges of BRICS Grouping

• Overlap with other groupings: There is a parallel grouping of democracies known as

IBSA (India, Brazil, and South Africa), which can lead to overlap in mandates and pose a
challenge for BRICS to manage
• Economic slowdown and trade disputes: The ongoing economic slowdown and trade
disputes among member states can impact the group's ability to achieve its objectives.

• Geopolitical tensions: The BRICS countries have different geopolitical interests and
have been involved in regional conflicts and disputes. For example, China's BRI, 'string
of pearls’, and developments at the Indo-China border have raised tensions with India.

• The dominance of three countries: The overwhelming influence of Russia, India

and China could potentially hinder the ability of other members, such as Brazil and
South Africa, to have a meaningful impact on the group's decisions and direction.

• Paradox of BRICS: Despite several achievements, it began to lose its sparkle. The group
may have lost its mojo, but numerous nations want to be admitted, thus showing the
paradox of BRICS.

BRICS Currency and De-Dollarization

• In the 15th Summit of BRICS, Brazil's President proposed the creation of a common
currency for BRICS nations to reduce vulnerability to dollar exchange rate fluctuations.
• Difference of opinion: While Brazil sees a common currency as a means of reducing
vulnerabilities and increasing payment options, other BRICS leaders have varying
opinions.
• Challenges of a BRICS currency include the need for banking and fiscal unions,
macroeconomic convergence, and trade imbalances.
• De-dollarization would require numerous global entities to independently adopt other
currenc ies.

De-dollarisation may be an aspiration of some BRICS countries

• The actual shift towards other currencies would require more time and effort.
COSMOS ACADEMY FOR COMPETITIVE EXAMS, MULTAN 03045500009, 03347847802

• Nearly $5 trillion is held in overseas central banks, including almost $1tr in the Bank of
China
• Likewise, global supply chains remain critical for the economic health of all countries
• The leading lights of the expanded BRICS are also members of G20
• Western countries are also inclined towards de-risking their economies rather than
decoupling from China.

Will an expanded BRICS enable the Global South to counter-balance the Western-
dominated world of politics, trade and finance?

• There is no denying that the rise of China, India and other Asian economies has
brightened prospects for the Global South to challenge Western dominance in the
prevailing world order
• An expanded BRICS, which represents a sizable percentage of the world’s population
and economic growth, seems better poised to represent the interests of the Global South.

What does BRICS Plus mean for Pakistan?

• This year, while over 30 other countries were invited to attend the summit, mostly from
the Global South, Pakistan was not
• Pakistan is an ardent supporter of multilateralism. If that be the case, it would make sense
for Pakistan to be a member of the expanded BRICS, which is a rising multilateral
organization within the Global South.
• Last Year Pakistan’s absence was noted at the high-level development dialogue on the
eve of the BRICS summit hosted by China.
o It would be safe to conclude that even if Pakistan had applied for BRICS
membership, India would have opposed it.
o Another factor that undermines the prospects of Pakistan joining BRICS is its
own dire economic situation, coupled with political instability, violent extremism
and weak law and order.
• There is no doubt that Pakistan is situated at the center of the expanded BRICS’
economic geography.
• Pakistan can, for instance, become a genuine hub connecting South Asia with Western
and Central Asia.
• However, for that to happen, Pakistan must first pull up its own economy and consider
opening its door to east-west connectivity, which would complement north-south
connectivity well.