BRICS'14 summit: Rise of a New Empire

What is BRICS? About BRICS'14 summit? How it will affect India and the world ! 

BRAZIL, RUSSIA, INDIA, CHINA, SOUTH AFRICA

What is BRICS ?

BRICS stands for an acronym of 5 major emerging economies of the world, Brazil, Russia, India, China and South Africa, formed to build better global economic ties among all five nations, so that they can grow together and compete with various developed economies. The group was formed in 2008 and was initially coined as "BRIC", before the inclusion of South Africa. Officially South Africa was included on 24 Dec, 2010 and attended its first summit in 2011. Today BRICS accounts for 27 per cent of global GDP, 18 per cent of global trade. The term, "BRICS", was coined by economist Jim O'Neill in his publication, Building Better Global Economic BRICs.

BRICS'14 summit

It was the 6th BRICS summit, inaugurating the second cycle of BRICS summits, as one summit has already been hosted by each nation, hosted in Fortaleza, Brazil. The theme for this summit was "Inclusive Growth: Sustainable Solutions”, in order to simultaneously achieve growth, inclusiveness, protection and preservation among all the 5 nations.

• Leaders Participating in this summit were: 

1. Dilma Rousseff, President, Brazil
2. Vladimir Putin, President, Russia
3. Jacob Zuma, President, South Africa
4. Xi Jinping, President, China
5. Narendra Modi, Prime Minister, India

• Members of the USAN, Union of South American Nations, were invited as guests to the summit as they have been showing keen interest in joining the BRICS group.

• Fortaleza Declaration: This declaration consisted of 72 points which was formulated and signed by all the leaders representing their respective countries. To read all the 72 points one can refer to the Ministry of External Affair's website, However, few major points of the declaration have been enlisted below:

1. BRICS have strongly condemned terrorism in all its forms and manifestations, in the declaration, and stressed that there can be no justification for any acts of terror based on ideological, political or religious issues.
2. The declaration has several points regarding the acts of violence in Afghanistan, Iraq extending support to their governments.
3. BRICS have shared views and commitment to international law and to multilateralism.
4. BRICS warn to minimize negative spillovers of monetary policy from advanced economies.
5. BRICS want to raise their economic cooperation to a qualitatively new level, so that the members can develop inclusively.
6. BRICS announce the signing of an agreement to establish the New Development Bank.

• BRICS New Development Bank: BRICS nations launched a $100 billion development bank and a Currency Reserve Arrangement (CRA), marking their first remarkable step since the formation of BRICS group. Few features of the bank are as follows:

1. Indian will have the presidency of the bank for the next 6    years with headquarters in Shanghai, China.
2. India's presidency will be followed by Brazil and Russia and they will have a 5 year term each.
3. A CRA worth $100 billion will be formed, that will help countries to deal with short-term liquidity pressures, for which China will contribute the largest amount at $41 billion, followed by India, Russia and Brazil with $18 billion each and South Africa with $5 billion.

"The agreement towards setting up the BRICS New Development Bank is a significant step. I am happy the initiative announced in 2012 in Delhi has become a reality," Prime Minister of India, Mr. Narendra Modi said.
This summit and its credentials are being termed as the "Rise of a New Empire" due to the remarkable establishment of the New Development Bank. The European banks and the economy are going through a very bad phase in such conditions if three of the world's fastest growing economies, India, China and Brazil can make influential foreign ties and provide a healthy market for investors, then they can not only have a sustained business market but can reduce the dependency on EURO banks to a large extent.

Analysts say that Indian rupee can be the most used currency in the world within a decade, in such conditions forming a sustainable macroeconomic model can be very helpful in the inclusive growth of all the 5 nations as they constitute almost half of the world's population and carry one fifth of the world's trade.

The BRICS bank will be lending money from the common fund to developing countries who are otherwise completely dependent on funding agencies like the IMF(International Monetary Fund) and the World Bank, which are greatly dominated by the West. According to the declaration, "the purpose of the bank was to mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging and developing economies." Rousseff said, "It will help contain the volatility faced by diverse economies as a result of the tapering of the United States' policy of monetary expansion. It is a sign of the times, which demand reform of the International Monetory Fund (IMF)."

Now the success of the New Development Bank and the BRICS nations will highly depend upon their co-ordination, if they can form a sustainable economic model in order to provide a better market to the investors rather than falling in unnecessary border disputes with the fellow members.

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