Published On : Fri, Oct 14th, 2016

BRICS summit begins in Goa – why is BRICS important – and what will happen at this summit?



Goa/Nagpur: Prime Minister Narendra Modi will arrive in Goa today to attend the two-day BRICS summit which begins in south Goa on Saturday.


Speaking to the media at the State Secretariat in the evening, Mr. Parsekar C,M, of Goa said that both Mr. Modi and Russian President Vladimir Putin would be put up in the same resort, Taj Exotica, during their stay.

As India prepares to hold the 5th annual conference we should know what is BRICS? Why do these countries hold summits? Do they have enough in common to make a difference in the global economics and politics?

What are the BRICS?

In 2001, Jim O’Neill, then Chief Economist of Goldman Sachs, coined the acronym for Brazil, Russia, India and China as the largest emerging markets economies. He expected them to grow faster than the developed countries and to play an increasingly important role in the world.

And so they have. In the last 15 years, Brazil, Russia, and India have caught up with the smallest G7 economy (Italy) in terms of nominal GDP, while China has overtaken Japan and became the second largest economy in the world. Together, BRIC’s nominal GDP is similar to that of the EU or US and is likely to overtake both in the coming few years.

In 2009, BRIC countries held their first summit. In 2010, South Africa asked to join and was invited – thus transforming BRICs into BRICS.

What is significant about this conference in Goa? Modi’s views

In a series of tweets, Mr. Modi said he is looking forward to the two-day meet.

”India is delighted to host the summit on 15-16 October 2016, followed by a first-ever BRICS-BIMSTEC Outreach Summit. I look forward to extending a warm welcome to the ten leaders of the BRICS and BIMSTEC families”.

”In Goa, I will also have the honour to receive President Vladimir Putin of Russia for the India-Russia Annual Summit and President Michel Temer of Brazil for a bilateral visit.”

”President Putin’s visit will give us an opportunity to consolidate and reaffirm a unique time-tested friendship and partnership with Russia.”

”President Temer’s visit will open up new areas for cooperation with Brazil, an important strategic partner.”

”I also look forward to useful conversations with my fellow leaders from China, South Africa, Brazil and Russia on addressing pressing international and regional challenges that stand in the way of our goals.”

”As Chair of the BRICS this year, India has embraced a stronger emphasis on promoting people-to-people linkages in diverse fields including trade, sports, education, films, scholarship, and tourism.”

”It is anchored in the belief that our people are pivotal partners in our effort to craft responsive, collective and inclusive solutions.”

”We will launch new initiatives in Goa even as we mark the successful operationalization of initiatives like the BRICS New Development Bank and the Contingent Reserve Arrangement”.

”I am optimistic that the BRICS Summit will strengthen intra-BRICS cooperation and advance our common agenda for development, peace, stability and reform”.

”In a first, I am happy that India is facilitating an outreach Summit with the BIMSTEC leaders of Bangladesh, Bhutan, Myanmar, Nepal, Sir Lanka and Thailand”.

”Representing nearly two thirds of humanity together, we hope to tap the potential for cooperation and the dividends this will bring. India looks forward to building bridges to new partnerships and finding common resolve and solutions to our entrenched problems”.

Why does the world need the BRICS?

Jim O’Neill’s point has been that the world is changing. The leading role of the Group of Seven (G7) and, more broadly, of the Organisation for Economic Cooperation and Development (OECD) is no longer undisputed. Most multi-lateral institutions were designed in the era when the West dominated the world. The US and Europe are over-represented in the IMF and the World Bank. Together with Japan, they control most regional development banks as well.

This imbalance has been especially clear during the recent global financial crisis when the need for participation by non-G7 countries became evident. This resulted in reviving the Group of 20 (G20) and proposals to redistribute voting rights in international financial institutions. But change has been slow and Western countries continue to control the international financial institutions.

This is why BRICS summits are so important. These meetings provide a unique forum where non-OECD leaders can discuss global challenges and co-ordinate their actions within and outside global institutions. The small size of the club and the absence of OECD partners helps in shaping the discussions at the summit.

The BRICS summit and Pakistan
The gathering of these world leaders also gives PM Modi an opportunity to highlight the threat from Pakistani terrorists, who, last month, attacked an army camp in Uri in Kashmir. 19 soldiers were killed.Before conducting surgical strikes across the Line of Control on September 29, Delhi mounted a diplomatic offensive to isolate Islamabad.The final summit declaration is expected to highlight “isolating countries that provide shelter to terror groups and help in arming these groups.” However, Chinese President Xi Jinping is unlikely to have much interest in casting Beijing’s alliance with Pakistan into doubt. Though it does have its own concerns about internal security in Pakistan given China has some significant projects that involve construction through Pakistan.