Round The World
New
Delhi, 3 April 2012
BRICS and Brickbats
REMAINING A SALAD
BOWL
By Shreya Upadhyay
Research Scholar,
School of International Studies (JNU)
Yet another year has gone by for the
fancy ‘clubbing five’ emerging powers with mother-hood statements and photo ops.
Who otherwise remain a disparate group vying for a higher seat at the global
power table.
However, the fourth BRICS (Brazil,
Russia, India, China and South Africa) Summit
held recently in New Delhi did provide a common thread for Member nations to repudiate
the West for financial mismanagement, hinted at backing an alternate candidate
for the World Bank President-ship and urged a peaceful solution to the Iran and
Syrian crisis.
True, while the five leaders pledged
to focus on mutual trade and economic development issues and advocated faster
reforms of the Western-dominated global financial system to the needs of the
developing world, they failed to ink any agreement on the tangible and the most
discussed goal of establishing a new development agency challenging the World
Bank, owing to differences between them.
Pertinently, BRICS got its name from
Goldman Sachs that predicted in 2001 that Brazil,
India, Russia and China would drive economic growth
in the 21stcentury. South
Africa was a late entrée in the group.
Representing 43 per cent of the world’s population, 18 per cent of global trade
and attracting 53 per cent of global financial capital, the group poses an
unwelcome challenge to the US-dominated Security Council, IMF and World Bank.
Importantly, the five countries criticised
the slow pace of reforms in the IMF and called for modified international
financial institutions reflecting the present global patterns of power. They
also blamed the West for generating excessive liquidity in the global financial
system as part of its strategy to boost local financial activity and noted the
risks posed by volatile food and energy prices to world economy.
Further, the leaders agreed to
invest more in the United Nations Conference on Trade &Development (UNCTAD)
which played a major role in catering to the interests of developing countries.
On Afghanistan, BRICS exhorted the
international community to stay the course on the development front for at
least 10 years after the West withdraws most of its combat troops by 2014-end
and noted the need for checking narcotic trafficking.
Undoubtedly, the most concrete
outcome expected and deliberated in the
run-up to the Summit was the creation of a South-South Development Bank billed
as an alternative to existing global lending agencies for disbursing funds to
core sector projects within the five-nation grouping and other emerging economies.
If implemented, the agency could coordinate foreign assistance and gradually
diminish the global South’s reliance on the whims of the currently
under-regulated international financial system.
But, the move which was a Chinese
initiative has been postponed and instead a high-level working group been
formed to examine the issue and report back at the next meet. Undeniably, this
shows the fissures within the group to float a mutual initiative of this kind. India is skeptical that such an institution
would essentially be a Chinese bank due to the financial depth Beijing enjoys. While South
Africa supports the move, Brazil is already funding the Latin
American Development Bank.
In fact, Prime Minister Manmohan
Singh preferred improvements in the World Bank. Also, the Summit only hinted at supporting an
alternative choice against the Obama Administration’s nominated Korean American
Jim Yong Kim to lead the World Bank, by stating that the “institution should
have a governance structure that reflects current economic and political
reality and that the leadership selection should be done through an open and merit-based
process.”
Moreover, the leaders did not
attempt to find a consensus candidate in this regard. Two candidates from
emerging-market countries, Nigerian Finance Minister Ngozi Okonjo-Iweala and
former Colombian Finance Minister Jose Antonio Ocampo, have however been
nominated along with Kim to take over when current President Robert Zoellick
steps down in June.
In addition, BRICS signed agreements
to enable greater use of local currencies, rather than the US dollar in trade
among member countries to reduce transaction costs. The move is seen to be
replacing the use of the dollar. But, the members are cautious as this would
only legitimise Chinese currency overseas.
Moving beyond economics, the leaders
also focused on world politics by pointing to Iran’s right to the peaceful use of
nuclear energy. The declaration stressed that military action in this regard
was unacceptable and the group was not bound by a looming ban on Iran's oil exports.
Notwithstanding, this has much to do with individual nations’ zealous attempts to
guard their energy security needs.
Both India
and China, together import
about one million barrels a day from Iran,
which amounts to 40 per cent of Tehran’s
total export of 2.5 million barrels per day. Predictably, they are wary of a volatile
international situation.
The Summit
also supported the Arab League and special envoy Kofi Annan’s peace plan in Syria opposing
violence as a way of resolving a political crisis. Notably, on earlier
occasions, BRICS has failed to reach a common position on Syria. As Russia and China
have twice vetoed resolutions against the Assad regime, while India, South
Africa, and Brazil have either voted in favour
or have not voted at all.
There are other deep seated
differences among the BRICS nations. One, the India-China geo-political rivalry
and Russia and China
stand-off. Beijing is currently the leader in
the pack, much to New Delhi and Moscow’s discomfort. Besides, there is
divergence with Beijing
on the value of the Chinese currency and trading practices. Brazil and India
have problems with China
being an importer of raw materials and inputs rather than of manufacturing
products leading to a huge trade deficit with China.
Russia, Brazil
and India
desire the emergence of a multi-polar international system in which they are
major actors. On the other hand, China
aims for a bi-polar world in which it serves as the counter-balance to the US. As it
stands, India and Brazil have
been seeking membership in an expanded UN Security Council. In contrast, Beijing has so far opposed India's bid for a permanent Security
Council seat.
Furthermore, all have been striving to
maintain diplomatic and economic ties with the US, rather than engage among
themselves. Trade is the only exception where China rules the roost.
Yet BRICS does share a number of
concerns regarding Western policies, changing economic environment, US and
Europe policies on Iran, Af-Pak
policies that affects China,
Russia and India
specifically and on climate change. But presently, BRICS is more concerned about
development and growth in their own countries.
Unfortunately, domestic issues too
cast a shadow on the Summit.
Brazilian President Dilma Rouseff is still trying to finding her feet, Russia witnessed a controversial election and China is undergoing
a leadership transition. India
too is facing governance issues, chaotic coalition politics, corruption, poor
human development index records and low per capita income.
In
sum, the only common agenda for BRICS is their open animus against the US, West and
the institutions they head. Contrary to hopes that BRICS would showcase the developing world’s aspirations
and fill the leadership vacuum as Western powers reel under their economic
problems, sadly, this coalition is likely to remain a
salad bowl with members coming together periodically to demand greater
representation in established institutions such as IMF and World Bank but
otherwise stay divisive when it comes to other policy matters. ----- INFA
(Copyright,
India News and Feature Alliance)
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