Determined to end the hegemony of rich Western nations in navigating global economic policies, the BRICS nations, on March 29, 2012, signed two key accords to promote trade among them in their local currencies and explore the possibility of setting up a development bank for mobilising resources for infrastructure and sustainable development projects.
The Master Agreement on Extending Credit Facility in Local Currency and the Multilateral Letter of Credit Confirmation Facility Agreement are being seen as a major step towards replacing the dollar as the main currency for trading amongst the five nations.
On the political side, there were hardly any surprises in the declaration as, contrary to apprehensions, the leaders of the five emerging economies arrived at common formulations on Syria, Iran and Afghanistan after a brief debate during their closed-door meeting. The BRICS’ stand on Syria and Iran will obviously not go down well with the Western nations, which have been on a collision course with these two countries.
On Iran, the declaration said the BRICS countries felt that the situation in the Islamic republic could not be allowed to escalate into a conflict, the disastrous consequences of which would be in no one’s interest. At the same time, they felt that Iran has a crucial role to play for the peaceful development and prosperity of a region of high political and economic relevance.
On Afghanistan, the BRICS countries supported the global community’s commitment to the war-ravaged nation, enunciated at the Bonn International Conference in December last year, to remain engaged over the transformation decade from 2015-2024.
The emphasis at the BRICS meet, however, was on economic and commercial cooperation among the five member-nations.
BRICS ministers target $500 bn trade by 2015
The BRICS (Brazil, Russia, India, China and South Africa) countries are exploring ways to substantially increase the intra-BRICS trade in the next couple of years from the current $230 billion. The trade ministers of the five countries, who met in New Delhi on March 28, 2012, just before the Summit, agreed on enhancing trade, including of high-value manufactured items. They also agreed to intra-BRICS cooperation, especially in the areas of customs cooperation, trade facilitation, investment promotion, SME cooperation and trade data collection.
Though the meeting was devoid of any major announcements or breakthroughs, the trade ministers agreed on a collective response on some global issues like the Eurozone crisis and the spike in oil prices.
According to Goldman Sachs, by 2050, the combined economies of BRICS could eclipse the combined economies of the current richest countries of the world.
In a joint statement, the business leaders of BRICS agreed that it is essential to improve the quality of trade by focusing on more value-added trade in all the three sectors, namely manufacturing, services and agriculture.
It was also necessary to capitalise on opportunities in sectors such as agriculture, energy, infrastructure, mining, healthcare and pharma, and information and communication technology.
BRICS together make up 43 per cent of the world’s population and hold a combined GDP of over $18 trillion.