BRICS

By /

Facts:

  • Jaipur Declaration: (Given below)
  • BRICS Migration conference – Sochi
  • India is pushing for Liberalised VISA regime for “Skilled Worker” among BRICS nations to promote business and economic interests.
  • BRICS to setup its own credit rating agency to challenge western hegemony in field of finance
 
Jaipur Declaration: By BRICS women parliamentarians
  • Strengthen strategic partnership between members on all three dimensions of sustainable development viz., economic growth, social inclusion and environmental protection.
  • Parliamentarians expressed concern over the climate change on ecological systems, biodiversity and as well as food security (i.e. food production).
  • Members will focus to work out integrated solutions to preserve and protect ecological systems and forests.
  • It also called upon international financial institutions (FIs) to extend support to developing and least developed countries.
  • The FIs should help developing and least developed countries gain easier access to new and affordable technologies as envisaged under UN Framework Convention on Climate Change (UNFCC) and the Paris Agreement.
  • Emphasized the need to inform, communicate and educate citizens about developmental schemes.
  • Emphasized on plans for incorporating gender concerns and greater involvement of women parliamentarians in integrating citizens in the development process.
 
BRICS Security Meet:
  • BRICS nations underscored the demand for an international legal order to deal with the threat of terrorism.
  • They agreed to intensify cooperation against terror groups like the Islamic State in West Asia and North Africa region (WANA).
  • Highlighted the growing demand for “peace building” in the violence-torn region and focused on finding a political solution to the “outstanding issues” in the WANA region.
  • Discuss counter-terrorism, energy security, cyber-security as well as other international and regional issues of common interest.
  • China wants BRICS countries to play a bigger role in international and regional security issues, step up cooperation and coordination on major issues concerning security and contribute to peace, prosperity and stability of the world.
  • NOTE: Question can be asked on BRICS role in International security or role against Terrorism
 
BRICS Goa Summit (8th BRICS Summit)
Theme : “Building Responsive, Inclusive and Collective Solutions”
Goa Declaration :
  • BRICS nations condemns terrorism in all its forms and stressed that there can be no justification for such acts.
  • International terrorism, especially the Islamic State (IS) is an unprecedented threat to international peace and security.
  • BRICS nations reaffirmed the commitment to increase effectiveness of the UN counter terrorism framework.
  • Need for adaptation of Comprehensive Convention on International Terrorism (CCIT) in the UN General Assembly.
  • Urgent need to reforms of the United Nations, including UN Security Council, to increase representation of developing countries.
  • Resolution of civil war in Syria, in accordance with the “legitimate aspirations of the people of Syria” and action against U.N.-designated terrorist groups like IS and Jabhat al-Nusra.
  • All nations must counter radicalism and block sources of financing international terrorism, dismantling terrorist bases and countering misuse of the Internet including social media.
  • Appreciated progress in implementation of Strategy for BRICS Economic Partnership and emphasise importance of BRICS Roadmap for Trade, Economic and Investment Cooperation until 2020.
  • Welcomed adoption of 2030 Agenda for Sustainable Development and its Sustainable Development Goals.
  • Reiterated determination to use all policy tools to achieve the goal of sustainable and inclusive growth.
  • The ninth BRICS Summit will be hosted by China in 2017.
  • Besides, first-ever BRICS-BIMSTEC Outreach Summit was also held on side-lines of 2016 BRICS Summit. Leaders from both forums planned to jointly explore possibilities of expanding ties between them on issues such as terrorism, economy, trade and connectivity
 
 
BRICS is a powerful financial and political voice in the emerging multipolar world that cannot be ignored? Critically discuss. (200 Words)
 
The importance of the BRICS as a powerful financial and political voice in the emerging multi-polar world that can be overlooked due to following main reasons: –
 
Economic :-
  1. Combined GDP, accounts for roughly 20% of the total gross world products and have a whopping $ 4 trillion in forex reserves,
  2. Are fastest growing economy. China expected to surpass the U.S in next few decades in terms of GDP and India is to the third largest country by gdp by 2030.
  3. Lucrative investments destinations in the world with cheap inputs and surplus labour; are major exporters boosted by well performing manufacturing sector and high growing service sectors.
  4. Emerging multilateral financial institutions like AIIB and BRICS Bank as future alternative to the Western dominated World Bank and IMF.
 
Political and military clout : China, Russia and India are the most powerful countries in the world by military strength after US with advance naval forces playing key role in maritime security, patrolling and securing strategic influence; have deep engagements with countries in Asia ,Africa and energy rich Middle East.
 
Demographic:
  1. Accounts for nearly 40% of the world population with huge number of people in working age group and most the people being young .
  2. Relatively young population carrying a great economic significance in term of availability of cheap and surplus labour and huge domestic consumer base.
 
However, there is certain factors that are impediment to the BRICS as rising political and financial voice:-
  1. NDB faces several challenges, including the ability of the bank to raise monetary funds from sovereign markets and the selection criteria for prioritization of projects
  2. There is ample indication that despite the standard reference in every Brics summit document that “China and Russia reiterate the importance they attach to Brazil, India and South Africa’s status and role in international affairs and support their aspirations to play a greater role in the UN”, the two permanent UNSC members do not see Council reforms as a priority now or in the foreseeable future.
  3. Equally, in areas where norms and institutions still do not exist, such as global governance of cyberspace, climate change and energy security (crucial issues for all Brics members), where there is greater prospect for the group to shape norms and build institutions, there is even less of a consensus. For instance, on cyberspace, while all Brics members agree on the need for a global governance architecture, they disagree on how this should be shaped. China and Russia are in favour of a multilateral negotiations within the UN system while the others support a multi-stakeholder model with a role for the government, the corporate sector and civil society.
 
Trust and Will power are the must ingredients for success of any alliance so to have a successful BRICS, member countries need to share and address their regional, national and international grievances then only a successful BRICS can be imagined.
 
 
What should be the primary objectives of the New Development Bank being established by BRICS countries and how these objectives should be achieved? Discuss. (200 Words)
 
BRICS development bank with $50 billion core capital seeks to create an alternative to world bank institutions, IMF and ADB. However, the development bank has some primary objectives ahead of it-
  1. Infrastructure funding— Asia requires additional $ 2 trillion of funding for infrastructure development. It will create jobs, boost growth and facilitate private investment contributing to overall human development.
  2. Democratic devolution— NDB should focus on bottom-up approach where individual countries will be granted capital assistance on the basis of their needs based on their own assessments.
  3. Poverty-alleviation—-Asia still has the largest section of population under poverty. The objective of NDB funding should be based on impact-projects that can create jobs, improve conditions of living and promote community assets.
  4. Mitigation and climate change—-Asia will have to promote sustainable development and NDB can incentivise carbon-neutral and disaster mitigation projects that will promote inclusive growth
 
These objectives can be attained in following way:
  1. Laying thrust on technology for all phases of project completion
  2. Encouraging youth to actively take part in the projects; this will also address the employment needs of a large section
  3. Authorizing Social Businesses with their non-profit and mission-mode approach to utilize the funds. They can help turn unemployed into entrepreneurs. For such initiatives, NDB can set up country-level social business funds as joint ventures with local partners.
 
In all the above objectives, NDB has to adopt a different model of cooperation and assistance. The funding should be on bankable projects. It should stress on the need for environment and social impact assessments. There should be a framework that can guide the actions of all stakeholders in projects. The mutual assistance and objective of democratic development by NDB will go a long way to address development deficit in Asia.
 
 
Do you think post the creation of China led Asian Infrastructure Investment Bank AIIB), the BRICS-led New Development Bank (NDB) has become irrelevant? Critically analyse. (200 Words)
 
Two new multilateral banks have started in the recent past – One is the BRICS backed New Development Bank (NDB) while the other is the Asian Infrastructure Investment Bank (AIIB).
  1. While the NDB was proposed earlier, it has been overtaken by AIIB, which has gotten a lot of countries on board and generated a great deal of enthusiasm. However, it would be fallacious to conclude that NDB has become irrelevant due to these reasons.
  2. NDB operates worldwide whereas AIIB is limited to only Asian continent. This is significant because NDB will provide a stand to developing countries of world in matters relating to quantitative easing, basel-3 norms, sustainable finances etc. This role is not expected by AIIB as a continent specific bank.
  3. AIIB has restricted its operation to infrastructure financing whereas NDB is going to provide finance to many developmental aspect apart from infrastructure such as urbanisation, poverty eradication, agriculture and rural development.
  4. NDB is a development finance institution and its business philosophy must be grounded in the political economy of development, not finance. The raison d’etre for its existence is to change the terms of discourse on development finance and to offer alternative ways to finance development challenges
  5. As defined in last aspect the area of operation (agriculture, rural development, infrastructure etc.) is wide in case of NDB so it would have knowledge based operations and working rather than traditional banking functions.
 
The NDB will have to raise its game and become a knowledge based development finance institution from the very start of his tenure. BRICS governments must refrain from interference and micromanagement in the bank, and allow the bank to develop into a knowledge-based development finance institution. If this happens then the NDB will, in the long run, be a far more significant creation than the AIIB.
 
In your opinion, how will the China-led Asian Infrastructure Investment Bank (AIIB) be different from IMF and World Bank? In the light of its stated objectives, critically examine how it would benefit global economy. (200 Words)
 
Examination of objectives of AIIB clearly indicate that it being primarily aimed at bridging the huge gap in infrastructure lending for Asian countries in such a way to make these ancillary to materializing larger Chinese dream of ‘One Road One belt’ project.
Hence, it does not envisage catering to the balance of payment requirements of member  countries as in case of IMF. Similarly, AIIB will not look after requirements of concessional, soft credits or financial grants for ambitious projects aimed on larger benefits of humanity across the globe like MDG goals, climate change, CDM or social sector projects.

Though the main thrust behind the establishment of AIIB is in advancing Chinese Economic and geopolitical interests, however the world economy has much to gain from this initiative in following ways:-
  • In aftermath of 2008 crisis, when economic slowdown and austerity measures are rampant, AIIB emerges as a ray of hope for much needed funding to third world and it will create stimuli to world economy for quick recovery as a whole
  • AIIB will ease the Global Scarcity of funding due to drying finances of IMF and WB and constraints imposed by new Basel norms on Banks globally through ways of new investments
  • Demands generated from Asian infrastructure projects will also boost supply from  developed world’s economies helping in expediting revival .
  • Removal of infrastructural bottlenecks of Asian countries will integrate hitherto underperforming regions and result will be net gain to the global economy
  • AIIB lending will materialize Chinese dream of ”one road, one belt” by integration of Asian economies .Being most developed economy of region, it holds vast potential of growth for China. However it will also open avenues for global investment as globalization will play as enabling factor here.
  • AIIB projects will lead to newly emerged Asian regions that will be next global destinations for manufacturing, industries and services thus acting as a value addition to the global economy.
  • At a time when PPP model in infrastructure is being considered as a failure worldwide given huge risks sovereign need to bear, AIIB comes as a boon for poor Asian nations who lack the same. AIIB will remove stagnancy of such economies & regions thus helping the world economy to realize its true potential.
 

 

 

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top