RESEARCH PAPER

PRESENTATION
Title: The Rise of BRICS and the Shift Toward a Multipolar
Financial World Order
Symbiosis Centre for Management Studies,Pune
AUTHORS

RAGHAV GUPTA

NEHA NARAYAN

SHREYA PYNE
 1
INTRODUCTION
BRICS was formed in early 2000s as a result of discontent with western led
financial institutions, as their policies seemed to favour the interest of
western powers while often compromising that of emerging economies. The
main question this paper addresses is: “How is BRICS facilitating a shift
toward a multipolar financial order, and what are the implications for global
financial stability and governance?” The study answers this question by
providing an unbiased analysis of the BRICS’ alternative development policies
and their benefits as well as limitations.
 SIGNIFICANCE OF THE STUDY 2
This study is important because it unveils how BRICS could redefine global financial
dynamics, a subject relevant today more than ever as the world’s focus is shifting more
and more towards emerging economies. With BRICS becoming ever more powerful and
diverse, its efforts are a direct challenge to the status quo financial power of the West.
This ongoing shift from western dominance to a multipolar financial landscape has
implications for financial governance, FDI patterns and global trade.
BRICS is presenting new growth pathways for emerging economies that avoid Western
dictated terms. This approach has the potential to increase economic and financial
inclusivity across the globe. However, it is also important for BRICS to overcome
challenges including disparate internal economic interests and geopolitical disputes.
 LITERATURE REVIEW 3
1)Global Times Article on BRICS Financial Strategy states that BRICS is trying to step sway from the
dollar to become more financially self-sufficient and to find growth avenues without the power of west
led financial institutions.

2)An article by Committee for the Abolition of Illegitimate Debt (CADTM) entitled “Are the BRICS and
their New Development Bank Offering Alternatives to the World Bank?”, reviewed NDB and confirmed
its benefits for the member countries of BRICS, while also throwing light on how economic disparities
and an already established dependency on IMF and World bank can pose as challenges in achieving the
long-term goal of BRICS.

3)East Asia Forum’s Article “The NDB and BRICS in Global Governance Reform” explores how BRICS is
attempting to reform global governance through the New Development Bank (NDB), emphasizing its
role in financing sustainable development and South-South cooperation. By offering an inclusive,
conditionality-free alternative to Western financial models, the NDB positions itself as a driver of
global financial reform for less developed nations.
 METHODOLOGY 4
1)Research Design- A qualitative research design has been chosen for this
study, as it is best suited to analysing strategic, political and economic
facets of BRICS. This study is a descriptive and exploratory analysis, aimed
at identifying patterns in the financial strategies laid out by BRICS and
BRICS plus to include other countries and lead the global financial system
towards multipolarity.
2)Data Collection Methods- the data used in this study has been derived
from secondary sources:
(i)Academic Articles and Research Papers
(ii)Institutional Reports and Publications
(iii)News Outlets and policy Analysis
 LIMITATIONS 5

This study acknowledges certain limitations:

1)Dependency on secondary sources- this research is based on secondary data
sources and does not have first hand information or insights into what BRICS policy
makers would say to the questions this study aims to address.
2)Potential for Bias in Media and Institutional Publications- news outlets and
websites may have incentive to reflect one-sided perspectives on BRICS policies and
strategies.
3)Dynamic Nature of BRICS- The paper’s findings rest on the current situation and
BRICS an ever-evolving coalition. This could, with the passage of time, cause
discrepancies between the findings and the actual state of BRICS policies.
 BRICS AND ITS FINANCIAL INSTITUTIONS 6
1. The New Development Bank (NDB)- Launched in 2014 and headquartered in
Shanghai, China, the NDB serves as the primary funding instrument for BRICS,
promoting south-south cooperation and economic independence. Unlike the IMF and
World Bank, it employs an equal voting system, ensuring parity among member
nations. The NDB funds renewable energy, transportation, and infrastructure projects
with fewer restrictions and conditions.
2.The Contingent Reserve Arrangement (CRA)- Established in 2015, the CRA provides a
financial safety net for BRICS members during short-term liquidity or balance of
payment challenges. It offers emergency funds proportional to contributions, allowing
members to withdraw up to 30% of their quota without conditions, reinforcing BRICS’
vision of an autonomous, multipolar financial system.
BRICS STRATEGIES FOR FINANCIAL MULTIPOLARITY 7
BRICS has increased investment in infrastructure, energy and technology across
Asia, Africa and Latin America. The New Development Bank (NDB) supports several
regional development projects including Brazil’s renewable energy initiatives,
India’s metro expansions and China’s Belt and Road initiative. All these projects
are meant to enhance regional connectivity and self-sufficiency, thus aligning
with BRICS’ goals of independence from the western influence.
BRICS has made a remarkable shift towards conducting trade in local currencies.
China and Brazil recently agreed to settle their trades in yuan and real. Countries
have also considered to employ the Ruble and the Rupee for trading in energy and
Défense. All these changes are a testimony to BRICS aim of De-dollarizing trade.
 IMPACT ON GLOBAL FINANCIAL FLOWS 8

BRICS is becoming increasingly instrumental in directing investment

flows towards emergent economies by establishing more liberal
financial organizations. NDB has been facilitating this flow by
providing loans on highly flexible terms. Furthermore, BRICS, unlike
most other countries, provides loans to its members in local currencies
instead of the U.S dollar, to avoid potential exchange rate fluctuations.
As a result, the flow of capital is now slowly moving towards areas
which were not always adequately covered by finance
 INTERNAL CHALLENGES FOR BRICS 9

BRICS is confronted with significant challenges in decision making due to

differences in its members’ economic and regional interests. China’s economy
is an based on its industries. In contrast to this, Brazil has an agrarian economy
exposing it to price fluctuation risks. India, although has diversified its
economic activities, faces issues due to poor infrastructure. These disparities
lead to differing development priorities, complicating policy alignment.
Political tensions also strain unity. India and China’s border disputes and
Russia’s actions in Ukraine increase chances of a political divide. Such
differences weaken BRICS’ strategic coordination and diminish its impact on
global decision-making.
 EXTERNAL CHALLENGES FOR BRICS 10

The U.S and other Western countries are constantly formulating financial
and trade strategies to neutralize BRICS’ actions. For example, IMF and
the World bank are restructuring their lending model to retain
dominance. There are also attempts to develop relations with countries
across the globe to stop them from joining BRICS.
External critics believe that though BRICS-led projects are large scale
and have tremendous potential, they are not sustainable, due to the
huge capital investments, distant revenues, and potential risks due to
political instabilities and economic fluctuations.
 FUTURE SCENARIOS FOR GLOBAL FINANCE 11
Expansion of local currency use and BRICS efforts to establish their own
payment system as a substitute for SWIFT could help the members of
BRICS as well as other countries to substantially reduce their dependence
on the U.S. dollar as well as the IMF & World Bank. Increasing influence of
BRICS could lead to a rise in south-south flow of capital with Africa and
Latin America, facilitating decrease in poverty and improvement in
infrastructure in emerging economies.
Furthermore, addition of Argentina, Saudi Arabia and other countries in
the future under a BRICS+ regime would lead the global financial
landscape to greater multipolarity by combining a larger proportion of the
world’s population and resources.
 RECOMMENDATIONS 12
·Address economic inequality among members and formulate a win-win
cooperation by integrating the competitive advantages of existing
members.
·Expand membership criteria for new members to align with BRICS’
economic plans
·Include energy-intensive countries like Saudi Arabia to strengthen the
bloc’s energy security strategy.
·Prioritize sustainability by maintaining sustainability as a central agenda
for BRICS, increasing renewable energy projects and focusing on projects
that promote economic growth while preserving the environment.
·Promote initiatives to unify Africa into a powerful economic block.
 CONCLUSION 13
BRICS nations (Brazil, Russia, India, China, and South Africa) have come far in
establishing a multipolar global financial framework. Initiatives like the New
Development Bank (NDB) and the Contingent Reserve Arrangement (CRA) offer
alternative models for development financing, operating independently of
Western institutions like the IMF and World Bank. Additionally, BRICS has
advanced efforts to reduce reliance on the US dollar by promoting trade
agreements in local currencies and exploring the creation of a BRICS-specific
payment system, potentially involving digital currency.
These initiatives aim to foster economic independence and support sustainable
growth in developing economies. However, internal challenges such as
economic inequality among members, political instability, and external
pressures from Western nations pose significant obstacles to BRICS’ long-term
success and cohesion.
THANK YOU