BRICS emerges as a strong geopolitical and geoeconomic entity
The recent Joint Declaration of BRICS marks a pivotal moment in the group's evolution from a coalition of emerging economies to a significant geopolitical and geoeconomic force. With the expansion to include five new members and eleven partner countries, BRICS now represents nearly half the world's population and accounts for 40% of global economic output. This transformation not only signals its growing clout but also underscores its intent to reshape the global order in favour of the Global South.
Entitled 'Strengthening Global South Cooperation for More Inclusive and Sustainable Governance,' the declaration emphasised BRICS's commitment to multilateralism, international law, and equitable global governance. It reflects a growing confidence and a clear pushback against Western dominance in global institutions. Once perceived as a non-Western alliance, BRICS is now positioning itself as the voice of emerging markets and developing countries (EMDCs), firmly rooted in the priorities of the Global South. PM Modi has aptly called for redefining the acronym BRICS so as not to indicate the initials of the five core members but to convey a shared functional purpose of 'Building Resilience and Innovation for Cooperation and Sustainability.' This captures the group's evolving identity.
A significant aspect of the Joint Declaration was its open criticism of indiscriminate use of tariffs and proliferation of trade-restrictive actions- moves largely attributed to Western economic policies. It also condemned the attack on Iran and called for a two-state solution to the Israel-Palestinian conflict, but did not follow the Iranian line on Israel. This assertiveness reflects BRICS's increasing willingness to challenge the status quo, advocating for a fairer and more inclusive trade system. Its call for reform of global financial institutions like the World Bank and the IMF, long seen as instruments of the West, further illustrates this shift.
The group's stress on multilateralism and international law was aimed at ensuring increased participation of the Global South in global decision-making processes and structures. It perceives 'the Global South as a driver of positive change.' It called for strengthening efforts to promote dialogue and consultations in pursuit of more just and equitable global governance, and of mutually beneficial relations among nations.
On climate change, the group stressed that developed countries must step up with more grant-based, concessional finance, separate from existing aid, to help developing nations meet their climate goals without sacrificing poverty reduction and development priorities. The declaration covered the need for reforming the international financial architecture and stressed to enhance cooperation on all pillars of the United Nations Framework Convention on Climate Change (UNFCCC). This stance rightly insists that climate responsibilities must not come at the expense of development and poverty alleviation. It is a reminder that climate justice and equity are inseparable.
On terrorism, the Joint Declaration expressed 'strong condemnation of any acts of terrorism as criminal and unjustifiable, regardless of their motivation, whenever, wherever and by whomsoever committed.' It condemned in the strongest terms the terrorist attack in Jammu and Kashmir on 22 April 2025, during which 26 people were killed and many more injured, while reaffirming its commitment to combating terrorism in all its forms and manifestations, including the cross-border movement of terrorists, terrorism financing and safe havens- a notable move for a diverse group with differing views on counterterrorism.
Prime Minister Modi's strong remarks, indirectly aimed at Pakistan and China, highlighted the need for action against cross-border terrorism and the obstruction of sanctions against listed terrorists. While BRICS avoided the logjam on countering terrorism, unlike what happened at the Shanghai Cooperation Organisation (SCO), China's reluctance to support this issue would remain problematic.
Diplomatically, the summit showcased BRICS's ability to bridge internal divides and issue a coherent and unified statement, no small feat for a grouping with such varying national interests. Its handling of the Israel-Palestine issue, calling for a two-state solution while not aligning completely with Iran, exemplifies the group's growing maturity in international diplomacy.
In sum, the 17th Summit of BRICS indicates its transformation into a strong platform for the Global South. Its expansion has strengthened its legitimacy, and its assertive tone on global economic and political issues reflects a newfound confidence. If it can manage its differences, particularly on terrorism, it is poised to emerge as a credible counterweight to the West-led global governance system. The road ahead will be complex and difficult, but the message from Brazil is unmistakable: BRICS is no longer just watching from the sidelines. It is going to play an important role in managing global affairs.
Facebook Twitter Linkedin Email Disclaimer
Views expressed above are the author's own.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
18 minutes ago
- Time of India
'Trump weaponising dollar, BRICS not afraid': Lavrov dares US President over 100% tariff threat
Russian Foreign Minister Sergey Lavrov hit back at US President Donald Trump's warnings against BRICS, declaring that the bloc 'cannot be stopped' and is 'not afraid.' Lavrov said the global shift away from the US dollar is well underway and irreversible. He accused Washington of using the dollar as a weapon and said many nations are now turning to alternative systems. Lavrov's strong remarks underscore growing tensions as BRICS expands and challenges US dominance in global finance. Show more Show less
Hindustan Times
2 hours ago
- Hindustan Times
Whatever happened to Brics common currency
Yet another Brics Summit has ended as a non-event. The joint declaration at Rio de Janeiro, despite its grandstanding about multilateralism and a rules-based international order, is more notable for its political posturing: it calls for Israel's withdrawal from Gaza and condemnation of Ukrainian attacks on Russian infrastructure. The fact that geopolitics now occupies more mind space than economics in Brics is evident from the near silence in the declaration on its once-flagship initiative — a Brics common currency. The focus has quietly shifted to a more modest, though still ambitious, goal of promoting trade and settlement in local currencies. Meanwhile, US President Donald Trump has threatened 10% additional tariffs on Brics countries for what he labels 'anti-American' policies. (And, on Monday, when the Shanghai Cooperation Organisation was meeting in Beijing, he threatened 100% tariffs on Russia and secondary sanctions on countries buying oil from Russia, among them India.) His frustration is not unfounded. The Brics effort to reduce reliance on the dollar directly challenges American economic dominance. The dollar's centrality in global finance gives the US a structural advantage. As the world's primary reserve currency, the dollar allows America to borrow more cheaply in global markets. The world's demand for dollar assets effectively provides the US with an endless supply of low-cost credit. For example, if you carry $100 in your pocket, you are in effect giving America an interest-free loan of $100. That is the essence of what former French finance minister (and later president) Valéry Giscard d'Estaing famously called America's 'exorbitant privilege'. That privilege goes beyond economics. It gives the US the unique power to weaponise the dollar, using financial systems like Swift and dollar-clearing banks to impose sanctions and exert political pressure. Brics's move toward de-dollarisation is, in part, a pushback against this power. Still, for all the motivation, a Brics common currency remains a difficult project. Unlike the eurozone whose members are geographically contiguous and share broadly similar political and economic institutions, Brics countries are scattered across continents, with stark differences in governance, development levels, GDP sizes, and strategic interests. Even assuming political will, formidable technical and institutional hurdles remain. A common currency requires a common interest rate. But how do you calibrate monetary policy that works at the same time for China and South Africa, or Brazil and India, given their vastly different growth and inflation dynamics? More critically, are these countries ready to cede monetary sovereignty and expose themselves to the risk that economic instability anywhere in the bloc could mean economic instability everywhere? An even more complex issue is the China factor. With China contributing roughly 70% of the bloc's combined GDP, any common currency arrangement will inevitably be dominated by Beijing. In trying to escape the hegemony of the dollar, would Brics willingly embrace the hegemony of China, an authoritarian state with questionable transparency, weak institutional checks, and limited commitment to the rule of law? While the common currency vision stalls, the motivation to break free from dollar dominance remains strong, and is growing. The biggest driver is trade. A large proportion of intra-Brics trade is still settled in dollars, adding avoidable transaction costs. Eliminating these costs by using local currencies could boost intra-Brics trade. There are also deeper concerns. Brics countries see dollar dependence as a source of systemic risk to their financial stability. The Global Financial Crisis (GFC) of 2008 was triggered by reckless risk-taking in the US housing and banking sector. Had this happened in an emerging economy, its currency would have collapsed. But the dollar, paradoxically, gained value during the crisis. Global capital, in search of safety, fled emerging markets and rushed into US assets, a phenomenon economists call the 'safe haven effect'. Ironically, it was emerging markets that paid the price for America's excesses. The GFC wasn't a one-off. The taper tantrum of 2013, the Covid-19 shock of 2020, and even recent US interest rate hikes have repeatedly exposed emerging economies to capital flight, currency volatility, and inflation — all collateral damage of an American centric global finance. Against this backdrop, Brics's pivot towards trade in local currencies seems pragmatic. While less radical than a common currency, it is a tangible step towards financial autonomy. For instance, if India and Bangladesh settle their bilateral trade in rupees and takas, both benefit by cutting out the dollar intermediation costs. However, local currency trade works best when bilateral trade is roughly balanced. But if the trade is lopsided, the arrangement falters. That's what happened with India-Russia trade. When Russia agreed to accept rupee payments for its oil exports, it quickly began accumulating rupee balances far beyond what it could spend on Indian goods. With no outlet for those rupees, Russia backed away from the deal. Can Brics still push ahead with local currency trade, especially under threat of punitive US tariffs? It's worth remembering that the dollar's status as a global reserve currency is not backed by any formal treaty. There's no international law obliging nations to use it. So under what legal basis can Trump, or indeed any American president, mandate Brics countries to stay within the dollar-based system? Yet, as we have seen over the last few months of Trump 2.0, US tariffs, no matter how whimsical, are hard to defy. This puts India in a delicate spot. As the US prepares to assume the presidency of the G20 next year, India will need to carefully navigate between supporting the Global South's push for a more multipolar financial system and maintaining stable relations with America, its most important strategic partner. Duvvuri Subbarao is a former governor of the Reserve Bank of India. The views expressed are personal.
Economic Times
2 hours ago
- Economic Times
India's Russian oil imports up slightly in January-June, data shows
India's oil imports from Russia rose marginally in the first half of this year, with private refiners Reliance Industries Ltd and Nayara Energy making almost half of the overall purchases from Moscow, according to data provided by sources. India, the world's third-largest oil importer and consumer, received about 1.75 million barrels per day of Russian oil in January-June this year, up 1% from a year ago, the data showed. The two private refiners have term deals to buy Russian oil, while state companies rely on purchases from the spot market. India's purchases of Russian oil sold at discounted rates surged after Western nations imposed sanctions and stopped buying oil from Moscow over its invasion of Ukraine in 2022. Earlier this week, U.S. President Donald Trump threatened sanctions on buyers of Russian exports unless Moscow agrees a peace deal within 50 days. Indian refiners expect that any move by Trump is unlikely to disrupt oil supplies but could wipe out the thinning discount on Russian crude, as traditional and new suppliers ramp up output, refinery officials told Reuters. In January-June, Russia continued to be the top supplier to India, accounting for about 35% of India's overall supplies, followed by Iraq, Saudi Arabia, and United Arab Emirates. The United States was the fifth-largest oil supplier to India, up from the sixth position it held a year earlier, the data showed. India plans to raise energy imports from the U.S. as it prepares for a trade deal with Washington to avoid stiff U.S. import tariffs. Overall, India's oil imports in January-June rose by 4.3% to about 5.2 million bpd, the data showed. In June, India's Russian oil imports rose 17.4% to about 2 million bpd from the previous month, dragging down the share of Middle Eastern producers and the Organization of the Petroleum Exporting Countries.
