STRENGTHENING BRICS: CHALLENGES AHEAD.

As Goldman Sachs economist Jim O Neil's paper mooted the idea of " Building Better Global Economic  BRIC in2001 and it became a reality in 2006 and later South Africa was admitted two years later and the five member emerging economies -Brazil, Russia India, China and South Africa became capable of  challenging the undemocratic inequities of global order and global institutional governance. In 2003 Gold man Sachs predicted that  the global map would significantly change due to these emerging economies combined strength and would out strip the western dominated order before 2039.According to Bloomberg economic estimate an expanded BRICS group would represent about half of global output by 2040.BRICS is infact more globally represented than UN Security Council and the G7 but less than G 20 which is dominated by the west that makes efficient functioning of BRICS very vital to global governance and world economy Governments of of BRICS countries have been meeting annually to discuss regional and multilateral issues at formal summits and devising measures to meet the challenges prevailing in the global economy and governance. 

The 15th BRICS summit held in Johannesburg recently in person since  2019 has attracted tremendous interest across the globe.Leaders were unanimous in striving for the emergence of a multipolar world order truly fair one based on international law and compliance. It will enrich and inspire work towards achieving a more humane and global society. They also pitched for a speedy expansion of BRICS to make global governance more equitable. Infact measures suggested include to develop, deepen and broaden economic cooperation among the member countries through trade agreement and particularly trade through national currencies.

 The geopolitical influence of BRICS can  be measured in terms of the share of BRICS in global GDP which has increased from 8% in 2001 to 26% . On the contrary the share of G7 the group of richest developed countries in  global GDP decreased from 65% to 43.7% in the same period and their share of global population is just around 10%.Another estimate showed that BRICS  group currently account for 41%.of global population 31.5% of global GDP on purchasing power parity basis and 16% of global trade. The relevance of this organization has been increasing particularly in the context of geo political conflicts comprising of the Russia Ukraine war and consequent sanctions imposed by US and Western allies against Russia including stoppage of SWIFT message facility for  financial transactions and existence of continuous US China trade tensions.The 15th BRICS  summit held  this week upheld the relevance and  potential of this organization as proved by the huge rush of aspiring countries willing  and eager to    join the group. Out of 22 countries who formally applied for membership in the grouping 6 new members were inducted four major players of West Asian region- Egypt, Iran,Saudi Arabia and UAE  apart from Ethiopia from Africa and Argentina from South America. After the induction of 6 new members the global share of BRICS +6 countries would further rise to 46.3% of global population 36.9% of GDP in ppp$ terms, exports 24.1% and value of share in crude oil exports to 39.4% of global trade. During its development BRICS acted both on ideas than ideologies and remained open and transparent. During  Russia Ukraine conflict and consequent sanctions, BRICS partners have invariably ensured Russia's economic and diplomatic  survival .

BRICS New Development Bank plays an important role in development of member countries as evidenced by funding of nearly 100 projects for infrastructure and sustainable development so far and instituting a Contingent Reserve Arrangement and other institutional mechanisms.NDB also planned to lend in BRICS members currencies to reduce reliance on US dollar. BRICS countries have also proved their dexterity to work together on practical initiatives to a great extent.It has been observed that BRICS economic block has strategically made an historic and revolutionary decision to abandon the  use of US Dollar for trade settlement which has got tremendous ramifications, as the BRICS strategy is to pool the use of local currencies. This is not about mere trading mechanism but about power dynamics asserting independence in a world of traditional giants.  The 15th Summit focused on both promotion of local currencies and the political expansion of the block.With countries like Saudi Arabia, Iran and UAE resorting to trade oil in local currencies the potential for oil sale in US dollar will shrink altogether .

However the lack of coherence and mutual trust among BRICS members remain challenge before India and similar minded countries.  The distrust between China and India and also between the newly inducted Iran,Saudi Arabia and UAE may likely to create issues to the BRICS group in future. The Main challenge will be to choose between a China centric world or west centric or balanced global order.China wants to create a new set of plurilateral institutions that minimize the post war multilateral order which exclude the western powers. While India must moderate the influence of China in non western forums it should also make sure not to isolate other countries in the global South who may see merit in China's efforts at expanding the membership of those forums. Attempts by China to over power the group  with its strategic assertion require a firm resistance. Similarly the idea of a common BRICS currency seems to be remote possibility in the absence of lack of strong local currencies and divergent economic conditions and performance of member countries. According to Jim O Neil while the idea of expansion of BRICS based on certain criteria is a welcome move the idea of  BRICS common currency is both premature and 'ridiculous' especially when sustained confrontation exists between two major players China and India.In any case the best course open to India is that it is better to be inside the group constantly making collective efforts for shared prospects for a democratic model of global governance in a multipolar world that attracts countries from  global South. Obviously if BRICS grouping is committed with optimum mortar for appropriate policies and programmes it can lead to a new international economic order.