Last updated on April 1, 2020
Editorial Brief: India is the world’s most investment-friendly economy, says PM Modi
Context: In the latest BRICS Summit 2019, Prime Minister Narendra Modi said that India is the world’s most “open and investment friendly” economy, as he seeked the favour of the BRICS business leaders and urged them to invest in the infrastructure development of the country.
BRICS countries account for 50 % of the world’s economic growth. Despite the recession in the world, BRICS countries accelerated economic development, brought millions out of poverty and achieved new breakthroughs in technology and innovation.
The 11th BRICS Summit will focus on building mechanisms for counter-terrorism cooperation and strengthen India’s ties with the world’s five major economies.
About the Origin and Evolution of BRICS Summit till now
The term ‘BRIC’ was coined by Jim O’Neill, at British economis who was then chairman of Goldman Sachs Asset Management, on November 30, 2001, to describe the four emerging economies of Brazil, Russia, India, and China.
On the basis of econometric analyses that projects that the four economies would individually and collectively occupy far greater economic space and become among the world’s largest economies in the next 50 years or so, it was agreed to expand BRIC to BRICS with the inclusion of South Africa at the BRICS Foreign Ministers’ meeting in September 2010 in New York city.
South Africa attended the 3rd BRICS Summit in Sanya on April 14, 2011. In 2018, leaders of the grouping commemorated the 10th anniversary of BRICS in Johannesburg.
During the 6th BRICS Summit in Fortaleza, Brazil (2014), an Agreement was signed between the leaders for establishing the New Development Bank (NDB).
The New Development Bank or the BRICS Development Bank, is a multilateral development bank which was established by the BRICS states (Brazil, Russia, India, China and South Africa).
The initial authorized capital of the bank is $100 billion which is divided into 1 million shares having a par value of $100,000 each. The initial subscribed capital of the NDB is $50 billion divided into paid-in shares ($10 billion) and callable shares ($40 billion). The initial subscribed capital of the bank was equally distributed among the founding members.
NDB is currently headquartered in BRICS Tower (former Oriental Financial Centre) in Shanghai, China. The first regional office of the NDB is in Johannesburg, South Africa.
What was the PM Modi’s stand at BRICS?
PM Modi said that India is a land of limitless opportunities, and has urged the business leaders of the BRICS nations to invest in India, particularly in its infrastructure development.
“India is the world’s most open and investment friendly economy due to political stability, predictable policy and business friendly reforms.
He also said that the BRICS nations (Brazil, Russia, India, China and South Africa) should also deliberate on mutual social security agreement.
Considering globally, BRICS countries together accounts for 42% of the world’s population, 1/3rd of the global GDP and around 17 per cent share of world trade.
What about focus on trade and digital economy?
India and the other BRICS economies are hoped to strengthen cooperation in digital economy, science, technology and innovation.
A BRICS MoU between Trade and Investment Promotion Agencies is expected to be signed at the conclusion of the summit besides the customary joint declaration that will lay out the future roadmap for cooperation among the five countries.
BRICS as a Voice of Developing Nations
As the western countries are raising challenges on issues ranging from World Trade Organisation to climate change, the developing countries are crippling under the onslaught of these policies.
In recent period, BRICS has emerged as the voice of developing countries, or the global south and playing a significant role in protecting the rights of developing countries.
India is actively pursuing its membership for United Nation Security Council (UNSC) and Nuclear Supplier Group (NSG).
Stand on Terrorism
One of the major focus of the BRICS summit this year will be on cooperation on countering terrorism. The 5 countries are supposed to “build mechanisms for counter-terrorism cooperation within the BRICS framework.”
In this years Summit, a decision has been taken by the BRICS joint working group on counter-terrorism to constitute 5 sub working groups on counter-terrorism in the following areas:
(i) Terrorist financing, (ii) Use of Internet for terrorist purposes, (iii) Countering radicalization, (iv) Issue of foreign terrorist fighters (v) Capacity-building.
Besides, India is also expected to be named the chair of the subgroup on use of internet for terrorist purposes. This year’s Summit will be an opportunity for India to lay the groundwork for hosting the 2021 Summit which has already been scheduled in India.
The last Summit took place in Goa in 2016.
The Idea of Common Payment System
The BRICS nations are in a favour of the idea of a Common Payment System. Russia and its BRICS peers have been looking for ways to decrease their dependence on the U.S. dollar and have advocated using their national currencies in mutual trade.
It is interesting to note that the dollar’s share in Russian foreign trade payments has fallen to 50% from 92% over a couple of years, while the share of Rouble has risen to 14% from 3%.
Further, the BRICS nations had also discussed the creation of a common cryptocurrency for mutual payments as the grouping was reducing the share of payments in the U.S. dollar.
What can be concluded from the 2019 BRICS Summit?
One of the major point that can be concluded is that there is a need of promotion of comprehensive development of all states both big and small by the BRICS and also the enhanced mutually beneficial cooperation among them on the basis of shared interests.
BRICS plays an important stabilising role in global affairs, as being one of the pillars of the emerging fairer polycentric world order.
The democratization of international issues i.e agreements on global agendas should be reached with the widest and equal participation of all stakeholders and be based on universally recognised legal norms.
Further, top priority should be given to the principle of respect for cultural and civilizational diversity of the world.
In this undulating era of world politics, BRICS is poised to contribute significantly in maintaining international stability and ensuring global economic growth by becoming a united centre of the multipolar world.
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