New Delhi (Agency): Expansion of the BRICS and mutually accelerated trade top the agenda of the 15thBRICS Summit 2023 (August 22-24) in the backdrop of the internal and external challenges its members – Brazil, Russia, India, China, and South Africa are faced The summit , has created unprecedented global interests, as well as within the participating countries. India has much at stake, and also a key role to play.
Prime Minister of India Narendra Modi has already departed to participate in the summit to be held in Johannesburg in South Africa. In the first in person participation after the outbreak of COVID 19 pandemic, the president of Russia Vladimir Putin will not be attending, which itself marks the geopolitical tension in the backdrop.
He will not attend the summit because there is an International Criminal Court (ICC) warrant against him for waging war against Ukraine. Since South Africa is a member of ICC, the country is obliged to arrest him under international law, if he personally visits. It is why, Putin would be avoiding any embarrassment to South Africa and will participate through virtual mode.
Russian aggression on Ukraine has deepened global crisis. Europe and the United States have been against Russia and have even clamped sanctions against it. Tensions have also been growing between the United States and China. As for India, the country has serious border issues with China, and had to face even armed Chinese intrusion in recent times. It has good relations with Russia and even growing relations with the United States. It has placed India in a difficult situation to tread on with simultaneous balancing act.
The real challenge the countries of the group is facing is their diverse interests. Brazil, South Africa and India have been trying to have better relations with the West and the United States. These three countries also want better relationship with the geopolitical opposites China and Russia. It is a problematic situation that the BRICS need to overcome to help create a better world. The world is sharply divided and so the members of BRICS have to take into account their respective interests as also the group in general
Since the BRICS summit would be discussing mutual trade free from the dollar dominance, the United States and the G7 countries – Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States – and the European Union (EU) as a “non-enumerated member” would be keenly watching.
Though, BRICS has been seen as a potentially emerging new world order group against the current US-led global world order, both in terms of security and dollar domination in the global economy, it still seems a far-fetched idea in the present scenario. Moreover, the participating BRICS countries, especially China and India, need to overcome their serious differences endangering the very peace in the entire Asia region. Other member countries also have diverging economic and geopolitical interests.
Nevertheless, BRICS summit is one of the most important events of the day, since it is group of big economies comprising 41 per cent of the world population, 26 per cent of the GDP, and over 16 per cent share in the world trade. Its GDP is even larger than the GDP of G7 in purchasing power parity terms.
It is due to this economic attraction, about 40 countries have already shown their interest in joining this group, and hence expansion of BRICs is high on agenda for the summit. The world leaders would be discussing the issue and if they decide to allow other countries to become its members, they would need to decide on modalities and criteria for membership.
The most important issue, however, would be the acceleration of mutual trade. There has been dollar domination, that slows it down. It has already led to BRICS nations individually and collectively trying to reduce their dependence on the US currency chiefly through bilateral trade in their own currencies. Lately, the leaders of the nations of this group, particularly Russia and China, have been under growing concerns and fear that the United States may weaponise the dollar through sanctions. Russia has been already facing its challenge. BRICS leaders are therefore likely to discuss on some mechanism to unshackle their trade from the dollar dominance.
The trade by BRICS nations surged by 56 per cent to reach $422 billion in the past five years. In these transactions, New Development Bank, earlier known as BRICS Development Bank, will work as a medium for such transactions. India proposed the idea of setting up a bank at the 4th BRICS in 2012 held in Delhi. Importance of it lies in the fact that despite the combined economic strength of 26 per cent of global GDP, the bricks countries have only 15 per cent of the voting power at the International Monetary Fund (IMF).
The world is presently undergoing a great economic crisis and China is heading towards an economic meltdown. India will still be the fastest growing economy, and will tremendously benefit if the country plays its card well, within the BRICS and in relation to the US and Europe led global order. BRICS is likely to collectively dominate the world economy by 2050.
In the present geopolitical scenario India needs to help chalking out and independent path by avoiding the actions that may create unnecessary tensions with the US-Europe on the one hand and China-Russia on the other. India’s desperate priorities must be handled carefully for economic and political dividends. Diverging interests of the member countries will still be a challenge to overcome. (IPA Service)
By Dr. Gyan Pathak
