It is interesting to analyze the context of the 6th Summit of Heads of State and of Government of BRICS (Brazil, Russian, India, China and South Africa), held in Fortaleza in July 2014. Discussions and declarations of influential groups of interests close enough to inform and influence the decisions of BRICS bloc leaders should be added to the mechanisms of intra-BRICS cooperation announced during the summit in Fortaleza.

The 6th Summit of Heads of State and of Government inaugurated the second cycle of BRICS and marked the institutionalization of the bloc by two financial instruments: Contingent Reserve Arrangement (CRA) and the New Development Bank (NBD). To understand the context of these mechanisms, the Declaration of Fortaleza says at the beginning:

“To inaugurate the second cycle of BRICS Summits, the theme chosen for our discussions was “Inclusive Growth: Sustainable Solutions”, in keeping with the inclusive macroeconomic and social policies carried out by our governments and the imperative to address challenges to humankind posed by the need to simultaneously achieve growth, inclusiveness, protection and preservation.”

Since the first mention of the acronym BRICs made by the English economist Jim O'Neill of Goldman Sachs on the participation of Brazil, Russia, India and China in the global economy and its potential to overcome the major global powers from 2050, these four countries (and South Africa from 2011) opened negotiations to create a bloc within the global political and economic consultations. In general, it can be said that the BRICS are to contribute to strengthening a multipolar international order and to a change in the correlation of forces in the international arena.

BRICS countries have been working on two main fronts: negotiation and articulation of the reform of global governance mechanisms, especially in financial regulatory forums such as the International Monetary Fund and the World Bank; besides the intra-BRICS cooperation. This latter, either in the financial sector, by the New Development Bank and the Contingent Reserve Arrangement, or in sectors such as agriculture, science and technology, health, trade, security and energy.

In 2006, the BRICS bloc was launched and announced in the United Nations General Assembly; since 2009, heads of State and of Government carry out annual summits.

First cycle of BRICS summits and some positioning

 Source: BRICS Leaders Declaration http://brics6.itamaraty.gov.br/ Acessed August 2014

In general terms, according to the Ministry of External Relations, the BRICS:

“expanded the voice of the five countries on issues of the global agenda, in particular those relating to economy and finance, and gave political impetus to the identification and development of specific joint projects in strategic sectors such as agriculture, energy, science and technology. [The bloc] opens for its five members a space for (a) dialogue, identification of convergences and consultation regarding various topics, and (b) expands contacts and cooperation in specific sectors.” (MRE website).

Approximately 100 meetings took place from 2006 to late 2013 in the BRICS context. Besides summits and meetings with ministers of foreign affairs, there were meetings with finance, agriculture, trade, and health ministers; central banks; development banks; statistic divisions; representatives of defense and security; judges of the superior courts of justice of the countries; apart from business and academic forums, think tanks, and cooperative organizations. In addition, the meetings cover topics such as agriculture and agrarian development, security, science and technology innovation, sister cities and local governments, access to medicines, agriculture and food security, intellectual property and urbanization, which are dealt with in seminars, forums and work groups formed by various interest groups and classified according to the structure of the bloc11.

Formal agreements: intra-bloc cooperation

The formal agreements signed by the BRICS are a result of sector discussions. The foreign ministers of the initial BRICs states gathered for the first time in 2006 and 2007 alongside the UN General Assembly with the purpose of identifying the convergence of foreign policy among member states. Later, in 2008, they led the Heads of State and of Government to take a joint position at the G-8 summit. In 2009, the bloc and its annual meetings were established.

The group of Finance Ministers, Central Banks and of senior officials responsible for security issues is among those that meet since 2009, which gives an indication of the initial concerns and topics of interest of the bloc.

Agreements in the financial and economic sector were among the most prominent signed during the summit in Fortaleza, especially the ones regarding New Development Bank and the Contingent Reserve Arrangement. These agreements have strengthened the institutionalization of the bloc and had considerable political impact with the reverberation of two instruments designed to counterbalance the power of institutions like the International Monetary Fund (IMF) and the World Bank (WB). They were both announced at the summit in Fortaleza 2014 – Sections 11 and 13 of the Declaration.

The New Development Bank (NDB) aims to mobilize resources for infrastructure and sustainable development projects in the BRICS countries and other emerging and developing economies, strengthen the cooperation among countries and supplement the efforts of multilateral and regional financial institutions. The New Development Bank shall have an initial authorized capital of USD 100 billion. The initial subscribed capital shall be of USD 50 billion, equally shared among the five founding members in equal parts of US$ 10 billion each and the rest, USD 40 billion, in securities that are used to raise funds in international capital markets.

As for the Contingent Reserve Agreement (CRA), it is a framework for the provision of support through liquidity and precautionary instruments in response to actual or potential short-term balance of payments pressures. The initial total committed resources of the CRA shall be USD 100 billion dollars, with individual commitments as follows: China will contribute USD 41 billion; Brazil, Russia and India will contribute USD 18 billion each; and South Africa USD 5 billion. As for the Contingent Reserve Agreement (CRA), it is a framework for the provision of support through liquidity and precautionary instruments in response to actual or potential short-term balance of payments pressures. The initial total committed resources of the CRA shall be USD 100 billion dollars, with individual commitments as follows: China will contribute USD 41 billion; Brazil, Russia and India will contribute USD 18 billion each; and South Africa USD 5 billion.

Besides the NDB and the CRA, the summit in Fortaleza made progress on other financial and economic agreements:

• Memorandum of Understanding on Technical Cooperation among BRICS Export Credit and Guarantees Agencies that will improve the support environment for increasing trade opportunities among the five nations;

• the Cooperation Agreement on Innovation within the BRICS Interbank Cooperation Mechanism;

• BRICS Economic Cooperation Strategy and the Framework of BRICS Closer Economic Partnership, which lay down steps to promote intra-BRICS economic, trade and investment cooperation by the next summit. Based on the documents tabled and informed by the input of the BRICS Think Tanks Council;

• the commitment to continue a cooperative approach on issues related to tax administrations, customs, and insurance and reinsurance markets.

In the context of social policies of the Fortaleza Declaration the instruction is that National Institutes of Statistics and the Ministries of Health and Education work in partnership with BTTC on the development of joint methodologies for social indicators to be incorporated in the BRICS Joint Statistical Publication to better reflect the advancement of the social policies of the countries and the positive impacts of their economic growth.

It is interesting to notice the study that is going to be conducted by the BRICS Think Tanks Council whose focus will be on the 5 pillars upon which the BRICS strategy for cooperation will rest: 1) raise economic cooperation to promote growth and economic development; 2) peace and security; 3) social justice, sustainable development and quality of life; 4) political and economic governance; 5) progress as a result of knowledge sharing and innovative products.

As for intra-bloc cooperation shared during the summit in Fortaleza, it is mentioned the first Meeting of the BRICS Ministers of Science, Technology and Innovation, in Cape Town, South Africa, whose strategy is to sign the Memorandum of Understanding aimed at: (i) strengthening cooperation in science, technology and innovation; (ii) addressing common global and regional socio-economic challenges utilizing shared experiences and complementarities; (iii) co-generating new knowledge and innovative products, services and procedures utilizing appropriate funding and investment instruments; and (iv) promoting, where appropriate, joint BRICS partnerships with other strategic actors in the developing world.

The summits show signs of interest on cooperation in various sectors. Sector meetings discuss these partnerships and propose the formalization of intentions to cooperate and commit to advance them further. Both instances, however, also provide opportunity to negotiate agreements between some countries (bilateral cooperation), and not necessarily among all of them (multilateral cooperation). This is the case of cooperation between Brazil and China as both countries have 32 cooperation agreements signed soon after the BRICS Summit in 2014.

This article was first published in Brazil and the South Journal's first edition (October 2014).

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