BRICS|ORIGIN|SUMMIT|ADHYAYAN IAS

BRICS

• It is an acronym that refers to a group of five major emerging national economies: Brazil, Russia, India, China, and South Africa.
• Origin: The term BRIC was coined by British economist Jim O’Neill in 2001 to represent emerging economies.
• The group began holding annual meetings starting in 2006 on the sidelines of the UN General Assembly
• (UNGA), and its success led to formal summits. BRICS nations have met annually at formal summits since 2009.
• South Africa was inducted in 2010.
• Expansion: Ethiopia, Egypt, Iran, and the UAE are the four new additions to the BRICS. It is to be noted that Saudi Arabia has accepted the invitation but delayed formal joining.

Kazan Declaration Highlights:

The summit marked a diplomatic success for Russia, allowing President Putin to counter isolation narratives. Notably, Türkiye, a NATO member, attended for the first time and applied to join BRICS. The Kazan meeting underscored BRICS’s ambition to strengthen ties with the Global South and pursue a multipolar world order in global finance and trade.

Financial and Economic Cooperation:

• BRICS Payment System: Russia advocated for a BRICS-led payment system as an alternative to Society for Worldwide Interbank Financial Telecommunication (SWIFT), from which Russian banks were excluded in 2022.
• BRICS Cross-Border Payment System: Aimed at reducing trade barriers and ensuring non-discriminatory access, while promoting the use of local currencies.
• BRICS Grain Exchange: An initiative to establish a commodities trading platform within BRICS, with a focus on grain.
• BRICS (Re) Insurance Company: Proposed to support crossborder risk-sharing and insurance initiatives among BRICS nations.
• BRICS Clear Depositary: Developed as an independent system for cross-border settlement and depositary functions.
• BRICS Interbank Cooperation Mechanism (ICM): Facilitates innovative financial approaches for projects, including financing in local currencies.

SWIFT

• Society for Worldwide Interbank Financial Telecommunication (SWIFT): A global, trusted messaging system for banks and financial institutions.
• Founded: Established in 1973 and headquartered in La Hulpe near Brussels (Belgium).
• Function: Provides instructions for processing transactions but does not handle the actual transfer of funds.

Governance:

• Swift is a cooperative company under Belgian law and is owned and controlled by its shareholders (financial institutions) representing approximately 2,400 Shareholders from across the world.
• Swift is overseen by the G-10 central banks (Belgium, Canada, France, Germany, Italy, Japan, The Netherlands, United Kingdom, United States, Switzerland, and Sweden), as well as the European Central Bank, with its lead overseer being the National Bank of Belgium.