BRICS Challenges the World Order

BRICS Challenges the World Order

The sight of the BRICS has been an eyesore for the developed countries ever since its inception. The sense of irritability has now given way to disquiet bordering on hostility. There is a compelling urgency that BRICS is assuming habitation and a name.

True, nothing of an earth-shaking nature has emerged from the New Delhi summit. Yet, there are new stirrings that herald the potential for a BRICS surge. And that causes disquiet to the developed world.

Simply put, as the Delhi Declaration by the BRICS countries reminds is, it is a “platform for dialogue and cooperation amongst countries that represent 43% of the world’s population” in a multi-polar world. That is saying a lot.

There is nothing like BRICS in the developed world today. The G-7 has become a relic of history. The view across the Atlantic is dismal, with Europe and the United States struggling with their respective economic crisis, discarding pretensions that they are world champions.

The Delhi Declaration makes an undisguised bid for strengthened representation of emerging and developing countries in the institutions of global governance”. This is no vacuous claim. Because, BRICS also has a special experience to share – having “recovered quickly from the global crisis.” The West has not heard this sort of idiom before. This is not the global South asking plaintively for “more”. This is an open demand for “power sharing”.

The West has never been spoken to like this before in all these centuries since the Industrial Revolution. The tides of history are, clearly, turning. The Delhi Declaration suggests: “We believe that it is critical for advanced economies to adopt responsible macroeconomic and financial policies, avoid creating excessive global liquidity and undertake structural reforms to lift growth that create jobs. We draw attention to the risks of large and volatile cross-border capital flows being faced by the emerging economies. We call for further international financial regulatory oversight and reform, strengthening policy coordination and financial regulation and supervision cooperation, and promoting the sound development of global financial markets and banking systems.”

The developing world has never before admonished the developed world in such fashion. The BRICS has asserted its credentials to make this demand since it represents economies that are having broad-based economic growth and are “significant contributors to global recovery.”

The Delhi Declaration goes on to criticize the slow pace of quota and governance reforms in the International Monetary Fund and in the functioning of the World Bank and questions the West’s prerogative to head these institutions. Significantly, BRICS is raising its voice even as Russia is preparing to assume the Presidency of the G20 in 2013.

One concrete outcome of the Delhi summit is the agreement to consider the possibility of setting up a new Development Bank for mobilizing resources for infrastructure and sustainable development projects in BRICS and other developing countries to “supplement” the role of the World Bank and other regional financial institutions.

The idea is to shake off the continued dominance of the developed countries over these financial institutions. Ideally, what the World Bank and the whole network of existing regional development banks would prefer is to continue to use the BRICS money and keep the existing pattern of western hegemony. Whereas, a BRICS bank will threaten the entrenched western practice to use the international financial institutions to prescribe and impose economic policies to the developing countries thereby promote the commercial interests of the developed countries and even establish political hegemony.

The implications are far-reaching for the geopolitics of Africa, in particular. The Delhi summit has sought a report on the setting up of a development bank by the next annual BRICS summit in South Africa. Interestingly, South Africa is representing the voice of the African continent within BRICS.

Again, Russia’s entry into the World Trade Organization would phenomenally change the BRICS’ capacity (and political will) to safeguard the rule-based multilateral trading system and influence a successful and balanced outcome of the Doha Round.

Equally, the Delhi summit witnessed the conclusion of the Master Agreement on Extending Credit Facility in Local Currency under BRICS Interbank Cooperation Mechanism and the Multilateral Letter of Credit Confirmation Facility Agreement between our EXIM/Development Banks. Without doubt, these are going to be useful enabling instruments for promoting intra-BRICS trade.

A furious attack has begun from the West. The trades leveled at the BRICS tells their own story:

• BRICS countries subscribe to “different values”.

• The rest of the BRICS abhor China’s rise.

• Russia is a “declining country” and doesn’t have “much in common” with the rest of the BRICS as a significant player in the world economy, apart from its vast energy reserves.

• Therefore, BRICS countries aren’t “natural allies”.

• Indians are frightened of encirclement by China and are full of angst about the “very big imbalance” between them, although they have “lots of economic interests in common”.

• China, in turn, is concerned about the spectre of a US-led Asian alliance arrayed against it, which Includes India.

• South Africa is struggling to sustain growth; Russia remains “volatile”; Brazil shows promise, while China and India are massive countries with extraordinary potential and highly impressive records. The BRICS isn’t a “natural grouping”.

Arguably, there is merit in some of these arguments, but then, BRICS process is about steadily enlarging the commonality of interests among the member countries and never about creating a bloc of like-minded nations on the basis of their so-called “values”. It is a pragmatic process that gives space and autonomy for the member countries, which in turns provides BRICS also the latitude to work on creating over time a critical mass.

The fact of the matter is that the critical mass is building and is already visible. As the BRICS gains confidence, it is spreading its wings. The summit in 2011 in China took the baby steps in the direction of harmonizing the member countries’ positions on international political issues. The BRICS took a step forward in the Delhi summit to adopt a common stance on Syria, the number one “hot spot” in world politics today. The Delhi Declaration puts accent on a Syrian-led inclusive political process and national dialogue and calls on the world community to respects that country’s independence, territorial integrity and sovereignty.

The so-called “Delhi Action Plan” approved by the summit underscores the political will on the part of the member countries to strengthen the BRICS process. It envisages regular and frequent meetings of the foreign ministers, finance ministers, trade ministers, agriculture ministers, health ministers and central bank governors (plus meetings at senior officials’ level on various areas of cooperation) on the sidelines of relevant international events. The intention is to coordinate a BRICS common stance on a wide range of shared interests globally.

What needs to be highlighted is the decision to hold “stand-alone” meetings of the BRCS High Representatives responsible for national security. In the Indian context, the National Security Advisor is the key figure at the highest level of policymaking in foreign and security policies – and, interestingly, is also the designated point person to steer the course of India-China relationship.

The BRICS holds interesting possibilities for India to work with China on the global issues. Viewed from another angle, the BRICS process explores the common aspirations of the two Asian powers in the emergent world order. They are at complete liberty to fast track issues.

The heart of the matter is that BRICS provides a friendly, unhurried enviornment in which meaningful cogitations can take place between member countries at a bilateral level as well. Lest it be overlooked, on the sidelines of the summit in Delhi, Indian and Chinese leaderships took time out to discuss the bilateral relationship.

When the western critics viciously lampoon that the BRICS lack “mortar”, et al, they are barking up the wrong tree. The BRICS is not meant to be a steel-and-glass edifice. It is a process borne out of a common will to blend shared aspirations regarding a new world order. Given the BRICS economies’ growing share of the world GDP, they have a claim to greater participation in the global architecture. While dogs may bark, the caravan is determined to roll on. That is the message coming out of the BRICS Delhi summit.

Tags: BRICS  China  India