The mid-July Sixth Summit of BRICS in Fortaleza has come out with some concrete results on economic front. Certainly, BRICS has moved beyond the rhetoric of cooperation, unity and mutual respect by taking a firm decision of setting up a BRICS New Development Bank, a move of far reaching significance in international financial sector. However, China has stolen the show by hosting the headquarters of the Bank in Shanghai.
China wanted to show this unity among BRICS partners for projecting its potential leadership of the emerging economies as a second largest economic power, on the strength of which China has a hidden agenda of promoting its strategic designs. With more than half of the total GDP of the BRICS members and very good infrastructure facilities to host the BRICS Bank, China had a natural claim over the decision and desire to take a larger share of the initial seed money of US$ 50 billion, but each member countries pressed upon the need of adhering to the principle of equal sharing. Also, Russia has the same hidden agenda of showing unity among BRICS members to justify its wrongdoings in its neighborhood.
However, it was a consolation prize for India to have been offered the first Presidency of the BRICS New Development Bank for the first five years, but it would be naïve to think that China will not try to dominate the body through its financial muscle in the coming years when requirements for funds will grow immensely.
Raising resources
Considering the requirements of the huge development needs of its partners and also the developing economies US$ 50 billion kitty of the BRICS bank would be considered too small. According to the experts, the BRICS development bank must find ways to raise resources to the extent of many times over the USD 100 billion, sort of seed capital, since the development requirements of the emerging economies are huge requiring big time resources. India alone needs in excess of USD one trillion in infrastructure. The BRICS bank, will surely, tap the global capital market to raise such resources.
Further, the signing of the Treaty for the establishment of the BRICS Contingent Reserve Arrangement (CRA) with an initial size of US$ 100 billion was seen as a good move. This arrangement will have a positive precautionary effect, help countries forestall short-term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements, as was stated in the BRICS Fortaleza declaration.
Though promoting economic cooperation among the BRICS members and through them taking care of the developing economies looks fine but its success will chiefly depend on the cooperation and unity on the geopolitical issues.
The prime step would have been through the dramatic change on the collective stand of the BRICS on the UN Security Council reform. Two of the five members of the BRICS are the permanent members of the UNSC and the rest of the three are the strong aspirants of the UNSC. Yet, the three could not convince two of its powerful associates to express their unequivocal support for the rest of the three India, South Africa and Brazil for finding a permanent place in UNSC.
The Fortaleza declaration has only come out with a hackneyed paragraph on the UNSC reform, “We reaffirm the need for a comprehensive reform of the UN, including its Security Council, with a view to making it more representative, effective and efficient, so that it can adequately respond to global challenges. China and Russia reiterate the importance they attach to Brazil, India and South Africa’s status and role in international affairs and support their aspiration to play a greater role in the UN.” Certainly the two UNSC members of BRICS did not pay heed to Indian Prime Minister’s appeal in his address to the BRICS leaders, “Institutions like the UN Security Council and IMF need urgent reform. They must become more representative and reflect ground realities.”
This shows the extreme lack of mutual trust among the partner countries of BRICS. It would not be totally wrong to assume that members like Russia and China wants to use BRICS to promote their own national interests and do not allow other member countries to claim its genuine place on the international bodies. Riding on the shoulders of BRICS they also have a hidden agenda to use BRICS as shield against western onslaught to protect them from criticism and sanctions relating to Ukraine.
Safeguarding interests
China also wants to safeguards itself against western ganging up on issues relating to South China Sea. Also, there are many issues which bedevil the bilateral relations between the BRICS members especially between India and China and also China’s aggressive stance on the South and East China Sea irks not only India but India’s partners in ASEAN with which India has to maintain working cooperative relations.
Russia’s aggressive territorial ambitions in its neighborhood also irritates India, Brazil and South Africa but the Fortaleza declaration has included only a mild neutral paragraph on Ukraine. The withdrawal of US led NATO forces from Afghanistan has extensive implications for the three neighbors India, Russia and China but they have shirked their responsibility to come out with a solid action plan to prevent the region from slipping into chaos, which will have wide ranging security implications for all the three. Brazil and South Africa may not be directly affected by the upheaval in Afghanistan, but this will have adverse impact on the security situation in South and Central Asia. Russia, China and India are equally worried over the rise of extremist forces led by Taliban and aided by Pakistan but the BRICS statement talks of terrorism in general sense.
The declaration verbatim repeats its previous summit statement on terrorism, “We reiterate our strong condemnation of terrorism in all its forms and manifestations and stress that there can be no justification, whatsoever, for any acts of terrorism, whether based upon ideological, religious, political, racial, ethnic, or any other justification. We call upon all entities to refrain from financing, encouraging, providing training for or otherwise supporting terrorist activities.”
Lack of mutual trust also stems from the fact that three of the BRICS members have very strong democratic credentials, who have formed a separate group, whereas the rest two Russia and China have different political systems which are not very transparent in its international dealings. Three of the BRICS members India, Brazil and South Africa work jointly on a separate forum called IBSA. Earlier China and Russia had made strong bid to convince the IBSA to dissolve their grouping since they are already part of a larger body. The IBSA members call themselves democracies representing the three continents Asia, Africa and South America. Though, the New Delhi summit of IBSA could not be held this year, they have expressed their commitment to continue with the grouping, though they have not been able to project themselves as strong democratic voice in the world.
Unlike the Group of Seven of the western developed countries called the G-7, the group of five called the BRICS has many mutual contradictions in their national interests, whereas the G-7 speaks and shows determination to act with one voice on international issues. The G-7 effectively kicked out Russia on the issue of Ukraine whereas the BRICS could not even think of castigating Russia on Ukraine and China on its unilateral assumption of sovereignty on major portions of South China Sea and declaration of Air Defence Identification Zone over the maritime area. The BRICS members also have competing strategic interests in the area, where India has shown more proximity to the Eastern powers like Japan and South Korea and has shown inclination towards the Rebalancing Asia policy of USA. Ignoring China, Prime Minister Narendra Modi has shown his desire publicly to make his first bilateral visit to Japan, whereas China wants to court India by announcing the visit of President Xi Jinping in September this year.
Lack of mutual trust among major member of BRICS and efforts by China and Russia to prevent India from slipping away to the Western court will find India in great predicament. Though India and Russia has no competing strategic interests to protect and promote, China refuses to tone down its stance on boundary issues with India, which has the potential of creating major problems between the two Asian giants. This has the potential of persisting with deep fissures within BRICS.
