Formidable Indian - Global & Regional

Associations: BRICS & SAARC

BRICS

Name of Organisation & Members. BRICS (Brazil, Russia, India,

China, South Africa). The five leading emerging powers,
straddling the continents of Asia, Africa and Latin America.

Year of Establishment. Born in the aftermath of globalfinancial

crisis, the first summit was held in Russia in 2009

Mission Statement. To establish a formidable multilateral

grouping that has striking convergence of interests at the global
level rather than at regional level, so as to create a new world
order which would reflect a tectonic shift by reducing the US and

European Union geo-political dominance and economic

hegemony.

Historical Perspective. The global institutions like, World Bank

and IMF are widely considered to be predominantly influenced by
the dictates of US and its European cronies and are biased
against the interests of emerging economies.

The BRICS, power of Five, constitutes, one fourth of the worlds

landmass, 40% of the worlds population and accounts for 25% of the
global GDP amounting to $24 trillion.
During the period of Global recession these emerging markets are the
favourite destination for investors.
Besides being emerging economies, these countries are also a power
to reckon with in the global scenario, Russia and China are permanent
members of the UNSC and the balance three, i.e. India, Brazil and
South Africa are considered to be serious contenders for reserving a
permanent berth in the expanded UN Security Council.
Hence, this alliance forges to weaken the dominance of US dollar,
provide an environment conducive for economic collaboration and also
to provide a powerful voice to keep in check the West- dictated
narrative of the world affairs.
Till now six BRICS summits have been held, as follows; Russian city of
Yekaterinburg in June 2009, Brazil in 2010, Sanya, China in 2011, New
Delhi 2012, Durban, South Africa in 2013 and this years summit was
held in the holy city of Fortaleza, in Brazil from 14 to 16 July 2014.

Creation of New Development Bank.

The most distinctive highlight of the 2014 summit was the

inauguration of the New Development Bank (NDB). The spade work for
the same had already been completed after the decision of its creation
was taken during the Durban Summit of 2013.

On 15 July 2014, the group signed the mandatory documents to create

the US$100 BRICS Development Bank. The salient aspects regarding
the functioning of this Bank are listed below:
a. Reduce dependency on US dollar and strengthen stand during
World Bank and IMF decision making.
b. Cooperation of BRICS export credit agencies and cooperation on
innovations amongst member states.
c. Shanghai was selected as the Headquarters, first President from
India, inaugural Chairman for Board of Directors from Brazil and
inaugural Chairman of Board of Governors from Russia. South
Africa will be the African Headquarters of the NDB.
d. Banks primary focus will be lending for infrastructure
development projects with a limit of $ 34 billion annually.
e.

All five member states to contribute $10 billion each to

accumulate a capital of $50 billion initially, this would be
increased to $100 billion over a period of time.

f. Any member cannot increase its share capital without the

consent of balance four members. This issue was raised by India
and was accepted by other members.
g. Bank will allow new members to join up, but the total capital
value of BRICS member countries cannot fall below 55% of the
total share value.
h. A Contingent Reserve Arrangement (CRA) will be maintained to
provide protection against global liquidity pressures. It will serve
as a precautionary instrument against short term balance of
payment pressures.
i. Bank would also provide monetary assistance to other countries
suffering from economic volatility. $10 billion as paid-in capital
($2 billion from each member) and $40 billion to be paid upon
request.

j. Out of the total $100 billion being envisaged as the capital of the
Bank, $41 billion will be contributed by China, $18 billion by
India, Russia and Brazil and $5 billion by South Africa.
k. The Bank is scheduled to start lending by 2016.
SAARC

Name of Organisation & Members. SAARC (South Asian

Association of Regional Cooperation). It has eight members;
India, Bhutan, Nepal, Bangladesh, Sri Lanka, Maldives, Pakistan,
Afghanistan and a number of observer nations.

Year of Establishment and HQ. 08 December 1985 and its

Headquarters is in Kathmandu, Nepal.

Mission Statement. To promote economic, socio-cultural

development and collective self-reliance of the member states.
Also establish credible diplomatic relations with multilateral
entities, like EU and UNO (as an observer).

Historical Perspective. During the late 1970s, the seven inner

South Asian countries (India, Pakistan, Bhutan, Nepal,
Bangladesh, Sri Lanka, Maldives) came together to form a trade
bloc to enhance mutual trade in the region.

The idea of regional cooperation was initially mooted in 1977 by the

President of Bangladesh, Ziaur Rahaman during his visit to India and
was further echoed by King Birendra of Nepal.
The security situation in South Asia deteriorated after USSR invaded
Afghanistan in 1979, and the need for regional cooperation was felt
more strongly.
Responding to the convention of President Rahaman and King Birendra
the officials from the foreign ministries of all seven countries met for
the first time in Colombo in April 1981.

Finally, the proposal put forth by Bangladesh was endorsed by the

other six nations. Though Pakistan, and even India were initially
sceptical about its viability.
India felt that the newly formed smaller nations, through this union,
may unite to oppose India in various bilateral issues as India shares
borders with most of them.
Pakistan on the other hand felt that India was reorganising the South
Asian countries against Pakistan and creating a regional market for its
domestic products, with the aim of assuming economic dominance in
the region.
In 1983, during the International Conference of foreign ministers held
at Delhi, by PM Narasimha Rao, the declaration of SAARC was adopted
and the Integrated Action Programme was launched in the fields of
Agriculture, Rural Development, Telecommunication, Metrology, Health
and Population activities.
The first SAARC summit was held at Dhaka on 7-8 December 1985.
Afghanistan was included as the eighth member in 2007. Observer
status has been accorded to USA, Australia, EU, Iran, China, Mauritius,
Japan, South Korea and Myanmar.
The foreign ministers of member nations meet twice a year (Indian
Home Minister Mr Rajnath Singh attended the bi-annual meet at
Kathmandu on 19 Sept 2014).
SAARC Heads of the States meet annually; the eighteenth SAARC
summit is scheduled at Kathmandu in November 2014 which will be
attended by PM Modi.

Information on Important Conventions of SAARC

a. SAARC Charter was signed on 08 December 1985, establishing

regional association and Study Groups were formed to tackle
problems of terrorism, drug trafficking, and increasing womens

participation. (Irony is that after 30 years we are still fighting

for the same issues).
b. In 1987 an agreement was signed to establish a South Asian
Food Reserve.
c. 1989 was declared Year against Drug Abuse and 1990 was
declared as Year of Girl Child.
d. A number of Regional Centres have been established as follows:

SAARC Agricultural Centre (SAC), Dhaka, Bangladesh

SAARC Meteorological Research Centre (SMRC), Dhaka,

Bangladesh

SAARC Tuberculosis and HIV/AIDS Centre (STAC), Kathmandu,

Nepal

SAARC Documentation Centre (SDC), New Delhi, India

SAARC Human Resources Development Centre (SHRDC),

Islamabad, Pakistan

SAARC Coastal Zone Management Centre (SCZMC), Maldives

SAARC Information Centre (SIC), Nepal

SAARC Energy Centre (SEC), Pakistan

SAARC Disaster Management Centre (SDMC), India

SAARC Forestry Centre (SFC), Bhutan

SAARC Cultural Centre (SCC), Sri Lanka

SAARC Development Fund at Bhutan

a. The South Asian Free Trade Agreement (SAFTA) was signed on 6

January 2004 during Twelfth SAARC Summit held in Islamabad,
Pakistan. The Agreement entered into force on 1 January 2006,

and the Trade Liberalization Programme commenced from 1 July

2006, which includes, Customs Union, Common Market and
Economic Union.
b. The SAARC Visa Exemption Scheme was launched in 1992 to
promote people to people contact. Currently the list includes 24
categories of entitled persons, like, Dignitaries, Judges of higher
courts, Parliamentarians, Senior Officials, Businessmen,
Journalists, and Sportsmen etc.
c. The Meeting of SAARC Ministers of Interior/Home took place on
19 September 2014. Home Minister Rajnath Singh, stressed on
cooperation in countering issues of terrorism, counterfeit
currency, smuggling of narcotic substances, cyber crimes,
human trafficking and illegal movement of arms.
d. He also proposed to establish a SAARC Centre for Good
Governance by inviting administrative officers from all member
nations to discuss methods and innovative ideas pertaining to
development and good governance.