In such a fractious world, with two wars raging, one for close to five years and the other for more than six months, it is quite easy to be cynical about the Brics Summit scheduled in New Delhi over the weekend. After all, there is no dearth of groupings in the world.
We have the G-7 and G-20, for example, both of which count rich and powerful nations among their members, but cannot boast of much beyond a clubby air and odd go at policy coordination. So it is hard to argue that such groups are more than talk shops.
Yet, the theme of Brics’ 18th summit, ‘Building for Resilience, Innovation, Co-operation and Sustainability,’ holds relevance in a context of globally fraught geopolitics.
The group’s name is an offshoot of the term ‘Bric,’ coined by British economist Jim O’Neill and popularized by Goldman Sachs as shorthand for four vibrants markets: Brazil, Russia, India and China. That they banded together and were joined by South Africa—and later by Egypt, Ethiopia, Iran, Saudi Arabia, the UAE and Indonesia—testifies to the global need for a broad non-Western forum.
Today, Brics members account for nearly half the world’s people, about a quarter of all trade and 35-40% of its GDP (in purchasing power parity terms).
On paper, Brics is formidable. In practice, the early hope that it would emerge as a voice of the Global South to advance the interests of developing countries has faded. The World Bank, International Monetary Fund, United Nations and other institutions function like they always did, dominated by the West.
Lack of unity within Brics partly explains its blank score on big issues. Its two major-economy members, India and China, have diverse interests. No wonder O’Neill almost wrote it off in 2021, saying that “Brics have so far proven incapable of uniting as a meaningful global force.”
But the world order has undergone serious convulsions since then, and with China’s rise the story of this century so far, Brics could yet emerge as exactly that. The very fact that US President Donald Trump felt a need to warn of an extra 10% tariff on countries aligning with the allegedly “anti-American policies” of Brics reveals a clear threat perception.
Trump’s specific grouse, it seems, is with a Brics effort to ease mutual transactions that he suspects may seek to get around or supplant the dollar standard held in place by the Bretton Woods system.
At this juncture, however, a pragmatic link-up of digital currencies for cross-border payments is all that might be on the table. Reserve Bank of India Governor Sanjay Malhotra recently called it an “area of interest” as “we feel there is a lot of scope for reducing cost.”
Some members, notably China, appear to favour mBridge, an open platform. It just so happens that the US has no e-dollar on its launch-pad.
Meanwhile, Brics’ New Development Bank based in Shanghai is looking to step up funding of infrastructure projects in developing countries.
What global architecture Brics could shape remains in the realm of speculation. With the Western alliance fraying and the US at loggerheads with once-close allies, Brics may look from afar like a group awaiting a pivotal moment to exercise its clout. If so, some good may come of it.
However, with or without further expansion, this group must not end up as somebody’s vehicle rather than of countries the West wasn’t ready to grant their fair share of authority. Only then can a Brics agenda of global significance achieve a consensus.