Today, the association is a very powerful economic bloc of the five largest developing economies in the world (accounting for 21.5% of world GDP and about 20% of international trade) and demonstrates a high rate of developing international cooperation (between 2002 to 2012 the volume of mutual trade within BRICS increased from US $27 billion to US $276 billion).

Criticism of BRICS’ viability and prospects of development, as well as its claims to global leadership, has recently intensified as a result of a slowdown in its countries’ economic growth. In Brazil, the leaders of the member nations took full advantage of the opportunity to prove to the international community the seriousness of their intent to strengthen multilateral cooperation. As a result, the Brazilian summit marked a new level in its participants’ economic partnership.

The main outcome was the conclusion of numerous agreements to stimulate trade and economic cooperation between member nations and the creation, within the BRICS, framework of a worthy alternative to international financial institutions such as the IMF and the World Bank with the aim of reducing their subjection to economic pressure from Western countries. For Russia, the initiative of the BRICS member states had a particular significance in light of Russia’s increasing differences with the US and the EU in the context of the Ukrainian crisis, including the USA’s implementation of a range of anti-Russian economic sanctions.

Foremost among the documents signed by the leaders of the BRICS member states was an Agreement on the Establishment of the New Development Bank (NDB), for the purpose of “mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging and developing economies”. [1] The NDB’s stated capital will be US $100 billion, with an initial subscribed capital of US $50 billion. Membership will be open to other countries, and observer status will be available to individual countries and international financial institutions alike. Notwithstanding, the lower limit of BRICS member states’ participation is set at 55%, thereby allowing them to monitor the activities of the NDB.

The bank’s main governing body, responsible for making key decisions on a collective basis, will be the Board of Governors, the first chair of which will be Russia. Brazil will chair the Board of Directors, which will be responsible for the overall coordination of the bank’s activities. The first president of the BRICS bank, responsible for its operational management, will come from India. The headquarters of the Bank will be located in Shanghai (China), and an African Regional Centre will be established in South Africa. The opening of the Bank is planned for 2016.

In addition to the agreement establishing the New Development Bank, the following documents were signed by member countries during the course of the 6th BRICS summit:

1. Treaty for the establishment of the BRICS Contingent Reserve Arrangement, the main aim of which is to provide financial support to member countries in the event of short-term liquidity problems. The initial size of the pool will be US$100 billion, to which China will commit US$41 billion, Brazil, Russia and India will each commit US $18 billion, and South Africa will commit US $5 billion. The parties will be able to access the reserves in the following proportions: China – 50% of its invested capital; Brazil, Russia and India – 100% of their invested capital; and South Africa – twice the size of its invested capital.

2. Cooperation Agreement on Innovation between the development banks of BRICS’ member states (Vnesheconombank from the Russian side), with the aim of promoting cooperation between member countries for the purpose of implementing innovation projects. The Agreement envisages the exchange of information for the development of methods and forms of financial support for innovative projects, as well as co-financing initiatives, the implementation of which is of direct interest to two or more BRICS member countries.

3. Memorandum of Understanding on Cooperation among BRICS Export Credit and Guarantees Agencies (Russia being represented by the Export Insurance Agency of Russia, OJSC “EXIAR”), which aims to develop trade and economic relations between members nations, as well as support for the implementation of joint projects in other countries. As with the agreement between the development banks, the memorandum of understanding involves the exchange of information between agencies in the field of export finance and investment in national companies.

At the summit’s plenary session the leaders of the BRICS member nations voiced their intention to further comprehensive expansion of trade and economic ties within the bloc. Thus, Russian President Vladimir Putin noted that “in… conditions of increased international competition, the challenge of activating trade and investment cooperation between our nations becomes particularly important. This will allow us to realise the advantages resulting from the complementary nature of our economies, and to reduce the vulnerability of each BRICS nation to adverse global trends” [2]. Chinese President Xi Jinping proposed expanding comprehensive economic cooperation and creating an integrated market of BRICS member countries in the field of mutual trade and investment. Indian Prime Minister Head of Government of India Narendra Modi urged the leaders of the BRICS member countries to focus on creating tangible steps to spur cooperation to turn BRICS into a platform of impact on the future development of the world as a whole.

A highlight of the summit was the presentation by the Russian side of a draft BRICS Strategy for Multilateral Economic Cooperation, as well as a Roadmap for Investment Cooperation, which fleshes out the strategy and includes 37 projects in various fields – from high technologies to the humanitarian sector. Among the roadmap’s most important projects, Russian President V.V. Putin highlighted the following:

  • the establishment of the BRICS Energy Association and the creation of a Fuel Reserve Bank and BRICS Energy Policy Institute under its aegis to strengthen BRICS member nations’ energy security and develop the mutual trade of energy resources;
  • sharing the Russian GLONASS global navigation system in various industries;
  • strengthening cooperation in mining and processing, as well as organising a centre for training metallurgical experts in BRICS nations, with a view to harnessing the benefits of members’ unique resource base of 30 to 60 percent of global reserves of various resources.

Thus, in the course of the most recent BRICS summit, a unique international financial structure, symbolic of the growing influence of emerging economies in the global financial architecture, was created, laying the foundations of macroeconomic policy coordination among BRICS member nations and forming real financial mechanisms to support investment projects and mutual trade. Specific proposals for the further development of trade and economic cooperation were also expressed.

The decision to actively coordinate further actions aimed at enhancing interaction within BRICS resulted in the adoption of the Fortaleza Declaration and the agreement to establish an appropriate road map. The road map must be completed by the next meeting of BRICS leaders to be held on 9-10 July 2015 in Ufa. It seems Russia will make full use of the specific project format and real mechanisms of interaction within BRICS to further strengthen her unifying role in the world economy, reducing her dependence on trade and economic relations with Western countries and realising the potential of mutually beneficial cooperation with the major emerging economies of the world.

[1] Agreement on the New Development Bank / VI BRICS Summit. P 1-2. URL: http://brics6.itamaraty.gov.br/images/pdf/BRICSNDB.doc

[2] Speech at BRICS summit plenary session / Official Website of the President of Russia. 15 July 2014. URL http://eng.kremlin.ru/transcripts/22677