In the aftermath of the defeat against Germany in the World Cup, Brazil has had little time to mourn as it moves into hosting the sixth Brics (Brazil, Russia, India, China and South Africa) heads of state summit this week.
Last year’s Durban summit was pivotal for the coalition with a number of initiatives creating an institutional memory through the formation of a raft of formal Brics projects – most notably the Contingency Reserve Arrangement (CRA), the Leaders-Africa Dialogue Forum Retreat, the Business Council and the all-important Development Bank.
The CRA, with an expected initial fund of $100 billion (R1 trillion) – of which South Africa, as the smallest country, is only expected to contribute $5bn – means Brics may not need the support of the International Monetary Fund to make its own loans and so affording member states greater political autonomy.
This may not sit that well with the World Bank, however, which intends to create a Global Infrastructure Facility this year – perhaps out of a sense of competition with the Brics Development Bank and the CRA.
Both of these will institutionalise the collaboration of Brics members and ensure that member countries can forestall short-term liquidity pressures and strengthen financial stability within their ranks, without having to look to other global financial institutions.
This scrambling to close financial and collaborative ranks outside of the Brics nations may alone be proof of the coalition’s success and perceived – and real – power.
The Brics Business Council is chaired by Patrice Motsepe and, at its first meeting last year, there was vigorous discussion about the various ways the Brics group could enhance trade and investment among themselves, such as urging governments to expedite multiple-entry business visas for longer periods and a proposed business travel card, as well as to increase connectivity and harmonise technical standards across countries – the latter being vital for South Africa which ranks so low on the world’s connectivity scale.
Last year’s South African summit was considered a success and the Brazil summit is expected to give meat to many of the structures and considerations it launched.
Following South Africa’s example in including other African countries in last year’s summit, Brazil has invited the heads of other South American countries in a bid to increase co-operation between the Brics and its region.
The Brazil summit will be the first official engagement between a number of new heads, most notably Narendra Modi, fresh from his victory in India’s elections.
He is a charismatic leader with a strong entrepreneurial flare and belief that the best “social upliftment” initiative a government can do for its people, is create employment.
There are over 100 Indian companies active in South Africa and this number is likely to increase, as is the flow of South African companies into India.
The Modi-Chinese President Xi Jinping dynamic will be an interesting one to watch.
This summit could mark the start of a new Indo-China narrative, especially in light of one of the summit’s key agenda points being a decision on the Development Bank head office.
This is still most likely to be Shanghai; though not an initially popular location, as China has the biggest financial clout and is the best-set member state to get the bank quickly realised as a bricks and mortar reality.
Also on the agenda is UN Security Council reform, which remains a thorn in Brazil, India and South Africa’s collective side, as only Russia and China have permanent seats on the council.
With Modi having the overwhelming support of the largest democracy behind him, he is expected to be the most vociferous voice.
However, member states come to this week’s summit from very different vantage points than last year.
It will be Modi’s first multilateral meeting.
President Jacob Zuma will be there as a second-term head of state and will be looking to increase investment and trade, but he comes with significant domestic complexity that includes industrial strikes, unrest and stalled economic growth – as does Brazil.
The Brics nations were always strange bed-fellows.
Member states can learn more from their collective pathways about how to best address economic inequality and sustainable growth than by going it alone.
So there is a great deal at stake at this week’s summit.
The Brics nations have come too far and accomplished too much for it to be anything but a success.
Verachia is an adjunct faculty member and head of the India Africa Business Network at the Gordon Institute of Business Science. Twitter @averachia