ECONOMYNEXT – Ruchita Beri, a senior fellow at the Vivekananda International Foundation, opines that rather than moving away from the SWIFT System and introducing a common currency, BRICS could build a coalition around the Unified Payment Interface (UPI), with India offering the technology to the global south. It would, she says, be the answer to the contentious issue of a common currency for BRICS.
Participating in a web talk on “BRICS Summit on Kazan: India’s Agenda”, organised by the Friedrich Naumann Foundation, South Asia, on October 18, Beri opined that while the anti-West bloc would like to see dedolarization, the focus is more on digital infrastructure and the use of local currencies for trade between BRICS members.
Fellow panellist, Professor Eduardo Viola, a Senior Research Fellow at the Institute of Advanced Studies, University of Sao Paulo, Brazil agrees, stating that while founding members Russia and China would like a move away from the SWIFT system, Brazil, also a founder member is not for it.
The BRICS Summit took place in Kazan, Russia from October 22 -24, under the theme of “Strengthening Multilateralism for Equitable Global Development and Security.”
Since its launch in 2009, BRICS has accepted Egypt, Iran, Ethiopia, Saudi Arabia and the United Arab Emirates into its fold. Currently, there are more than 30 nations awaiting approval.
Addressing the Web Talk, Keynote Speaker, Professor of Economics, Dr Thomas Straubharr of the University of Hamburg, pointed out that the panelists would need to consider issues such as the strategic course the Kazan Summit should take, and whether the entrance of new members would weaken or strengthen BRICS.
Will BRICS offer an alternative to the old liberal world order, and would economic structures amongst member states be competitive or cooperative?
Currently, a quarter of the world’s GDP and 40 per cent of the world population falls within BRICS.
It is important to understand that BRICS seeks to reform rather than replace the global order says Beri, adding that it may remain a sub-set of multilateral system.
India, she says is pushing for the global south to have a bigger role, and places importance on giving a voice to African nations, ‘which have, for long, been excluded from multilateral institutions. ’
BRICS, says Viola, is ‘not the driver of a new world order, because, within it, there are deep contradictions.’
While Russia and China are autocratic powers and nations with similar systems are seeking membership, there is the possibility of democratic regimes being undermined, he cautions.
Panelist Dr Rishi Gupta, Assistant Director, Asia Society Policy Institute points out that BRICS which emerged as a counter to G7 will provide a voice to the global south.
It has, he says, the capacity for inclusiveness and open dialogue. And India ‘is well placed to advocate, mediate and encourage open dialogue to global challenges and to bridge bilateral differences.’
India could build on her success of the G20 presidency where she showcased her ability to ‘lead around diverse voices’ to be the mediator and foster unity. The diversity of each member country he points out, promotes inclusivity, and each having voting powers, allows for the empowerment of individual countries.
He notes however that while all of this provides India an opportunity to ‘re-strengthen leadership, it must also be open to the possibility of conflict for such a position with China, for instance.
The panelists also discussed the tensions between member countries; Iran and Saudi Arabi, Egypt and Ethiopia, India and China, and agreed that differences of opinions within BRICS are not new. It has survived this long, mostly because decisions are based on consensus, and its future success depends on continuing the trend.
There are also other issues of concern; Counter-terrorism amongst member countries and the priority for economic growth over decarbonization.
Even as bilateral tensions exist, Beri points to the need for a unified condemnation of terrorism and focussing on promoting multilateralism. BRICS has its own vision, agenda and priorities, and must not morph into an anti-west forum, which, Beri sees as a challenge that India would have to deal with.
The web talk was moderated by Jhanvi Tripathi, Associate Fellow, Observer Research Foundation. (Colombo/Oct25/2024)