The analysis of the Ufa declaration and other summit documents shows that the areas of BRICS cooperation on economic, development, political and humanitarian issues have considerably broadened. The next challenge is to translate these words into deeds.

Russian President Vladimir Putin walks during a welcome ceremony in Ufa, Thursday, July 9, 2015. Ufa hosts the Shanghai Cooperation Organization (SCO) and BRICS (Brazil, Russia, India, China and South Africa) summits. Photo: RIA Novosti Pool via AP

The Ufa summit, despite pessimistic expectations, became a milestone in turning the BRICS into a permanent feature of global policies. Why the initial  pessimism? It was based on the logic that for the first time in the BRICS summit’s history one of its members - Russia - is in open confrontation with the U.S.-led West, still the dominant power in today’s world. And another member - China - is causing increased frustration in the U.S. by its assertive policy.

At the same time, the three other members of the BRICS are not willing to spoil their relations with the West, although they share the BRICS’ goals of reforming global governance, especially the financial and economic architecture, to provide a fairer role for rising powers. They see BRICS as a powerful instrument for that. So the expectations were high.

Would Ufa bring about a divide in the BRICS (something that was much hoped for in the West)? Or would the summit become a game-changer, the beginning of an era of the “bi-governed” world, with two competing blocs, the West and the BRICS-led developing world, formulating the global agenda?

The Ufa summit was neither, although it turned to be a big diplomatic success for Russia. Under a Western “siege,” Russia demonstrated the absence of isolation and managed to initiate measures that are, in fact, leading the way to a new Eurasian security structure. Coupling the BRICS summit with the SCO summit helped include the BRICS in a dialogue with other Eurasian countries that are gravitating to each other, while at the same time, establishing their relationship to the new grouping around the SCO.

The SCO, which is focused on security, in the meantime, by including India and Pakistan, is evolving as a Eurasian, non-West dominated platform for regional security issues – some call it a blueprint for an Asian “collective security system,” long advocated by Russia.

Read the Q&A with Fyodor Lukyanov: "The BRICS may be non-Western but they are not anti-Western"

However, it does not by itself mean that the BRICS became more anti-Western. On the contrary, BRICS leaders in Ufa tried their best to prove they want to see the West as a partner, rather than a competitor. Will the West reciprocate or will it prefer to see the BRICS as a threat to its privileges in the global system, less and less reflecting the current balance of power?

In a worst-case scenario, (unfortunately, not so unrealistic), the U.S. could try to undermine the BRICS by seeding conflicts among its members as well as confronting the members one by one. Some U.S.-initiated  projects, such as area  agreements that attempt to establish a separate regime for trade in services, such as TiSA, TPP and TTIP, seek to create “separate closed areas” and “separate rules of the game.” As a result, they can be interpreted as measures of an anti-BRICS character, to some degree or another.

The main achievements of the BRICS are so far in the financial and economic sphere. The first BRICS summit in Russia in 2009 stated as the common goal the reform of international financial institutions, so as to reflect changes in the world economy to achieve the greater voice and representation of developing countries in international financial institutions. They emphasized their heads and senior leadership should be appointed through an open, transparent, and merit-based selection process.

However, the attempts to change the existing, West-dominated financial architecture have failed. Despite the approval of the 2010 reform package of International Monetary Fund (IMF), which provides for the increase in its quota resources and the revision of quotas and voting power in  favor of developing countries and emerging markets, the U.S. Congress blocks reform of the IMF, which, along with the World Bank, remain the instruments of dictating policy to the emerging economies.

BRICS leaders in Ufa expressed “ deep disappointment” with the prolonged failure by the United  States to ratify the agreement and urged the U.S. to ratify the 2010 reforms by mid-September 2015 as agreed. However, the chances for that are slim.

So the BRICS, although not abandoning the goal of reforming theBretton-Woods system, have decided to create a parallel one, and this undertaking in 2015 can boast spectacular results. Having gathered in Ufa, the leaders noted with satisfaction the creation and practical start of work of the New Development Bank (NDB) and creation of the BRICS Contingent Reserve Arrangement (CRA). These allow its members to provide mutual financial support as a valuable contribution to the global financial safety net. Thus, they stressed that both institutions (the NDB and the CRA) are not a substitute to the existing system, but rather an addition to it, expressing hope for cooperation with established global institutions.

NDB is  an open structure, which is ready to attract new members, although equal voting power will remain with the BRICS countries. If we look at the China-created (and dominated) Asia Infrastructure Investment Bank, where more than 50 countries rushed to have their share, as any sort of guidance, it can be predicted that the NDB would be of interest to the international investors as well, being not a regional, but a global bank.

It will be used mostly for financing infrastructure investment and sustainable development projects in the  BRICS and other developing countries and emerging market economies and for enhancing economic cooperation between these countries. What is important, these projects probably would have no alternative to get financing from established international banks, giving the new bank a unique role in directing development and economic strategy in the non-Western world. The bank is supposed to approve its first loans by the beginning of next year.

The CRA, however, should not be perceived as an “anti-IMF” agent, as it is comparatively small and is supposed to be used only in emergencies, having no institutional bureaucracy such as the IMF has. It can be perceived as complimentary to the IMF and generally falls into the category of regional swap deals like the Chiang Mai Initiative (a multilateral currency swap arrangement among the ten members of the ASEAN, China, and South Korea,  launched in 2010 and expanded to $240 billion in 2012) which is bigger than the BRICS CRA.

However, it is important for BRICS countries’ independence from the IMF and also can be useful for increase in usage if BRICS national currencies (one suggestion is that the reserves should be nominated in something like Special Drawing Rights in the IMF – virtual currency units, based on the basket of BRICS currencies).

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The analysis of the Ufa declaration and other summit documents shows that the areas of BRICS cooperation, on economic, development, political and humanitarian issues, have considerably broadened. However, so far the cooperation limits itself to discussions, finding common points of view (which is not easy given the countries’ differences), and charting strategies and plans, rather than implementing practical measures.

Maybe this is a necessary “zero” stage, but the success of the BRICS would lie in realization of practical steps, visible for societies, not only governments, and rising accountability. For that, a certain degree of institutionalization seems needed (the joint Internet portal, agreed upon in Ufa, can be seen as a first step). However, it is too early to expand the BRICS. First a mechanism of cooperation should be worked out and start to function smoothly. At the same time, aspiring countries (and there are several) should be given “observer” or “partner for dialogue” status.

The opinion of the author may not necessarily reflect the position of Russia Direct or its staff.