Bridge for India, big tent for Global South, Pg13

Key Highlights:

• BRICS has evolved over two decades from a loose grouping to a formidable organization representing the Global South.
• It has benefited from the sustained commitment of leaders like Xi Jinping, Vladimir Putin, and Narendra Modi.
• The New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA) were game-changers, with NDB financing 120 sustainable infrastructure projects worth around $39 billion.
• Intra-BRICS trade has grown 13 times, from $84 billion in 2003 to $1.17 trillion in 2024, now accounting for over 20% of global trade.
• BRICS is actively developing mechanisms for trade in local currencies to reduce dependence on the US dollar.

Detailed Insights:

• BRICS offers states of the Global South a platform to voice concerns and chart common strategies amidst the faltering of traditional global governance institutions like the UN, WTO, World Bank, and IMF.
• The organization is heterogeneous, encompassing diverse political systems and economies, with China's economy being larger than the combined GDP of the other 10 states.
• BRICS is reformist and pluralist, identifying itself as non-Western rather than anti-Western, advocating for the democratisation of international institutions and a multipolar global order.
• The New Development Bank (NDB) provides loans without political conditionalities, unlike the IMF and World Bank, and has committed 30% of its financing in local currencies.
• The growth in intra-BRICS trade is driven by lower tariffs, resource complementarity, and the removal of supply-chain constraints among member states.
• Efforts towards de-dollarisation through local currency trade aim to reduce exposure to dollar liquidity crunches and US monetary policy shocks, though a common BRICS currency is unlikely in the near term.
• India aims to position itself as a leading voice of the Global South and a bridge between Western and developing economies through its engagement with BRICS.

Key Concepts Involved:

• Global South: A term referring to countries often characterized by developing economies, located primarily in Africa, Asia, and Latin America.
• New Development Bank (NDB): A multilateral development bank established by BRICS states to mobilize resources for infrastructure and sustainable development projects.
• Contingent Reserve Arrangement (CRA): A framework providing protection against global liquidity pressures for BRICS member states.
• De-dollarisation: The process of reducing the reliance on the US dollar as the primary currency for international trade and financial transactions.