What did the BRICS Summit announce in Brazil?

Last July 14th, 15th and 16th the Brazilian cities of Fortaleza and Brasília hosted the VI BRICS Summit, a group integrated by Brazil, Russia, India, China and South Africa. The bloc is home of almost half of the world’s population and labor force, they occupy around ¼ of the global territory and the countries’ economies have a growing participation in the world’s GDP. Since its creation, the bloc has been playing an important role in debates about economic and financial matters within the G-20 and particularly regarding the governance reform of multilateral financial institutions.

The VI Summit spotlights a new moment for the BRICS group. Based on an agenda oriented by the theme “BRICS – Inclusive Growth: Sustainable solutions” the Heads of State signed in Fortaleza the arrangements for the settlement of the BRICS Development Bank – with headquarters in China and a startup capital of US$ 50 billion. The bank’s resources shall be channeled to governments and the private sector to finance infrastructure and sustainable development projects within the member countries and in other countries, especially in Africa. During the meeting, the countries reached an agreement about the establishment of a Contingency Reserve Arrangement (CRA), a kind of fund to tackle any financial and balance of paymentscrisis the five countries may face in the future.

The Heads of State also attended a meeting in Brasilia with South American presidents, following the same procedure applied with representatives of the African Union during the last BRICS Summit held in Durban, South Africa. This initiative is noteworthy as the BRICS members already play a central role in their own regions and, therefore, the groups’ initiatives are likely to impact and affect the neighboring countries.

The Summit always goes beyond the governments’ official meetings. Last March, Rio de Janeiro hosted an Academic Forum and on July 14, a Business Forum took place in Fortaleza. To this later meeting, businessman from a range of economic sectors such as agribusiness, mining, energy and green economy, infrastructure attended. A declaration by the president of the Business Council about the meeting can be found here. Parallel to the official meetings, Fortaleza also hosted a Trade Union Forum and a Social Summit. More information about these two latter events can be found here and here.

The BRICS countries themselves, and their action through a bank whose mandate is to finance infrastructure and sustainable development projects, demand monitoring and pressure from society. In order to influence the bank’s institutional framework to allow it to finance truly sustainable projects from a social, environmental, economic and climate point of view, it is important to demand an official position of these Head of States about what they understand and conceive by ‘sustainable development’ and which will be the criteria that shall be adopted to verify the sustainability of the prospective projects to be funded by the bank. The profile of some of the bloc’s countries, regarding their energy matrix based on fossil fuel exploitation, high GHG emission levels, intensive natural resource exploitation, social inequalities and human and territorial rights violations, suggests that the BRICS group shall face many challenges, individually and in their collective actions, towards advancing a more socially and environmental sustainable development. For more information about the results of these events, please check our analysis about the Fortaleza’s and Brasilia’s negotiations that shall be published here soon.

This is an updated version of the note published on July 11th.

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