BRICS Expansion

BRICS Expansion

News: Recently, during the 15th BRICS Summit, leaders decided to expand the grouping and admit six new members.

Key Highlights of BRICS Summit:
• Theme - “BRICS and Africa - Partnership for mutually accelerated growth, sustainable development and inclusive multilateralism”.
• Johannesburg Declaration II - It emphasizes inclusive multilateralism, peaceful development, sustainable growth, and people-to-people exchanges.
• BRICS Expansion - Argentina, Ethiopia, Iran, Saudi Arabia, Egypt and the United Arab Emirates are included as a new member in BRICS grouping. They will formally become members on Jan. 1, 2024.

What is the need of Expansion?
• BRICS presented itself as a force for a “rebalancing” of the global order away from Western-dominated institutions.
• Global institutions reflect the power realities of their creation, and as power realities change, their efficacy becomes contested.
• Currently, Western countries dominate international bodies, such as the United Nations, the International Monetary Fund or the World Bank. The five BRICS nations, with a combined GDP larger than the G7 (purchasing power parity terms), currently hold only 15% of the voting power at the IMF.

What is India’s interest in expansion of BRICS?
• Egypt - India and Egypt signed a strategic partnership earlier in the year and India has historically supported Egypt during Suez Canal crisis in 1956 and we have signed a Friendship Treaty in 1955.
• Argentina - India has had a strategic partnership with Argentina since 2019. For Argentina, access to the New Development Bank will help them overcome economic challenges it faces.
• Iran - India and Iran have had a strategic partnership since 2003. Iran remains a crucial partner due to its proximity to Central Asia and its borders with Afghanistan and Pakistan.
• UAE - In 2017, India and the UAE upgraded their relationship to a “Comprehensive Strategic Partnership.” In 2021, India participated in a quadrilateral meeting alongside the UAE, which has since evolved into the ‘i2u2’ grouping.
• Saudi Arabia – India has a strategic partnership with Saudi Arabia.
• Ethiopia - India has supported Ethiopia’s position at the UN on issues from the Tigray crisis to the controversy over the Grand Ethiopian Renaissance Dam.

Challenges in BRICS:
• New Development Bank has been sluggish in lending primarily after sanctions put against Russia.
• Several Geo-political confrontations has influenced the functioning of grouping. For example, India-China relation. Also, expansion of BRICS grouping will further add to the problems as Saudi-Iran have their own problems.
• BRICS operates through consensus, but increasing its members may make it more challenging to reach due to each country’s unique interests, priorities, and relationships.

Way Forward
• Strengthening the New Development Bank by bringing in more stakeholders and exploring the idea of a BRICS currency.
• BRICS expansion would bolster India’s push for UN reform, more representation of the global south and the expansion of the UN Security Council.