The economies of Brazil, Russia, India, China and South Africa together form the BRICS grouping – a unique assemblage of the world’s largest emerging economies. Individually and collectively, these nations are expected to be amongst the world’s largest economies in the near future. BRICS comprises 43 per cent of the world population, possessing 30 per cent of the world GDP and 17 per cent share in world trade. As a formal grouping, BRIC started after the meeting of the Leaders of Russia, India and China in St. Petersburg on the margins of G8 Outreach Summit in 2006, with the inclusion of South Africa in 2011.

India hosted the 8th BRICS Summit during its Chairmanship on October 15-16, 2016 in Goa. The theme of India’s BRICS Chairmanship is Building Responsive, Inclusive and Collective Solutions. During India’s BRICS Chairmanship, a five-pronged approach has been adopted:

  • Institution building to further deepen, sustain and institutionalize BRICS cooperation;
  • Implementation of the decisions from previous Summits;
  • Integrating the existing cooperation mechanisms;
  • Innovation, i.e., new cooperation mechanisms; and
  • Continuity, i.e., continuation of mutually agreed existing BRICS cooperation mechanisms.

The focus during India’s BRICS Chairmanship has been mainly on enhanced people-to-people (P2P) contacts of BRICS member states, especially youth. In this context, India hosted activities like U-17 Football Tournament, Youth Summit, Young Diplomats’ Forum, and Film Festival, to name a few.

As a curtain raiser to the BRICS Summit in Goa, the BRICS Business Forum was held on October 13, in New Delhi. This year, the forum focused mainly on the need for leveraging the comparative advantages of the economies of the BRICS nations and discussed cooperation in energy, infrastructure development, and agri-business, especially in the backdrop of a progressive global economic recovery, with improved resilience and emergence of new sources of growth. Currently, global growth remains weaker than expected with downside risks to the global economy continuing to persist. This is reflected in a variety of challenges including commodity price volatility, weak trade, high private and public indebtedness, inequality and lack of inclusiveness of economic growth, according to the BRICS Goa Declaration. Uncertainty in the global economy is accentuated by geopolitical developments such as terrorism, strife, refugee flows, and illicit financial flows. However, the benefits of growth need to be shared broadly in an inclusive manner.

One of the biggest outcomes of BRICS process has been the operationalization of the New Development Bank (NDB) and of the Contingent Reserve Arrangement (CRA), which contributes greatly to the global economy and the strengthening of the international financial architecture. A landmark initiative of the 8th BRICS Summit was to hold an Outreach Summit of BRICS leaders with the leaders of BIMSTEC member countries.

BIMSTEC, or The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, brings together Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand for cooperation in trade, industry and sectors of mutual interest. The grouping was a natural progression done on the basis of the regional proximities as well as the fact that these countries share common historical trade linkages through the Bay of Bengal. The sub-region has four LDCs (Bangladesh, Bhutan, Myanmar and Nepal). This regional grouping provides a unique link between South Asia and Southeast Asia, bringing together over 2 billion people, or about 22 per cent of the world population, and a combined GDP of over USD 2.7 trillion.

The BIMSTEC region naturally lends itself to regional integration with physical connectivity as well as economic cooperation. As the biggest member of BIMSTEC, the nations in the region look forward to India’s leadership to show tangible results. In terms of connectivity, BIMSTEC has at last three major projects that, when finished, could transform the movement of goods and vehicles through the countries in the grouping.

Taking advantage of the opportunity of BRICS leaders’ presence in the subcontinent, the leaders of the BIMSTEC composition were invited to the BRICS-BIMSTEC Outreach Summit in Goa, India. There was common agreement on strengthening BRICS – BIMSTEC solidarity and cooperation based on common interests and key priorities to further strengthen strategic partnership in the spirit of openness, solidarity, equality, mutual understanding, inclusiveness and mutually beneficial cooperation. Emerging challenges to global peace and security and to sustainable development which require immense concentrated and collective efforts can only be achieved when there in universal acceptance and consensus. The joint Summit explored possibilities of expanding trade and commercial ties, and investment cooperation between BRICS and BIMSTEC countries.

With the 2030 Sustainable Development Goals and overarching focus on poverty eradication, as well as laying an equal and balanced emphasis on the economic, social and environmental dimensions of sustainable development, countries in the BRICS-BIMSTEC groupings stand to gain from the benefits of introduction of innovative mechanisms for trade. For the implementation of SDGs, the establishment of a Technology Facilitation Mechanism within the UN with a mandate to facilitate technology for the implementation of the SDGs will tremendously improve the regions’ infrastructure.

Areas such as public and private investments in infrastructure, including connectivity, to ensure sustained long-term growth being encouraged in the BRICS and BIMSTEC regions, new and innovative projects will see the light of day in the regions. Involvement of Multilateral Development Banks to validate call for approaches to bridge the financing gap in infrastructure will increase the number of trade engagements.

The multilateral trading system and the centrality of the WTO as the cornerstone of a rule based, open, transparent, non-discriminatory and inclusive multilateral trading system with development at the core of its agenda garnered much support from the BRICS and BIMSTEC member countries. There is therefore much hope in the community for a scenario of greater number of bilateral, regional, and plurilateral trade agreements complementary to the multilateral trading system with the principles of transparency, inclusiveness, and compatibility with the WTO rules very much in place.

The role of BRICS and its collaborative efforts in the field of economic and financial co-operation are yielding positive results. Emphasis on the importance of cooperation in order to help stabilize the global economy and to resume growth will be the order of the day among these nations.

Areas such as ICT expansion, energy and climate change, such that the global imperatives of attaining energy security and international cooperation are achieved inclusively, received attention. Therefore, the upcoming COP22 in November in Marrakech could demonstrate a whole new approach toward ratifications of the NDCs as well as stronger relationships and a unified BRICS and BIMSTEC participation. It is noteworthy that an MoU between Export-Import Bank of India (Exim Bank) on General Cooperation with the New Development Bank (NDB), along with other Development Financial Institutions of BRICS nations was signed, thus marking the beginning of a fresh outlook on exports among the BRICS economies.

Update on BIMSTEC Business Summit 2016

CII organized the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) Business Summit on 14 October in New Delhi as a precursor to the BIMSTEC Leaders Retreat, held on the sidelines of the BRICS Summit 2016. Chairing the Summit, Smt Nirmala Sitharaman, Minister of Commerce and Industry, Government of India called for greater buoyancy in the approach toward implementing projects in the BIMSTEC region. She elucidated how the complementarity of the region could be highlighted to close in on the agreements that are being discussed. She felt that it was apt to invite the BIMSTEC countries to interact with the BRICS business meetings. She observed that the countries in this region have been connected since time immemorial and hence the organic nature of pre-existing relationships could be easily revived.

 In his inaugural address Mr. Chandrajit Banerjee, Director General, Confederation of Indian Industry, said that Indian industry has a key role to play in driving the global trade and investment agenda. The Annual BIMSTEC Business Summit provides opportunities for Country Mapping of the member countries. The engagement would facilitate as well as identify opportunities of sectoral collaboration and policy advocacy between member countries. CII would continue to foster better environment for increased trade and investments in the region through its MoU partners as well as with industry associations in the various BIMSTEC countries.

The BIMSTEC Leaders Retreat held on October 17, 2016 in Goa, on the sidelines of the BRICS Summit 2016, took forward the discussions held in the pre-summit in New Delhi. The retreat made way for the exploration of a BIMSTEC Motor Vehicle Agreement among member nations. This promising step will encourage greater trade linkages among the countries as well open up new avenues for cooperation for industries interested in investing in the region.

An expedited finalization of the Memorandum of Association on the Establishment of BIMSTEC Technology Transfer Facility in Sri Lanka will also see the proliferation of ICT projects across countries which will help establish better digital connectivity.

A collective approach to address public health issues in these countries also has been focused upon such that common problems can be resolved universally. The BIMSTEC Network of National Centers of Coordination in Traditional Medicine and its Task Force is also targeting to expand and deepen cooperation in this sector. Apart from these steps, the region is poised to heighten its focus on tourism by establishing a Buddhist Tourist Circuit as well as a Temple Tourist Circuit within the region.

Recognizing the year 2017 as the twentieth anniversary of the establishment of the BIMSTEC, the BIMSTEC Secretariat is also planning a series of activities. As a next step, Nepal will be hosting the Fourth BIMSTEC Summit in 2017 where the progress of the outcomes would be reviewed and further worked upon.

Source: CII