Economy

BRICS and Global Governance

BRICS – an acronym coined by then chairman of Goldman Sachs Jim O Neill as conglomerate of five major fast growing economies – Brazil, Russia, India, China and South Africa – reflects a collaboration by shared identity as emerging economies. The BRIC countries, as the grouping was initially known in the September 2006, admitted South Africa as a member to the union in December 2010. The potential in the nations of the member countries is a contingency to expand and develop economies as compared to other multilateral organizations. To set forth, nearly 50% of the world population and 22% of the world Gross Domestic Product is comprised of BRICS nations. BRICS play an important role in development assistance and potential partners in developing the world. The BRICS nations may have different visions of the group’s role and what it may mean to each of them but overall it ties to reason that any agreed upon agenda can best be realized if BRICS develops a coherent and sustained framework for continuous engagement.

The role of BRICS in international development cooperation is significantly and rapidly changing. Over the last decade, BRICS have increased their financial as well as technical assistance and established distinct ways and means of economic cooperation through South- South Cooperation (SSC) with Low Income Countries (LIC). BRICS are challenging western donors by hoping for more political influences. The impact of BIRCS on Low Income Countries through Trade, Foreign Direct Investment and development financing are significant. The growth rate of exports and imports has increased. One reason for the increase in trade export and import values are complementary trade structures providing overlap between BRICS demand and LIC supply. There is much for BRICS to achieve, from promoting global trade growth to enhancing transparency of trade agreements. In order to achieve this, BRICS must share knowledge and unify their stance to ensure their voice is loud and clear. Worldwide Foreign Direct Investment flows have increased incredibly. A number of positive impacts of FDI to developing countries can be identified, such as improvement of infrastructure and energy supply as well as trade and general market incentives. BRICS contribution to international development financing has increased substantially. Development financing usually comes within a package of grants, concessional and non-concessional loans and trade and investment arrangements. The idea of South South Cooperation is based on solidarity, shared experiences and self-reliance of the south. Thereby BRICS role is not just limited to financial assistance, but also extends to geostrategic and economic considerations. These ties have helped lessening the effects of financial crisis on LICs and contributed to economic development. The EU should include BRICS and other emerging donors in an exchange of ideas on basic principles and effectiveness of development cooperation. Thereby a certain amount of flexibility and openness is needed. Individual ideas of BRICS can be included in a constructive way although the risk remains that some BRICS might use their SSC – strategy to undermine EU policies

Another major role of BRICS is in creating a stable operating framework which leads to cooperation and collaboration in areas like medicine, healthcare, agriculture, water management and design and construction practices. The BRICS nations have several common health challenges: communicable and non-communicable diseases, inequitable access to health services, growing health care costs, substantial private spending on health care and large private health sectors .According to one of Bulletin of the World Health Organization, over the last few years , BRICS have undertaken substantial health system reforms that have been designed to improve service use, quality and financial protection, with the ultimate goal of achieving universal health coverage. These health reforms represent an important attempt to translate the growing wealth of BRICS into better health. A predominant reliance on public financing is a necessary condition for the achievement of universal health coverage. Health reforms have given BRICS government prominent roles in the health sector, particularly in financing health care. The enhanced cooperation in sports could also provide avenues for improving cultural understanding. BRICS need to be included in effectiveness and development strategy dialogues. Above this, poverty reduction remains the most important goals. The BRICS nations are well positioned to take a leading role in helping to achieve the goal of eradicating hunger and poverty. Together they produce more than one-third of global cereal production. Achieving agricultural growth would also require investments in research and development, and the BRICS countries could play a leading role in this, as all the five countries have strong agricultural research systems that are working on many of the challenges faced by developing countries, such as feeding a growing population in a sustainable way, according to FAO.

One of the main priorities of BRICS is to fight against terrorism. As in the current world, the global threat of terrorism is constantly changing, unpredictable and ever increasing, the BRICS agenda stresses the need to combat terrorism in all its manifestation. Together the BRICS can fight terrorism and the spread of international terror organizations. The BRICS nations should unite to fight terrorist groups in accordance with the principles of international law. They are also acting together on important issue of Cyber security and cooperate on e-commerce, intellectual property rights, Education and urbanization. Stronger collaboration between BRICS economies have made major strides in building better quality education systems and accelerated progress in education. One of the key conclusions of the reports is that BRICS have made effective use of innovative policies to improve the quality of education and for expansion of technical and vocational training and higher education. For example, Brazil has built one of the most comprehensive assessment systems in the world where a combination of data, such as school enrollment and completion rates- is used to help set targets for improvements and drive reform. The roll-out of India’s new law requiring companies to spend 2% of their profits on corporate social responsibility activities will be of interest to all governments looking at ways to fund higher levels of education and skills development. BRICS play a major role in education roadmap by bringing millions into school, establishing centers of world class learning, driving innovation and sharing expertise and knowledge. By engaging in global partnership for education, the nations have played a strong role in Education For All (EFA) coordinated by UNESCO.

BRICS started out with a lot of promise and the successes far overshadowed their weakness. BRICS is acting as a link between good governance, democracy, human rights and development financing on one side and trade ties to the developing world on the other side. BRICS are not among the most prosperous countries according to per capita income. However through their strong economic dynamics as well as territorial and demographic dimensions BRICS are influencing global economic development to a great extent. The BRICS have set an example by voicing their strong commitment to major international efforts, such as tackling climate change and addressing non-proliferation of nuclear weapons. To reiterate BRICS can collectively showcase the demands of the developing world and play a major role in international business, global economy, world politics, foreign policy, global health, education and agriculture. Globalization has become an important source of global growth and political influence thereby accounting to two- third of emerging market GDP .The gains of globalization have the best chance to industrial revolution and set their minds on development through cooperation .Drawing the inference, the role of BRICS in advancing economic globalization in the past decade with the spirit of openness, co-operation, and mutual benefit is welcomed and is leading to success of the multilateral league.

-Sindhu Rani (Freelancer)

Picture Credits: AP



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