Story Of The Week

A Decade of BRICS

“Trade is not about goods. Trade is about information. Goods sit in the warehouse until information moves them”

-Jack Ma

BRICS is an independent international organization that encourages commercial, political and cultural cooperation between the member countries. Emerging economies of Brazil, Russia, India, China and South Africa come together every year and discuss their bilateral and multilateral ties.

The 10th BRICS summit, the world was looking at Johannesburg, South Africa, host this year from 25th to 27th of July, a week after the birth anniversary of Nelson Mandela. Five member countries Brazil, Russia, India, China and South Africa were a part of it. The meet witnessed Geo-Political stalwarts like Narendra Modi, Vladimir Putin and Xi Jinping and others taking the dais.

The theme of this year’s meet was, BRICS in Africa: Collaboration for Inclusive Growth and Shared Prosperity in the 4th Industrial Revolution“.

Consequently, this year’s meet was painted in the hues of “4th Industrial Revolution”.

BRICS SUMMIT 2018

Source: iastoppers.com

The summit began with the Chinese President Xi Jinping talking about innovation, inclusive growth and multilateralism. He stressed the importance of cultural footprints and how BRICS members should set an example of the same to the rest of the world.

With China being currently at odds with the white house, the issue of trade war was inevitable to discuss. A rather surprising turn to the issue came when president Xi said, Trade wars should be rejected because there will be no winner from them”, who has been answering to the US’s whimsical trade barriers with unbreachable tariffs. Later in the day, the Chinese president urged the member countries to shun “protectionism”.

brics

26th of July came with a fresh breeze of optimism when Prime Minister Narendra Modi talked about the idea of 4th industrial Revolution. He envisioned India collaborating with the BRICS member nations and share best trade practices. He envisioned this Industrial Revolution as the 4th major revolution since the 18th century.

Modi was quoted as saying, “High skill but temporary work will be the new face of employment. There will be radical changes in the industrial production, design, and manufacturing”

Indian Prime Minister called out to schools and universities to redesign the curriculum to come inline with the vision. Modi also emphasized the importance of upskilling the workers and he believes that talent is more crucial than capital.

He congratulated member countries for bringing stability and growth. He remarked that apart from the trade and economy, entities like technology, tradition, culture, agriculture, environment, energy, sports are forming the fabric of international relations.

We were also reminded about one notable achievement of BRICS, that is the establishment of the New Development Bank. NDB has recently started to lend to member countries. The foundation of this bank was laid back in 2014. Since its formation, the bank has disbursed loans totaling $5.1 billion, with approvals amounting to $1.7 billion this year alone.

Modi also proposed the formation of BRICS Independent credit rating agency.

BRICS 2018

Source: www.theatlas.com

One of most awaited speeches of the summit was from the Russian President, Vladimir Putin. The political heavyweight iterated the importance of digitalization for the Russian economy. He talked about the flip sides off digitalization, whereby the emphasis was on the safety of business and its people. He further added, “We take necessary measures – legislative and other measures – in order to achieve a situation for the creation of a safe and reliable internet environment.”

Putin also took out time to praise the former South African President Nelson Mandela as the manifestation of equality, fairness, and openness.

An Indian-driven gold mining project in Siberia was hailed at the BRICS Summit as the first practical manifestation of the objectives of BRICS. The Kluchevskoye Gold Mining Project, initiated by India’s SUN Gold Ltd, is seen as the first private-public association working towards BRICS objectives.

South African President Cyril Ramaphosa was the host and a debutante at the BRICS summit. He talked about the challenges faced by multilateral trade associations, as bilateral agreements are on rising, which clearly violates WTO’S guidelines. He urged the BRICS member country to come together and strengthen their trade associations with each other. In the past 10 years, Africa has seen a growth rate of  2 to 3 percentage points above then the global GDP, with regional growth predicted to remain steady above 5 percent in 2018. He urged member countries to support foreign direct investment, make public investment in infrastructure and accelerates agricultural production.

He emphasized the power of unity amongst the member countries and called this decade of BRICS as “Golden Decade”.

Conclusion

The meet extended from 25th of July to the 27th of July. In these three days, the country leaders met behind the closed doors and also on the roundtables. The inter-country and intra summit dynamics were at play and countries discussed and collaborated with each other. Coalescing domestic interests with foreign policies remained at the heart of the summit. Where China defended its position against the US, India talked about the 4th industrial revolution and how to facilitate the same. Russia came forward talking about digitalization in the economy. Indo-Russian relations were celebrated and brought pride to the summit. However, the main talking points of the summit turned out to be:

  • The summit was held with the backdrop of the US-initiated trade war by which all the member countries are likely to get affected. The member countries resolved to strengthen trade relations with each other and bring stability. This can be achieved through reduced trade tariffs.
  • Formation of BRICS Credit Rating agency. India proposed to establish our own credit rating agency to create a stronghold in global business.
  • Bringing about the 4th industrial revolution. Countries agreed upon initiating an industrial revolution, through technology, better human resource, capital investments through lending and investments.
  • The onset of Global governance reform in organizations like IMF, WTO. The member countries are seeking to leverage their associations to tweak these bodies to their benefit. There have been numerous efforts to include a third African chair on the IMF board. South Africa pushed BRICS to support it in this issue.

Consequently, The BRICS leaders adopted the Johannesburg Declaration of the 10th BRICS Summit.

Other documents signed as part of the summit include:

  1. Memorandum of Cooperation in Environmental Protection
  2. Memorandum of Understanding on Partnership in Regional Aviation of the BRICS Countries
  3. Memorandum of Understanding on Joint Research in Distributed Ledger and Blockchain Technology in the Context of Developing the Digital Economy

The meet ended on an optimistic note. The countries collaborated and made quite a lot of promises and some agreements. BRICS reached a milestone by successfully creating NDB. Is this an answer to the west’s IMF? does the meet solidifies the respective financial standing? can these countries come together in spite of their own set of disagreements read as the “Doklam issue” between India and China? or the emerging closeness of Russia with the US? Can the multidimensional trade relations work on a unified goal?

Multilateral trade relations is a dwindling floor that can swing both ways.

Reference

  1. https://en.wikipedia.org/wiki/BRICS
  2. https://www.cnbcafrica.com/videos/2018/07/25/chinese-president-xi-jinping-addresses-10th-brics-summit/
  3. http://www.brics2018.org.za
  4. http://www.xinhuanet.com/english/2018-07/26/c_137347552.htm
  5. http://en.kremlin.ru/events/president/transcripts
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3 replies »

  1. Great article. Kindly add some notes at the end to elaborate a bit about some terms such as BLOCKCHAIN technology and Distributed Ledger.