What did the BRICS Summit in Kazan accomplish?
At least 30 more countries wish go join it, including NATO member Turkey. Thirteen countries were added as BRICS partner countries this year: Algeria, Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Nigeria, Turkey, Thailand, Uganda, Uzbekistan, and Vietnam.
By Aditi Bhaduri
The 16th BRICS summit in Kazan, Russia this year has been a greatly watched one across the world. It. Themed “Strengthening Multilateralism for Just Global Development and Security”, it came against the background of Russia’s intensifying war in Ukraine, the unprecedented sanctions imposed on it by the West amidst it’s diplomatic and political isolation by the western world. It is the largest diplomatic event the country has hosted since it’s war in Ukraine began in 2022. As such, the event was supposed to prove Russia’s and President Vladimir Putin ‘s diplomatic clout and hefty in the world.
BRICS, however, is bigger than that. Since its inception in 2006, it has usually been dismissed by the Western world as a talking shop. But the BRICS has continued to steadily grow. From 2009 when it comprised Brazil, Russia, India and China, it became BRICS in 2011 with the addition of South Africa.
This year in Kazan the BRICS+ already included nine member states. Egypt, Ethiopia, Iran and the United Arab Emirates joined this year and participated as full members. This was no mean feat, considering the BRICS is representative of the non-Western world. In the words of Viktoria Panov, chairperson of the Russian BRICS Expert Committee and vice-president of the Russian Higher School of Economics, the activities of the BRICS countries are not aimed at Western countries, but this organization of countries that makes its own decisions plays the role of architect in the new model of international relations.
The BRICS countries represent 45 percent ofthe world’s population and almost 25 percent of global GDP. The International Monetary Fund (IMF) expects a bigger share of growth over the next five years to come from BRICS economies like China, India, Russia and Brazil. Bloomberg recently reported that according to forecasts published this week based on purchasing power parity by the IMF, the expected contribution of Group of Seven members like the US, Germany and Japan was, on the other hand, revised down.
According to Bloomberg calculations using the new IMF forecasts, China will be the top contributor to global growth over the next five years, with its 22% share bigger than all G-7 countries combined, while India will be the other global growth giant.
Main Takeaways
The main takeaway from the Kazan summit was to strengthen multi-lateralism and global governance. “We reaffirm our commitment to the BRICS spirit of mutual respect and understanding, sovereign equality, solidarity, democracy, openness, inclusiveness, collaboration, and consensus,” the leaders stated. “As we build upon 16 years of BRICS Summits, we further commit ourselves to strengthening cooperation in the expanded BRICS under the three pillars of political and security, economic and financial, cultural and people-to-people cooperation and to enhancing our strategic partnership for the benefit of our people through the promotion of peace, a more representative, fairer international order, a reinvigorated and reformed multilateral system, sustainable development and inclusive growth.”
While pressing geopolitical and economic issues were discussed, including the Ukraine and the Middle East conflicts, a major takeaway was the commitment to “reform the current international financial architecture to meet the global financial challenges.” While the BR8CS agreed to strengthen the IMF, a key takeaway was strengthening trade and payments amongst the members in local currencies, and pledge to find quicker and easier cross-border payment system.
Russia has long been pushing for de-dollarization. Cut offfrom the international SWIFT payment mechanism, with billions of its foreign reserves in western financial institutions frozen, Russia has turned to local currencies for its foreign trade. With China, for instance, at least 70 percent of its trade is conducted in yuan. With India too Russia has been accepting rupee payments for its energy and other exports. India too has signed up for the settlement of trade in the Indian rupee with a number of countries like the UAE, Oman, its UPI payments system as well as the Rupay cards also functional in a number of countries.
Push towards more equitable financial system
Most countries in the world are wary of unilateral sanctions, which the Kazan Declaration also made a note of, and want to hedge themselves against any similar fallout in the future. This is what has pushed some major countries like the UAE, a close US ally, and Egypt, as well as Iran, another sanctioned country, to join the BRICS grouping.
While complete de-dollarization is not possible currently with a single BRICS currency, neither do countries like India dexire it, at Kazan, BRICS countries also pledged to integrate their economies by finding easier cross-border payment system, establishing a BRICS grains depository, and conducting feasibility studies for a BRICS Cross-Border Payment System and BRICS (Re)Insurance Company.Russia is also in talks with other BRICS members about creating an international precious metals exchange to ensure fair pricing and trade growth.
At least 30 more countries wish go join it, including NATO member Turkey. There is a hold on membership now, and another significant achievement at the Kazan summit was the induction of BRICS “partner members”. Thirteen countries were added as BRICS partner countries this year: Algeria, Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Nigeria, Turkey, Thailand, Uganda, Uzbekistan, and Vietnam.
All these countries, as emerging economies, want to tap into the huge trade and investment opportunities that BRICS provides, including the investment opportunities from the BRICS New Development Bank, which provides an alternative to the World Bank by financing sustainable development projects in countries of the Global South. Many of these countries are also energy powerhouses like Russia, the UAE, Iran, Algeria, Kazakhstan. Therefore, the BRICS can become a powerful energy block. The countries of the grouping also hold 20 percent of the world’s gold reserves with Russia and China leading the pack.
The expansion of the BRICS cannot be ignored. While the summit itself was, undoubtedly a diplomatic win for Russia, it is also a win for the non-Western world. India has done well to stay put, in spite of the apprehensions it has had over the years. The BRICS is here to stay, at least for the foreseeable future.
