The BRICS Summit returned to Brazil after five years — as per the rotational nature of venues among the five member States — this week (13 and 14 November). Prime Minister Narendra Modi was in attendance and so too were presidents Xi Jinping, Vladimir Putin, Jair Bolsonaro and Cyril Ramaphosa, with their respective contingents in tow.
As per the joint statement, dubbed the 'Brasilia Declaration', signed by the five leaders, discussions were held on a whole host of themes including, but not limited to, climate change, security, trade, technological innovation, counter-terrorism, investment and culture.
Ahead of his return to India, Modi tweeted:
The BRICS Summit in Brazil has been a very productive one. We had fruitful dialogues on cementing ties in trade, innovation, technology and culture.
The focus on futuristic subjects will surely lead to deeper cooperation that will benefit the people of our respective nations. pic.twitter.com/nyLXRCX7J3
— Narendra Modi (@narendramodi) November 14, 2019
If the "focus on futuristic subjects" sounds vague, it's probably appropriate because the purpose and raison d'être of the BRICS grouping itself is just as hazy. The story of the group's inception is well-known, but for the uninitiated, here's a swift recap:
Goldman Sachs' Jim O'Neill wrote in 2001 of Brazil, Russia, India and China (collectively dubbed the BRICs; South Africa would be added in 2010, thereby capitalising the lowercase 's' at the end of the original acronym) being emerging economies to watch out for. At some point, the quartet decided it would be a fine idea to come together as a bloc to counter the West-dominated Bretton Woods institutions like the International Monetary Fund and World Bank.
Within a few years — in 2012, to be precise — India proposed the establishment of a development bank "for mobilising resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, to supplement the existing efforts of multilateral and regional financial institutions for global growth and development".
The bank saw the light of day as the New Development Bank (NDB) in Fortaleza in 2014. While there have been agreements and Memorandum of Understanding (MoUs) signed on a whole variety of topics since the grouping came to be, the NDB was arguably the most significant development. After all, one of the major reasons for these countries to come together was to provide an alternative to the existing global financial architecture.
Is BRICS relevant?
"It is not obvious to me what the [New Development] Bank's real purpose is," said the man responsible for coining 80 percent of the acronym in a 2018 interview.
In the five years since the NDB was born, its key vision to 'supplement the existing efforts of multilateral and regional financial institutions for global growth and development' remains miles away from realisation. "So far the only members are its founders; observers find its criteria for choosing investments vague; and even controversial Amazon road paving can get the NDB's 'sustainable' stamp," notes a China Dialogue piece.
It goes on to list a lack of transparency and good governance, coupled with the up-and-down relations among member States as being among the other problems with the bank. However, it could and should be argued that the bank is still very young and must be given time to grow and ultimately make good on its mandate.
The real problem isn't the bank per se; it's the grouping responsible for birthing it that is.
In the interview last year O'Neill commented on the grouping, saying, "It is not obvious to me that they have done a lot to improve the outcomes of their own countries from what would have happened any how... What is the point of getting on the plane all the time to go to these different countries – just for the sake of it. Other than annoy America."
There are three major factors that threaten the relevance of the BRICS grouping and render it just another multilateral grouping in an already bloated set of groupings:
Politically, these countries are not all on the same page at the same time. While India and Russia share historically close ties, India-China relations experience swing from warm to frosty and back like a pendulum. Russia and China have been united by a common adversary. US-led West-imposed sanctions on Russia and Washington and Beijing's trade war have pushed the world's second and third largest military powers closer together.
Elsewhere, Brazilian president Jair Bolsonaro, who ran his election campaign in 2018 as a fierce critic of China, has done a complete volte face. He, however, remains a self-proclaimed fan of US president Donald Trump — something that won't have gone unnoticed in Beijing or Moscow. South Africa is the only country with no discernible beef with any of the other BRICS members. At the same time, none of the four other countries are among its closest partners either.
Economically too, there isn't much convergence. From being four economies to watch out for back in 2001, they (along with South Africa) are all in the middle of some sort of economic doldrums. But the reasons for the states of these economies vary vastly. In fact, as this article notes, the economic trajectories followed by these countries also vary: "BRICS can be broken into two groups — those that took advantage of globalisation's march to integrate themselves into global supply chains (primarily China and India) and those that took advantage of globalisation to sell their abundant natural resources (primarily Brazil, Russia and South Africa)." As it stands, there isn't one solution to fix all their problems. In fact, they tend to often make matters worse for each other.
The latest instance of this came in the form of Xi's remarks at the summit that "Protectionist and bullying counter-currents bring shocks to international trade, adding to downward pressure on the world economy". Ostensibly aimed at the US, this (the 'protectionist' part, in particular) can also be seen as a thinly-veiled jab at India, which earlier this month opted out of the Regional Comprehensive Economic Partnership (RCEP). The RCEP includes all 10 members of ASEAN, Australia, China, Japan, New Zealand, and South Korea.
Compounding matters is the unclear nature of the group as it exists. BRICS is a non-regional grouping that has began as a bloc of emerging economies joining hands for economic purposes. It has transformed into an amorphous collective with its fingers in all sorts of pies, but an inability to commit to very many common goals. A case in point in this regard is terrorism. In 2016, it was noted that successive declarations by the BRICS nations tended to echo the same throwaway lines on terrorism, but do little about assuaging one another's real concerns. The 2019 iteration is no different with its "We condemn terrorism in all its forms and manifestations, which should not be associated with any religion, nationality or civilisation...". Through it all, China continues to show brazen disregard to India's concerns about terrorism emanating from Pakistan. This is unlikely to change anytime soon.
A small positive, if that, is that it gives India one more mechanism, occasion and opportunity to hold dialogue with China. There may be little tangible movement in India-China ties, however, if diplomacy is to work, sustained interaction between parties is essential. A counterpoint to this point, however, is that India and China already have several points of contact bilaterally and multilaterally (at the UN, Shanghai Cooperation Organisation, G20, East Asia Summit and so on), and that one extra platform isn't going to make a whole lot of difference.
Perhaps that is true, but the glorified talk-shop that discusses "futuristic subjects" that is BRICS will continue to exist despite its irrelevance, and any little benefits it affords should be appreciated.
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Updated Date: Nov 15, 2019 17:55:40 IST