1

RESTRICTED

Introduction

1. The BRICS nations (Brazil, Russia, India, China and South Africa) are
considered as the new building blocks of the global economy. In the background of the
deceleration of the developed economies in terms of growth and economic expansion,
BRICS assumed greater significance and wider acceptance as emerging super powers.
The BRICS economy rose from 11 percent of global GDP in 1990 to 22 percent in 2017
and is poised to reach 40 percent by 2050. A research shows BRICS, which overtook
Japan in terms of Gross Domestic Product (GDP) by 2005, will cross the United States
(US) by 2018 and Group Seven (G7) by 2030. The rise of BRICS is described as “great
transformation”. “The relative importance of BRICS as an engine of new demand growth
and spending power may shift more dramatically and quickly than many aspects. Higher
growth in these economies could offset the impact of growing populations and slower
growth in today’s advanced economies.”

Sequence

2. The sequence of the presentation is as below:-

a. Brief History

b. BRICS Development Policies

c. Role of BRICS Countries

d. 8th Summit – India – 2016

e. 9th Summit – China – 2017

f. Development Corporation

g. USA vs BRICS

h. Conclusion

History

3. Brazil, Russia, India, China and South Africa (BRICS) are leading emerging
economies and political powers at the regional and international level. The acronym was
originally coined in 2001 to highlight the exceptional role of important emerging

RESTRICTED
 2
RESTRICTED

economies and only included Brazil, Russia, India and China (BRIC). It was pointed out
that high growth rates, economic potential and demographic development were going to
put BRIC further in a lead position and it was argued that their increased relevance
should also be reflected in their incorporation to the G7 (O’Neill 2011). The four
countries themselves started to meet as a group in 2006 and it was only in 2010 that
South Africa was invited to join the group, which was then referred as BRICS. Due to
their geographic and demographic dimensions, BRICS economies are influencing global
development, especially in Low Income Countries (LIC).They are promoting stability in
trade and investment and cushioning global recession.

BRICS Charter

4. During their rise, BRIC remained stable and intensified economic cooperation
linkages with other development countries. Among the group of emerging economies,
BRIC are playing a crucial,role in global economy. Three main aspects are underlining
the relevance of BRICS as character in development cooperation:

a. The outstanding size of their economies.

b. Strong growth rates, leading to increasing significance in world economy.
c. The demand for a stronger political voice in international governance
structures, which corresponds to their economic status (cf. O’Neill 2001,
Orgaz et.al. 2011).

BRICS Development Policies

5. South-South cooperation (SSC) has been institutionalized in all BRICS and turns
out to be an important challenge for international development strategies of the EU
since south-south dynamics seem to be out of reach. But, if awareness of SSC is
improved, it can also be reflected in European Union (EU) relations with BRICS. From
the BRICS’ perspective, SSC has three important dimensions (Orgaz et al. 2011):

a. Political dimension: to create spaces for autonomous discussion,

independent of Organization for Economic Cooperation and Development
(OECD).

RESTRICTED
 3
RESTRICTED

b. Economic dimension: Trade, financing and (Official Development

Assistance) ODA.
c. Technical dimension: Exchange of expertise and technology know-how.

Analysis and roles of BRICS countries

6. BRICS countries represents 42% (almost half of the) population of the world.
Quarter of landmass of the world. Also the 5th as per combined GDP. Its GDP is $15.8
trillion dollars. Whereas US GDP is $16.7 Trillion. BRICS also provided with new
development bank to compete with (International Monetary Fund) IMF and World Bank
without any influence of western economies. Some says they will take G7 economy by
2027 other have suggestion that they will achieve this target by 2050 (atlantic.com).

Role of Brazil

7. Brazil is rich in oil and iron and in future by 2020 it will be 6th largest economy of
the world by overtaking UK. Brazil’s regional engagement and foreign investments in
infrastructure and the mining sector are not only to be seen as development cooperation
but also as outcomes of economic self-interest. On a political level, Brazil wants to
increase its visibility on the international floor, for instance by using partnerships to
lobby for a permanent seat in the UN Security Council (John de Sousa 2010: 1).

Role of Russia

8. Russia has seen economic difficulty, decline in population, recent sanction has
isolated Russia. Russia’s position among the BRICS differs from that of the other
countries, mainly due to its 20th century history. Russia is not a traditional development
country but belongs to the so called transitional countries. Today’s self-perception is still
very much influenced by the former world power status, of which large military spending
and personnel are still prevailing burdens.

Role of India

9. India expansion in terms of middle class and urbanization. It has fastest

development of urban areas as 10 out of 30 fastest urban cities are in India. Even

RESTRICTED
 4
RESTRICTED

though economic growth and future perspectives are raising hopes for India’s own
development, in 2005 more than 40 % of the population were living on less than USD
1.25 / day. Within BRICS, India is by far the leading receiver of Official Development
Assistance (ODA) which amounted to USD 2.5 billion in 2009 (Walz/Ramachandran).

Role of China.

10. Among BRICS china is forefront as in 2013 they pass $4 trillion mark in trade and
passes USA. China GDP is estimated to $24 trillion in 2020 and will give tough time to
USA. Without China, the BRICS are a toothless tiger. Not only is China the second
largest economy worldwide in terms of total GDP but also one of the fastest growing,
having 8-12 % real growth rates for eleven consecutive years now. Not surprisingly,
today China is also the biggest and most influential actor among BRICS concerning
international development cooperation.

11. China is constantly increasing its development aid efforts in terms of total
spending and institutionalization of structures. At the same time, China up to now
remains a recipient of western ODA and is very eager on keeping the “development
country” status (Leal-Arcas 2008: 257).

Role of South Africa

12. South Africa is added to BRIC by 2010 despite having the significantly lower
population and economy than any of the other. However South Africa is the strongest
African economy and quick hold on continent for China and India. Despite they have
strong growth many have said it will unsustainable for South Africa as the resources are
depleting and also sabotages the ability to grow. The Department of International
Relations and Cooperation (DIRCO) is responsible for South Africa’s foreign policy,
including development assistance, which still is primarily Afro-centric.

13. South Africa has yet to create the sustained levels of high economic growth, job
creation and improvements in living standards that have characterized BRIC
development, it can be expected that its role in international forums and SSC will
continue to strengthen in the following decades. However slowly, the government is

RESTRICTED
 5
RESTRICTED

focusing on current strategies, official policies and multilateral participation both within
and outside the UN to strengthen its role as a donor and leader in regional peace and
integration.

8th summit - 2016 Summit in India – Goa (15-16 Oct)

14. Following are the brief points for 8th Summit:-

a. Youth as a bridge for intra BRICS exchange. People to people connect

to develop country.
b. BRICS – energy efficiency. Deliberate work plan on development of
cooperation in energy saving and energy efficiency.
c. Urban Development. Challenges faced by cities and emergence of new
urban spaces and rapid urbanization.
d. BRICS – Drug control. Narco terrorism and money laundering. Making
youth indulges in drugs and activities which will ruin lives of young
generation. Black money and funding to terrorism organization.
e. BRICS – Friendship. Urban policy and planning. Development of urban
cities and developed cities.
f. BRICS – Employment. New ways of employment may be introduced.
Labor and employment rate may be increased.
g. BRICS – Policy planning. New idea sharing and how one country is
helpful to other countries.
h. BRICS – Women empowerment.
i. BRICS – film festival. Cultural activities will be shared. “THITI”.
j. BRICS – Minister for disaster management. Climate change and
industrial revolution change creates different disaster.
k. Convention on tourism. For cooperation among people of all countries
l. Wellness workshop. Research may be increased.
9th Summit 4 September 2017 Xiamen

15. Following are the brief point discusses and published in lieu of 9th Summit:-

a. Theme of BRICS to have stronger Partnership for a Brighter Future.

RESTRICTED
 6
RESTRICTED

b. Overarching objective and desire for peace, security, development and

cooperation that brought BRICS countries 10 years ago.
c. Working together for a more just, equitable, fair, democratic and
representative international political and economic order.
d. Satisfaction from the many fruitful results of our cooperation, including
establishing the New Development Bank (NDB) and the Contingent
Reserve Arrangement (CRA), formulating the Strategy for BRICS
Economic Partnership, strengthening political and security cooperation
including through Meetings of BRICS High Representatives for Security
Issues and Foreign Ministers Meetings, and deepening the traditional ties
of friendship amongst our peoples.

Trade as BRICS cooperation

16. The BRIC-group (the following data excludes South Africa) is showing some
remarkable trends in its foreign trade figures. The growth rate of exports was 13.3 % in
the mid 1990ies and 49.8 % ten years later; growth of imports was 13.2 % and 47.7 %,
respectively. With these remarkable growth rates, large parts of the GDP growth of
these countries were induced by trade. The export share of GDP was 9.2 % in 1980 and
26.6 % in 2009, while the import share increased from 11.3 % to 20.4 % in the same
period (Orgaz et al. 2011: 22).

Increase in Foreign Direct Investment (FDI)

17. Worldwide FDI flows from BRICS have increased incredibly during the last
decade. Starting from less than USD 10 billion until 2002 they amount to USD 146
billion only eight years later. According published statistics show a steadily growing
tendency in outward FDI for all BRICS, despite a decline in 2009 due to the financial
crisis during which especially Brazil suffered from a recession. However, this is about
the only similarity to be found. South Africa’s share in total numbers is rather negligible,
Brazil and India account for about 10 % each while China and Russia claim more than
75 % of total BRICS’ FDI in 2010 (cf. table 2).

RESTRICTED
 7
RESTRICTED

BRICS Development Financing

18. Overall, the sharp increase of development financing by BRICS, which is very
often intertwined with trade and FDI arrangements, is mainly due to Chinese
engagement. Therefore, BRICS financing is often channeled in infrastructure financing,
which generally has been seen as complementary with aid from traditional donors.
Nevertheless, some aspects of development financing from emerging donors, such as
transparency on the conditions of these packaged deals, tied aid or impacts on debt
sustainability, should be watched closely.

The Impact of BRICS Development Cooperation

19. Following are the major development cooperation among BRICS countries that
are core features summit:-

a. Economic growth and development. By and large, there are

remarkable spillovers and positive impacts through BRICS’ engagement,
especially regarding trade. Trade, FDI and development financing have
not only contributed to LICs’ economic development but also lessened the
effects of the recent financial crisis on LICs. However, many LICs still rely
too much on exports of primary commodities and are in need of
diversification and improved technologies for their industries.
b. Debt sustainability. Although not yet problematic, it is
certainly important to observe BRICS’ financing, its social and economic
returns and possible debt sustainability issues in LICs in the future.
However, it can also be seen, that the debt sustainability framework could
turn out to be a toothless tiger if it is not used as guidance by all
development partners on both sides. This implies that the EU should not
only engage in capacity strengthening of debt and project management as
well as governance issues in LICs but also engage in a political dialogue
with BRICS (and other non-OECD development partners) to come to
common terms of needs-based development financing within a commonly
designed debt sustainability framework.

RESTRICTED
 8
RESTRICTED

Conclusion

20. BRICS are not among the most prosperous countries according to per capita
income. India has only recently moved from LIC to MIC status and all BRICS are facing
serious disparity and poverty challenges themselves. However, through their strong
economic dynamics as well as territorial and demographic dimensions BRICS are
influencing global economic development to a great extent.

21. Reflecting their increasing relevance, BRICS have started to constitute a

strategic alliance with institutionalized meetings on ministerial and presidential level.
Although a primary objective is to gain influence in institutions of global governance,
their strategy is based on multilateral soft balancing and SSC. This has considerable
impact on the international aid-architecture and needs to be taken seriously in EU
development policies. Over dominance of China’s economy in BRICS create a political
cloud and gives veto power to China on several BRICS issues. In fact China’s economy
alone is large as compared to rest of countries in BRICS. There are many expectations
from these countries in future to become world leaders.

RESTRICTED