The presidents of the top five “emerging” economies, popularly known as BRICS, convened their own (virtual) summit on 23rd June, 2022 in Beijing before the heads of the world’s most “advanced” countries gathered on 26th June, 2022 in Germany for the annual G7 conference. All of these gatherings took place against the backdrop of the ‘special military operation’ of Russia in Ukraine, as well as what practically everyone refers to as the “reshaping of a new international order.” BRICS is evolving in a way that was never contemplated. The geopolitical rather than economic factors that drew the group together are evident in the strategic goals that China and Russia share.
The word “BRICS” was first used with a small “s” by a Goldman Sachs analyst to identify the emerging market nations that would drive future global growth. This was 21 years ago. They now formally exist, have their own development bank, and assert to speak for the whole Global South. Brazil, Russia, India, China, and South Africa (BRICS), which together make up approximately 42% of the world’s population, 27% of its land area, and 32% of its GDP, have long been devoted to multilateralism and a multipolar world order.
In 2012, BRICS took the momentous decision to establish their own financing mechanism. Two years later, the NDB was established to mobilize resources for infrastructure and sustainable development projects in emerging economies. It also created the Contingent Reserve Arrangement (CRA), a framework for the provision of support through liquidity and precautionary instruments in response to either actual or potential short-term balance of payments pressures. The current Ukraine crisis and the growth of Western sanctions give the BRICS mechanisms a chance to finally overthrow the dominance of financial structures designed by developed nations.
One message stood out loud and clear at the most recent BRICS summit: the alliance is ready to forge its own path toward independence from the West. The BRICS leaders’ ideas suggest that the shape of the planet is changing. For instance, Chinese President Xi Jinping stated that sanctions weaponize the world economy and that it is incorrect to place “blind reliance in the so-called position of power.”
The presidents of the BRICS nations frequently discuss multipolarity, financial inclusion, digital public goods, and sustainable development goals. Underlying these technocratic platitudes is a basic calculus: BRICS is continuing to serve each member state’s unique interests even as its members are growing less and less similar in outlook.
Although there has been much discussion about the strengthening of the China-Russia strategic partnership as a result of the crisis in Ukraine, Moscow is keenly aware of its overall inferiority to Beijing. Vladimir Putin, the president of Russia, cherishes the BRICS for allowing him to diversify his alliances and not rely primarily on China, which dwarfs Russia in strength.
Brazil and South Africa collaborate within BRICS because it promotes both countries’ status-affirmation. At the UN, Brasilia abstained on a resolution supporting Russia’s position on Ukraine, whereas Pretoria accused the North Atlantic Treaty Organization and supported Russia. However, by being a part of the BRICS, Brazil and South Africa are given recognition in their own continents. Due to their prominence on a global stage like BRICS, Brazil and South Africa are seen as the natural leaders of Latin America and Africa, respectively.
On September 28, 2021, Bangladesh became the first nation to formally join the BRICS-led New Development Bank, thus establishing a formal link of Dhaka with this informal bloc. After establishing in Shanghai in December 2015, it has taken the Bank and its BRICS founding members over six years to achieve this transition. In December 2021, Bangladesh joined the New Development Bank (NDB), just ahead of the UAE, Uruguay, and Egypt. Bangladesh is opening fresh vistas and possibly significant new finance avenues for the nation’s development by joining the NDB. However, it should not be overlooked that Bangladesh’s inclusion also broadens the Bank’s pool of potential members and borrowers. The expectation behind NDB’s establishment is that it will replace The World Bank Group and other regional Multilateral Development Banks (MDBs), such as the Asian Development Bank (ADB) or the African Development Bank, as sources of financing (AfDB).
The five members have repeatedly agreed to provide each other with local currency credit facilities. However, given that the US dollar is currently the base currency in international trade, this has not been a simple task. The current financial crisis is an ideal opportunity for the BRICS countries to use the NDB platform to introduce a SWIFT substitute, strengthen national currencies, and increase trade with states that are subject to Western sanctions.
The combined work of the BRICS countries emphasizes the necessity of extending the BRICS platform on the basis of collaboration between regional integration agreements and their development organizations, where the BRICS countries are members. The BEAMS concept, which calls for collaboration across the major regional integration projects of the BRICS economies, including BIMSTEC, EAEU, ASEAN-China FTA, Mercosur, and SADC/SACU, might serve as the foundation of such a platform. Platforms between regional development banks/regional financing arrangements and NDB/BRICS CRA, respectively, might be added to this circle of interaction.
In 2015, Bangladesh met the criteria to be classified as a “Lower Middle-Income Country” (LMIC) by the World Bank. Although the nation has made great progress in recent decades in terms of development, poverty reduction, and social indicators, there are still sizable pockets of poverty. However, Bangladesh’s national development issues transcend beyond the “poverty alleviation” goals of the established MDBs and traditional donors.
Bangladesh continues to face social and environmental issues, as well as critical infrastructural development demands (including energy infrastructure, digital infrastructure, health infrastructure). If ever they were suitable or enough, and that is questionable, external donors who exclusively utilize “low-income country” instruments like “targeted poverty reduction” are insufficient to meet Bangladesh’s developmental needs. According to the NDB, Bangladesh would have a “new platform” to encourage cooperation with the BRICS and upcoming new members on infrastructure and sustainable development within the Bank.
Closer collaboration with BRICS under BRICS Plus mechanism will open doors for Bangladesh to explore new markets and help to bridge the gap between two regional rivals China and India for its own benefits. India’s motivation for remaining in BRICS is not to support China’s global dominance. New Delhi believes it is more advantageous to stay in the BRICS alliance in order to restrain Chinese expansionism by securing multilateral agreements with Beijing. It will also embolden to skirt Western sanctions when it comes to do trading with Russia.
Due to their prominence on a global stage like BRICS, Brazil and South Africa are seen as the natural leaders of Latin America and Africa, respectively. Bangladesh can extract potentials of relations with Brazil and South Africa: doorway to Latin American and African trade frontiers, which is yet to be noteworthy.