The October BRICS summit in Kazan, Russia marked a pivotal moment in the bloc’s evolution, showcasing key innovations, expanded energy trade, and greater global influence.
The summit formally welcomed the new BRICS members: Egypt, Ethiopia, Iran, and the United Arab Emirates (UAE). Notably, Argentina, expected to join, opted out in late 2023 due to a policy shift under President Javier Milei, reflecting a significant geopolitical development in Latin America, while Saudi Arabia is still considering its formal invitation.
A core focus of the 2024 summit was modernising security and economic cooperation, with key discussions ranging from counterterrorism to carbon-unit trading. The summit also addressed critical security challenges including cybersecurity, terrorism, and regional stability.
Historically, the BRICS have been more successful in opposing the Western dominance of global governance structures than articulating a clear, cohesive vision for reform. The increased diversity within the expanded BRICS bloc could complicate efforts to reach unified policy positions, particularly in multilateral forums such as the Group of Twenty (G20).
The BRICS have been more successful in opposing the Western dominance of global governance structures than articulating a clear, cohesive vision for reform.
While the Organization of the Petroleum Exporting Countries Plus (OPEC+) will continue to manage the international oil market, the expanded BRICS energy profile could influence the sector in the long term. The inclusion of the UAE and Iran significantly boosts the BRICS energy profile, and if Saudi Arabia formally accepts BRICS membership, the bloc will represent 42 per cent of the global oil supply.
The presence of major oil exporters alongside key importers China and India—both of whom did not favour Western sanctions on Russia—highlights the bloc’s potential to establish alternative trade mechanisms that bypass the dominance of the U.S. dollar and the financial influence of the Group of Seven (G7).
India reiterated its commitment to a balanced multipolar world and a reformed global order, advocating for resolving conflicts through diplomacy. Discussions with Russia centered on the Ukraine crisis, where Prime Minister Modi emphasized diplomatic solutions and offered assistance for the safe return of Indian nationals.
In the first India-Iran talks since President Masoud Pezeshkian’s election, priorities included regional stability and boosting trade through the Chabahar Port. Modi’s meeting with President Xi Jinping signaled a warming of India-China relations, with both sides agreeing to resume border patrols in Ladakh.
Finally, as a critical player in the BRICS and a leading voice for the Global South, India aims to expand its diplomatic influence, positioning itself as a bridge between Western powers and emerging economies. India advocated for greater cooperation in information and communication technologies and security, emphasising real-time geospatial data sharing for border security and the fight against transnational terrorism.
India reiterated its commitment to a balanced multipolar world and a reformed global order, advocating for resolving conflicts through diplomacy.
Additionally, the summit offered India an opportunity to further its strategic interests while managing the difficulties posed by China. India must carefully navigate this space going forward to avoid the bloc being dominated by Sino-Russian interests, which could strain its relations with the West.
The 2024 BRICS summit represented a significant moment for the bloc, with India playing a pivotal role in shaping its future. By championing innovation in security, economic cooperation, and multilateral diplomacy, India seeks to enhance its standing in an increasingly multipolar world.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.