What to expect at the 8th BRICS Summit in Goa
India is all set to host the 8th BRICS Summit on the October 15-16.
While the initial stages of the BRICS countries coming together did not yield much, the pace of developments has significantly picked up in recent years.
Here’s a look at what has happened at the previous BRICS summits, and what you could expect from this year's summit.
What is BRICS?
BRICS is the acronym for the five countries of Brazil, Russia, India, China and South Africa. Originally, the group did not include South Africa, which was only added in 2011.
The term BRIC was first used in 2001, by Jim O’Neill, then chairman of Goldman Sachs. O’Neill would, in a paper, argue the importance of the original BRIC countries for the future, based on the emergence of and potential for growth that those economies showed.
Brazil, Russia, India and China would formalise BRIC as an international association, starting with formal meetings between the foreign ministers of the countries in 2006. The next milestone would be in 2009, with the 1st BRIC summit taking place in Yekaterinburg, Russia.
South Africa would later be admitted into the group in 2010, with their first appearance at the summits in China’s 2011 Summit.
History of the summits
The first BRICS Summit in 2009 was held in the backdrop of the financial crisis affecting the world at that point. That was the main talking point of the first summit, along with a note of discontent in existing international financial institutions for not focusing enough on developing countries also being expressed.
The following two summits would share this common theme of discontent, as the 2010 Summit in Brazil would see an open expression of reforming the existing Bretton Woods system of international finance.
The BRICS countries would nevertheless show their support for the G20 countries in playing a prominent role in steering the economic leadership of the world. Another common developments in these initial summits were the plans of increased interactions between the various ministries, statistical institutions and development banks of the BRICS nations, as the BRICS countries sought further common goals to strive towards.
The 2012 Summit in New Delhi would see the first major institution coming to fruition from these summits. As BRICS countries continued their statements of discontent with the World Bank and IMF and the role that developing countries were accorded by them, the landmark New Development Bank was proposed by India, borne out of these frustrations.
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| The 2012 BRICS Summit in New Delhi would see the first major institution coming to fruition from these summits. (Photo: PTI) |
The following summits would see the details on the structure and functions of the New Development Bank being formalised. The 2014 Summit saw the New Development Bank being pledged $50 billion as initial subscribed capital and a structural framework being developed.
The bank aims to offer financial and technical assistance to sustainability and infrastructure projects. The geographical scope of the bank is still limited. Although the statements released by the bank indicate the aim to help the developing world, initial approved projects are limited to BRICS member states for now.
The bank has also announced its intention to work with other international organisations, with an MOU being signed with the Asian Development Bank already.
Matters such as health care, sustainability, climate change and a green economy were also talked about in detail at the more recent summits, but nothing concrete has emerged yet.
There have been other developments at the summits post 2012. For instance, the summit in Durban, South Africa in 2013 would see the establishment of the BRICS Business Council, consisting of 25 members, split equally amongst the five BRICS countries. These members represent the major sectors of the economy (manufacturing, finance, energy, infrastructure) of each country.
The 2015 Summit would see significant milestones being achieved as well. The signing of the MOU of the New Development Bank was completed, as the bank started its functions, with initial projects aimed to be approved in early 2016.
The summit would also see the initiation of the Contingent Reserve Agreement, a reserve fund to act guard against liquidity issues in cases of balance of payment issues for the BRICS countries. Proposals for the exploration of a joint BRICS trade and economic roadmap were also given as topics such as intellectual property rights, small and medium enterprises and healthcare were also discussed. Finally, an MOU for joint scientific research was also proposed.
What to expect this year?
The government of India has laid out a five point agenda for the 2016 BRICS Summit. Those five points are institution building, implementation, integrating, innovation and continuity.
Based on the agenda, the proposals and discussions from the 2015 Summit should be of high priority at the 2016 BRICS Summit, with the hammering out details and fleshing out the proposals into concrete resolutions being the goal.
Over the past year, in the run-up to the summit, there have been numerous meetings and workshops related, but not limited, to these proposals and discussions. As the countries move ahead on the path of institutionalising the BRICS as an organisation, these proposals should be at the forefront of the 2016 BRICS Summit.
The path that the landmark achievement of the BRICS summits, the New Development Bank, should proceed also fits with the agenda of institution building, implementation and integration of BRICS ideas.
The further strengthening of the New Development Bank would also be a priority of the 8th BRICS Summit hence, as work begins on the initial approved projects. Of further interest will be to see if there is any cooperation or partnership announced with China’s Asian Infrastructure Investment Bank, which has a much wider international scope, stretching even to Europe.
Trade should be of high priority at the summit as well. Russia’s trade and economy has been struggling, in part due to the United States/European Union imposed sanctions. Brazil’s economy has been tanking due to the political turbulence that resulted in the impeachment of President Dilma Rousseff.
South Africa might end up seeing their credit rating being downgraded to junk status amidst controversy surrounding President Jacob Zuma and other politicians. China, while comparatively in a better condition, has also seen a slowing economic growth rate. And while India’s economy has been growing healthily of late, there is still room for ample improvement.
As such, all the BRICS countries are positioned to push for the fleshing out and laying out of concrete plans when it comes to the BRICS 2020 Economic Roadmap.
Finally, discussions on healthcare, sustainable growth, climate change and a shift to cleaner, greener energy have always featured at these summits. There is scope for proposals to be laid out on those pertinent issues as well.