Millennium Post

Strengthening economic ties

Strengthening economic ties

As Prime Minister Narendra Modi arrives in the Brazilian capital for a two-day visit for participating in the BRICS summit for the sixth time—his first being at Fortaleza, also in Brazil in 2014—the 11th BRICS summit promises enhancement of the bilateral strategic partnership between India and Brazil foremost. The meet will also focus on building mechanisms for cooperation for counter-terrorism and strengthen India's ties with the five major economies in the world that come together to form BRICS: acronym for an association of the five emerging national economies—Brazil, Russia, India, China and South Africa. These five economies comprise 42 per cent of the world's population, and contribute 23 per cent of the global Gross Domestic Product. Separate bilateral meetings with Russian President Vladimir Putin and Chinese President Xi Jinping are also the highlights. As Prime Minister Modi said in his departure statement, his summit is marked by these five economies aiming to significantly strengthen their cooperation in science, technology and innovation. Also with a view to enhance cooperation on digital economy, the Prime Minister will attend attend the BRICS business forum closing ceremony and the 'closed' and plenary sessions of the summit, wherein the closed session, the discussions will be centred on the challenges and opportunities for the exercise of national sovereignty in the contemporary world; subsequently, BRICS plenary session will have the leaders discuss the intra-BRICS cooperation for the economic development of BRICS societies. Signing a BRICS memorandum of understanding between trade and investment promotion agencies is on the table. The focus on key areas such as digital economy, science and technology, and counter-terrorism cooperation are especially significant as these are the elements that will bring the world closer together while they also have the potential to increase distances by widening the gap from advancement in technology and the lack of it. Making an effort to be on a common platform with respect to some most critical aspects of development is effectively a matter of security whereby some degree of development is assured and with external support, internal aspects of a member state also gain strength. For the November 13-14 Summit, Prime Minister Narendra Modi said that "I look forward to exchanging views with other BRICS leaders with the aim to further strengthen Intra-BRICS cooperation particularly on the theme of the Summit Economic growth for an innovative future," before leaving. With respect to the bilateral meeting with the Brazilian President, Brazil and India share close and thriving bilateral relations across the spheres of defence, security, trade, agriculture, energy, and space. Close cooperation between the two countries in multilateral forums has been a crucial aspect of the strategic relationship between the two developing nations. The economic initiatives and trade ties at this international forum hold special significance for India as the domestic economy is still in want of stability.

Acknowledging that business and industry play an important role in Intra-BRICS ties, The Prime Minister will be addressing BRICS Business Forum and interacting with BRICS Business Council and New Development Bank. It is of far-reaching significance that the BRICS nations are considering adding countries to development bank. The leaders of BRICS member states will discuss opening their development bank to other countries to increase its capital to fund infrastructure and other projects. Such a move could serve the dual purpose of expanding the network, and in the process, the scope of this initiative, as well as opening more doors for the member states on an individual basis. The New Development Bank (NDB) was launched in 2014 by China, India, Russia, Brazil and South Africa and has a subscribed capital of $50 billion, of which $10 billion is paid capital. It is informed that the expansion of the bank is on the agenda at the annual summit November 13-14. The bank's membership is open to all members of the United Nations, and its mandate is to mobilise funds for sustainable development projects in BRICS and other emerging economies and developing countries. Expecting the membership will be expanded gradually, it will bring with it more avenues to greater development. Considering how the bank has taken a long time to deliver loans to help boost economies amid slowing global growth, it must be acknowledged that this initiative of developing countries was not the easiest of initiatives to implement but has survived and is indeed thriving. NDB has come a long way in four years compared to other multilateral lending institutions something, many of which took several years to achieve what NBD has accomplished. NDB's total project approvals stands at $12.5 billion for 45 projects. In 2019 alone it approved 14 loans worth $4.4 billion. By the end of 2019, the bank projects total approvals to reach $14 billion to $15 billion, which amounts to nearly double the portfolio of the China-led Asian Infrastructure Investment Bank. In its recent loans, the bank last month approved $500 million for Brazil's national Climate Fund project, known as Fundo Clima in Portuguese. It is aimed at helping the country meet its Nationally Determined Contribution, a target reducing carbon emissions under the Paris climate accord. While matters look bright for India at the BRICS Summit concluding on November 14, something that India will be a spectator to is if Brazil and China could mend their ties on this occasion with respect confrontation over Venezuela, a key point on which Brazil stands in disagreement with both Russia and China.

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