Vishleshan for Regulatory Exams: Check Daily News Analysis 8 July 2025 

To ace your preparation for the UPSC, RBI, SEBI, or NABARD exam, you have to stay updated about key economic and regulatory updates. In today’s edition of Vishleshan, we delve into an important topic: Making BRICS Count. These issues are highly relevant for competitive exams and offer valuable insights into India’s evolving economic scenario. Keep reading to stay ahead with a clear understanding of these current updates.

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Making BRICS Count

Context: The lengthy, nearly 16,000-word Rio de Janeiro Declaration, which followed the summit, made all the right noises about “inclusive and sustainable” governance

Link to the Article: Business Standard

The BRICS grouping, an alliance of prominent emerging markets, has evolved significantly since its inception, now representing almost half the world’s population and a substantial portion of global economic output. However, despite a recent joint statement criticizing certain geopolitical actions and protectionism, the bloc faces lingering doubts about its cohesion and power to credibly represent the interests of the Global South against Western dominance, largely due to internal divergences and a lack of consistent leadership from its largest economies.

BRICS: The Background

Here’s what you need to know:

What is BRICS?

• BRICS is an acronym for an association of major emerging national economies. The original acronym BRIC was coined by Goldman Sachs economist Jim O’Neill in 2001 to designate Brazil, Russia, India, and China as a group of prominent emerging markets.
• This grouping first met in a formal summit in 2009.

Why it was Founded:

• The formation of BRICS gained momentum in the aftermath of the 2008 Global Financial Crisis (GFC). The GFC exposed the fragilities of the Western-centric financial system and led to a trust-deficit in Western Credit Rating Agencies and financial sector watchdogs.
• Emerging economies, particularly the BRIC nations, felt that existing global financial institutions (like the World Bank and IMF) did not adequately represent their growing economic weight. They sought to:
  • Create a platform for greater coordination and cooperation on global economic and political issues.
  • Advocate for a more inclusive and representative global governance structure.
  • Reduce their reliance on Western financial institutions and currencies.
  • Foster intra-BRICS trade and investment.

Original Members (BRIC):

• Original Members (BRIC): Brazil, Russia, India, and China.
• South Africa’s Addition: South Africa’s attendance at the second BRIC summit in 2010 officially “rounded off the acronym to BRICS”. South Africa was added to provide BRICS with a stronger geographical presence on the African continent and represent the continent’s interests within the bloc.

Current Members and Observers:

• Current Full Members: As of the latest expansion, BRICS has evolved into an 11-country bloc with the original five (Brazil, Russia, India, China, South Africa) plus Egypt, Ethiopia, Indonesia, Iran, Saudi Arabia, and the United Arab Emirates admitted as full-member countries.
• “Partner Countries” (Observers/New Category): A category of “partner countries” was created last year, including Belarus, Cuba, Vietnam, Kazakhstan, Thailand, and Uganda. These can be considered as observer or associate members.

Voting Power and Decision-Making in BRICS:

• BRICS operates on a consensus-based decision-making approach. Decisions are generally made by mutual agreement among all member states, which can be challenging given their diverse interests. The article highlights this challenge, stating that “Consensus based resolution of significant issues… has been hard to achieve, given the varied interests and sensitivities of developed, developing, and least-developed member countries” within the WTO context, a challenge often mirrored in BRICS. (While not explicitly detailed for BRICS decision-making in the provided text, consensus is a widely known characteristic of its operations.)

New Development Bank (NDB):

• What: The New Development Bank (NDB), formerly referred to as the BRICS Development Bank, is a multilateral development bank established by the BRICS states. It was formally launched in 2015.
• Purpose: Its primary purpose is to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, serving as an alternative to existing Western-dominated financial institutions like the World Bank and IMF. It aims to complement the efforts of multilateral and regional financial institutions for global development.

Rio de Janeiro Declaration:

• What: The “Rio de Janeiro Declaration” is the lengthy, “nearly 16,000-word” joint statement issued after the recent BRICS summit (2025) hosted by Brazil.
• Content: It made “all the right noises about ‘inclusive and sustainable’ governance”. The statement included “politically correct terminology” about “promoting a more just, equitable, agile, effective, efficient, responsive, representative, legitimate, democratic and accountable international and multilateral system in the spirit of extensive consultation, joint contribution and shared benefits”. It also mentioned digital cooperation, reforming multilateral institutions (UN, World Bank, IMF), global health policies, open trading systems, AI, and climate change. The statement also “strongly condemned the Pahalgam terrorist attack”.

What is in this declaration that has irked the US President?

• The joint statement “may have attracted the ire of United States (US) President Donald Trump for its criticism of the bombing of Iran and tariff-based protectionism“.
• The statement “condemned the military strikes against Iran and described it as a violation of international law and the charter of the United Nations”.
• It also implicitly criticized the “tariff wars and protectionism,” which are hallmarks of Trump’s trade policies.

Analysis of the Article: Decoding the BRICS’ Relevance and Challenges

The article critically assesses the relevance and cohesion of the expanded BRICS grouping, highlighting both its demographic and economic weight and its internal challenges.

1. BRICS’ Growing Global South Representation and Economic Clout:

• Representation: As a “grouping of the Global South that complements the G20,” BRICS represents “almost half the world’s population,” “more than a third of global land area,” and “over a quarter of global economic output“.
• Counter to Western Hegemony: It is intended to be a “credible multilateral counter to Western hegemony”.

2. Doubts About Cohesion and Power (“Not So Obvious Trends”):

• Lack of Homogeneity (vs. G7): Unlike the “powerful G7 bloc, which comprises largely homogeneous polities in terms of their economies and political outlook,” members of BRICS are at “widely differing stages of economic development and have divergent political ideologies and geopolitical priorities”. This heterogeneity makes achieving consensus challenging.
• Absence of Key Leaders: The “absence of the leader of the grouping’s largest and most consequential economy, China’s Xi Jinping (Premier Li Qiang attended in his place)” signals the “diminishing importance of the grouping as a credible multilateral counter to Western hegemony”.
• Putin’s Remote Attendance: Vladimir Putin’s “inability to attend owing to an arrest warrant by the International Criminal Court (ICC) for his role in the 2022 invasion of Ukraine (he attended via a videoconference link)” is “another signal of diverging interests”. While he received a “red-carpet welcome from ICC member-country Mongolia” without lasting Western condemnation, his physical absence at the summit underscores the legal and geopolitical constraints faced by a key member.

3. The Rio Declaration: Symbolic Unity Masking Differences:

• Politically Correct Terminology: The lengthy Rio de Janeiro Declaration made “all the right noises” using politically correct terminology about “inclusive and sustainable governance” and a more “just, equitable… democratic and accountable international and multilateral system”. It covered a wide range of global issues from AI to climate change.
• Masking Differences: Despite the sweeping language, the statement “masks differences among members”. For example, while the grouping condemned “military strikes against Iran” as a “violation of international law,” “some members called for a stronger statement on Israel’s war on Gaza and its attacks on Iran”.
• Avoiding Direct US Naming: The statement “did not name the US either in its criticism of attacks on Iran or in its statement about the tariff wars and protectionism”. This cautious approach suggests a reluctance by some members to directly confront the US, indicating underlying geopolitical sensitivities.

4. India’s Challenge in Sustaining Relevance:

• India Hosts Next Summit: India is set to host the next BRICS summit in 2026.
• Major Challenge: Sustaining and increasing BRICS’ “relevance will be New Delhi’s major challenge”. This highlights the difficult task of balancing diverse member interests and driving tangible outcomes to assert the bloc’s influence on the global stage.

In conclusion, while BRICS has successfully expanded its membership and increased its representation of the Global South’s economic and demographic power, it continues to grapple with internal heterogeneity and a lack of unified political will. The Rio de Janeiro Declaration, while comprehensive, reflects the delicate balancing act required to maintain consensus amidst divergent geopolitical priorities. For India, hosting the upcoming summit will be a critical test of its ability to enhance the bloc’s relevance and move beyond symbolic unity towards concrete action in challenging the existing global order.

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