BRICS (Brazil, Russia, India and China, South Africa) was formulated in 2001 by economist Jim O'Neill, of Goldman Sachs, in a report on growth prospects for the economies of Brazil, Russia, India and China – which together represented a significant share of the world's production and population. In 2006, the four countries initiated a regular informal diplomatic coordination, with annual meetings of Foreign Ministers at the margins of the General Debate of the UN General Assembly (UNGA). This successful interaction led to the decision that the dialogue was to be carried out at the level of Heads of State and Government in annual Summits. As of the First Summit, held in Yekaterinburg in 2009, the depth and scope of the dialogue among the Members of BRICS – which became BRICS in 2011 with the inclusion of South Africa – was further enhanced. More than an acronym that identified countries emerging in the international economic order, BRICS became a new and promising political-diplomatic entity, far beyond the original concept tailored for the financial markets.
After the Yekaterinburg Summit, five annual Summits were held (Brasilia, 2010; Sanya, 2011; New Delhi, 2012; Durban, 2013; and Fortaleza, 2014). The leaders of the member countries have been holding at least one annual meeting. In Durban last year, the first cycle of Summits was completed, each member country having hosted a meeting of leaders. In this period, BRICS has evolved in an incremental manner, in areas of consensus amongst its members, strengthening its two main pillars: (i) coordination in multilateral FORA, with a focus on economic and political governance; and (ii) cooperation between members. Regarding the first pillar, the efforts towards reforming the structures of global governance, especially in the economic and financial fields – Financial G-20, International Monetary Fund, World Bank – receive a special emphasis, as well the reform of political institutions, such as the United Nations.
Intra-BRICS cooperation has also been gaining density: a broad agenda has been developed, comprising areas such as finance, agriculture, economy and trade, combating transnational crime, science and technology, health, education, corporate and academic dialogue and security, among others. In that context, the financial sector receives a special focus as a new front of cooperation. At its 6th Summit, the BRICS established the New Development Bank, aimed at financing infrastructure and sustainable development projects in the BRICS and other developing countries. The new institution will count initially with a subscribed capital of US$ 50 billion.
Agreements and Memoranda of Understanding
This Memorandum of Understanding on Cooperation (“MoU”) is entered into by and among the following export credit insurance agencies of the BRICS countries (the Federative Republic of Brazil, the Russian Federation, Republic of India, People’s Republic of China and the Republic of South Africa) respectively:
• Brazilian Guarantees Agency (Agência Brasileira Gestora de Fundos Garantidores e Garantias S.A. – “ABGF”), a state-owned company with the purpose of operating in the guarantee, insurance and reinsurance sectors. ABGF’s registered office is at Setor de Autarquia Sul, Quadra 3, Bloco O, 11º andar, Ed. Órgãos Regionais, CEP 70.079-900 – Brasília – DF, Brazil;
• Export Credit Guarantee Corporation of India Ltd, India (“ECGC”), an export credit insurance organization fully owned by Government of India. ECGC is established to provide insurance for exporters and banks in India, and to encourage, facilitate and develop trade between India and other countries. ECGC’s registered office is at Express Towers, 10th Floor, Nariman Point, Mumbai – 400 021, India;
• China Export & Credit Insurance Corporation, P.R. China ("SINOSURE"), an authorized Chinese export credit insurance institution, fully owned by government. SINOSURE’s registered office is at Fortune Times Building, 11 Fenghuiyuan, Xicheng District, Beijing, China; and
• Export Credit Insurance Corporation of South Africa Ltd, South Africa (“ECIC”), an authorized South African export credit insurance company. ECIC is a self-sustained state-owned ECA with its registered office at 349 Witch Hazel Avenue, Highveld Extension 79, Centurion, 0157, South Africa.
In July, 2015 the BRICS countries – China, Russia, Brazil, India and South Africa – set up a new bank (the New Development Bank) with the purpose of providing loans to poor countries across the world. The NDB will initially have a capital base of $100 billion, funds that will be used for infrastructure projects, which are a major issue in all of the BRICS countries save China. However, many of China’s construction companies would be happy to take on big projects abroad. What’s more, in addition to the bank, the five BRICS members will also set aside $100 billion from their foreign-currency reserves for swap lines, which can be used by any other BRICS member under a Contingent Reserve Arrangement. The bank will be headquartered in Shanghai, and its first president will be from India.
In conclusion, it can be said that establishment of new development bank and BRICS will give more power to these developing countries at the international summits. Now developed countries can be compelled to listen the proposals made by these countries.