Engineering of the BRICS engagement

Engineering of the BRICS engagement

The first Summit of BRICS in 2009 initiated the dialogue for association and the member countries started the practice of institution building in every sector of mutual co-operation. The BRIC term was coined to depict and identify the emerging markets of Brazil, Russia, India and China by an investment banking firm as the BRICS markets displayed exemplary potential in terms of investments and returns. However, to churn out better returns the BRICS countries felt an urgent need to be financed at an affordable rate to push growth further. Financial institutions like the IMF or World Bank still were unable to provide cheaper assistance in the developing country framework. Thus, a concept of a bank which could facilitate funding of projects was much desirable. The BRICS alliance initiated with a development agenda especially financing of development projects. The foremost institution of this alliance is the New Development Bank which started as a BRICS Bank and the Contingent Reserve Fund or the CRF. Upon setting up of the financing function credit rating agency became a need of the hour to rate projects as per the prevalent economic culture in the countries where these development projects existed.

Thus, came into existence the concept of a common rating agency. BRICS arbitration center is the other common BRICS institution which has recently emerged and deals with dispute resolution first in the case of joint projects and secondly in case of trade which is subject to rise with BRICS intra country exchanges. Further, as a part of this effort, the five member economies have set up various technical groups, working groups, inter-ministerial meetings to explore co-operation in social, economic, governance and other areas of mutual interest. Some of these engagements meet regularly and host service and events to promote the purpose while some are still at a conceptual stage.

The prescribed agenda for BRICS since its inception has been two main streams of work: (i) coordination in meetings and international organizations; and (ii) the development of an agenda for multisectorial cooperation among its members. In relation to the BRICS coordination in international fora and organizations, the mechanism focuses on the economic financial and political governance spheres. In reference to the first, the BRICS agenda prioritized G-20 cooperation, including the IMF reform. In the political realm, the BRICS advocate the reform of the United Nations and of its Security Council, aiming for more inclusive representation and more democratic international governance. Moreover, the BRICS maintain a constant dialogue on the main issues related to the international agenda.