Paper: GS – II, Subject: International Relations, Topic: Regional and global groupings, Issue: Relevance of BRICS in present times.
Context:
BRICS’ rising relevance amid global instability, especially in light of US opposition and geopolitical fragmentation serves the interests of the Global South rather than create a Cold War-like divide.
Key Highlights:
- US Reaction to the recent BRICS summit: US President Trump’s threatened 10% import tariff on nations aligned with BRICS’s “anti-American policies”
- Implication: BRICS is perceived as a challenge to US unilateralism in global affairs.
Historical Comparison – UNSC vs BRICS:
- UNSC Deadlock: Past divisions between Soviet bloc and Western powers in the UNSC show that ideological divisions aren’t new.
- BRICS Role: Even if divided, BRICS still offers a platform for dialogue and can contribute meaningfully.
Principal Contribution of BRICS:
- Focus on Development: Promotes economic growth and development for emerging markets.
- Not Conflict Resolution: Its aim isn’t direct resolution of global conflicts or strategic stability.
- Commercial Integration: Enhances trade and commercial interaction among the Global South.
Key Proposals:
BRICS Clear:
- Objective: Establishment of a financial infrastructure for cross-border settlement of securities.
- Advantage: Reduce dependency on Western systems like SWIFT, which are vulnerable to sanctions (e.g., Russia’s frozen assets post-Ukraine invasion).
Role of BRICS Bank:
- Development Focus: The New Development Bank is funding clean energy and other large infrastructure projects in BRICS nations.
- Proposal for Reinsurance Body: Could support these investments and boost economic resilience.
Dollar Dominance Challenge:
- Core Issue for US: Any global currency alternative threatens the dollar’s dominance.
- Currency as Weapon: Dollar hegemony can be used to enforce sanctions and extract geopolitical concessions.
- Alternatives to Dollar: BRICS nations are pushing for a fairer, less dollar-dominated system without aiming for Cold War-style confrontation.
- IMF’s SDR Pegging: A potential BRICS stablecoin could be pegged to IMF’s Special Drawing Rights.
- Blockchain Testing: Hong Kong is experimenting with BRICS-linked currency transfers via Ethereum blockchain.
Conclusion:
BRICS is not trying to build a wall like Cold War blocs. It only aims to offer a multipolar alternative that’s more equitable and development-focused.
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