BRICS summit: the charming effect on global politics

The continuity in BRICS summits and the current economic primacy of the BRICS grouping suggests that the global politics is entering a new phase of power politics, with the developing world taking the lead in the global decision-making process. The New Delhi summit, which concluded on 29 March, gives clear indication of this.

Like the previous summits, the 2012 New Delhi summit attracted considerable media attention globally. While critics reject the very existence of BRICS, noting that it is merely a combination of the Goldman Sachs acronym, economists and developmental theorists from the third world argue that the rise and progress of BRICS is a narration of the diversified and multipolar political order. While the Western media discard the importance of BRICS, stating that powers like China and India will never think alike, the dialogue in the developing world has also not been very forthcoming, given the BRICS members’ differentiation in their political and social systems, and particularly in foreign policy objectives. True, coordinating policy in a rapidly evolving multipolar world order is not easy, especially given the divergent worldviews between China and India. Yet the very existence of BRICS and its progressive character in discussing political concerns over a range of global issues are vital to developing-world politics, suggesting that BRICS will be playing a bigger role in world politics in times to come.

A review and an analysis of BRICS “joint statements” and “joint declarations” suggests that BRICS is rapidly getting institutionalized as a developing-world club. Though the first two Joint Statements released in 2009 and 2010 were akin to toddling efforts, as BRIC was at a conceptual level at that time, the Sanya and New Delhi declarations explain the vitality and import of this grouping in global politics. The New Delhi summit was undoubtedly a way forward in institutionalizing the grouping further in an evolving multipolar world order.

The Delhi Declaration not only tries to actualize some of the stated themes of the Sanya summit, but also indicates new action plans, stating the future objectives of BRICS. It also raises the scope for bigger powers like China, India and Russia to rationalize a credible political understanding, and to ponder whether the time has come to overcome the existing political misunderstandings among them and forge a credible union which can be useful for global governance, where they will have a better influence in both the North-South and South-South spectrum. This is particularly vital at a time when the US is forging a Trans-Pacific Partnership (TPP), taking along diverse economies from both Asia and the Asia-Pacific region.

BRICS has always highlighted the significance of G-20 in global economic governance. While the 2009 Yekaterinburg (Russia) summit exclusively acknowledged the central role of G-20 summits in dealing with the global financial crisis, the Brasilia Summit in 2010 highlighted the G-20 members’ contribution to IMF resources. The New Delhi summit too pointed out the “primary role of the G20 as a premier forum” for global economic cooperation. The major powers in BRICS like China, India and Russia must prepare a constructive demand draft to increase the pressure to reform the global financial architecture, and increase the voting rights of China and India, realigning the architecture which is currently more favorable to the USA and the EU. Russia could take a lead in this regard as it is all set to take over the Presidency of G20 in 2013.

While expressing concern about the “slow pace of quota and governance reforms in the IMF”, the Delhi declaration calls for a comprehensive review of the quota formula for the developing countries in the global financial bodies. Low voting rights at the IMF are not in favor of countries like India and Brazil as they look for a permanent berth at the UN Security Council (UNSC). Reform of G7 is also stagnating. In the prevailing circumstances, the unanimous BRICS call for reforming the IMF is an important development.

Politically, the BRICS members may not ever get united as they have different political systems and social diversities. However, the New Delhi BRICS summit did indicate that difference of opinion is not always a result of differences in perception.  For example, on Iran, India’s stance could be different from that of China and Russia, but their common stand on Iran in the New Delhi BRICS summit will have a lasting effect on global politics, at least over the US which seems to have taken India for granted on many pressing global issues because of the recent progress and vitality of Indo-US relations. About the Syrian crisis, BRICS also collectively expressed the view that a solution to the crisis lies in “dialogue”.

The common understanding in BRICS on such issues is a huge political statement, with direct implications for the global politics. First, it raises the hope in Iran and Syria that there are influential groupings and powers on the globe which support their cause and interests. Second, the collective stance by BRICS indicated that the US cannot act unilaterally, and should propose and follow diplomatic procedures and thrust on dialogue rather than unilateral actions. Third, the BRICS united understanding on Iran and Syria indicates that it is possible to converge on foreign policy issues even if the BRICS members’ foreign policy objectives and interests may not entirely be in harmony. Fourth, BRICS is not entirely an economic entity; it carries certain political clout that is central to the current global political outlook.

BRICS is indeed emerging as a credible multilateral grouping that will be vital for the global politics in times to come. Yet, the current limitation of BRICS is that it neither represents a political coalition nor is showing much interest in taking a lead on greater global geo-political and strategic issues. The BRICS countries need to forge their views on key political issues, since China, India and Russia are still main decision-makers of global strategic issues, notably in the context when both Russia and China are among the Permanent Five (P-5) countries in the UNSC. On global pressing issues like Iran, North Korea and Syria, BRICS needs to show clarity and forge a pressing understanding.

The opportunities for BRICS are many; equally, the challenges are big. The immediate thrust should be on the promotion of intra-BRICS trade and setting up a formal BRICS platform through a secretariat, where economic and political sensitivities could be discussed. As the recent BRICS summit has indicated, the developmental banks of BRICS countries could take up a first call to formalize and establish understanding (a) in extending credit facility in local currency, and (b) in the multilateral letter of credit confirmation facility agreement. The proposal to extend credit facility in local currency is a momentous step, as it intends to reduce the demand for fully convertible currencies for transactions among BRICS nations. This will directly help in reducing transaction costs; as will the credit confirmation facility.

The Delhi declaration and the 2012 New Delhi BRICS summit will be remembered more as a progressive political statement for a new world order and politics. Politically, the BRICS members’ elite understanding and perspective on the issues of Iran and Syria are a positive indicator of how the emerging economies are forging a united political stand on key global issues. The BRICS call on the IMF, World Bank, and on the global markets also puts BRICS in a different league. The demand for reforming the IMF quota as being necessary for the “legitimacy and effectiveness of the Fund” is a notable stance. The call to have a President in the World Bank from the developing world is equally distinctive. There was also a united call to pressurize the advanced economies to “adopt responsible macroeconomic and financial policies” to avoid creating excessive global liquidity. These are huge political statements, and the target is to limit and restrict the American and European supremacy in the global financial architecture. Though it is not going to be easy to curb the Western dominance in the global financial institutions, the New Delhi summit does indicate that the process and the attempt from developing countries has already started in this direction.

Dr. Jagannath P. Panda is Research Fellow at the Institute for Defence Studies and Analyses (IDSA), New Delhi; and currently a Carole Weinstein programme Visiting Faculty at the Dept. of Political Science, University of Richmond and a visiting scholar at the ACDIS programme of the University of Illinois in Urbana Champaign, USA.

All rights reserved by Rossiyskaya Gazeta.