Banking on BRICS: Remapping grammar of global politics

- by Manish Chand | Manish Chand

It’s the BRICS moment in global geopolitics. Not everyone will agree, with sceptics caviling about the slowing rate of growth in most BRICS economies. But the BRICS has transcended economics to morph into a powerful grouping driven by an overarching ambition to reconfigure the world order and remap the semantics and grammar of global politics. The 5th BRICS summit in Durban (March 26-27) is, therefore, set to hog the limelight, giving the developed world jitters about strategic intentions of this club of emerging economies.
In many ways, the BRICS is a unique multilateral grouping, defying classification. “The BRICS is not geographical in its rationale, such as the European Union or the Association of Southeast Asian Nations; or commodity-based, like the Organization of Petroleum Exporting Countries; or a security-based alliance such as the North Atlantic Treaty Organization,” says Sudhir Vyas, India’s Secretary (West) in the external affairs ministry. What brings them together, as Vyas rightfully stresses, is “their shared will and capacity to engage constructively with the world community in the quest for sustainable solutions to the contemporary issues and challenges facing the world.”

Banking on BRICS

The Durban summit promises to be perhaps the most substantive one, and is poised to culminate in the unveiling of the landmark BRICS Development Bank, the most visible and tangible symbol of the new synergy among countries of the global south and the emerging world. India will be taking the lead in shaping the contours of the BRICS Development Bank. India sees the bank as a catalyst in infrastructure-building which will make the larger emerging world a hub of economic vibrancy in times of the global slowdown. Given the slowing Indian economy and the widening current account deficit, it’s not clear how much India will pledge for the Development Bank, but it could be around $5-10 billion. The key modalities of the Development Bank are being actively debated and the final decisions are expected to be taken by BRICS finance ministers on critical issues like the initial corpus of the BRICS fund, the vision statement, the governing board and the location of the bank. At the moment, there is a broad consensus that the Bank’s chief role will be to act as a facilitator of infrastructure development in developing countries. The Bank is envisaged as an alternative source of funding from the IMF and World Bank which have rigorous criteria, including some non-economic conditions on governance and democracy, which slows down the decision-making. The likely outcome will be the initial seed capital of $50 billion with equal contributions from each of the five countries.
China, which has the largest forex reserves of over $3.2 trillion, is understood to be pitching to control the bank by offering a bigger initial contribution, but countries like India and Russia are not in favour of it. India will, therefore, pitch for the equity principle to ensure that the BRICS bank should not duplicate asymmetries of the Bretton Woods institutions. The governance structure of the bank, too, will be based on equal voting rights, says a senior Indian official. Whatever sceptics might say, the BRICS Bank is a potential game-changer in the BRICS’ larger project of remapping the global financial governance architecture and in spurring infrastructure building in the developing world. Despite the slowdown in some BRICS economies, the $14 trillion grouping is still a beacon of global recovery. The BRICS strategists are working on new initiatives to scale up intra-BRICS trade to $500 billion by 2015. The Durban summit will also impart fresh momentum to concretizing a BRICS Stock Exchange and promote greater trade in local currencies of BRICS countries.

Re-engineering global order

Besides the Development Bank, the Durban summit will focus on imparting greater strategic depth to the grouping that started off as a club focused on global financial governance issues, but has acquired the contours of a powerful pressure group in global politics, providing an alternative to the West-dictated hegemonic discourse on cross-cutting global issues. In this context, the leaders of the five BRICS countries will assert their strategic autonomy at the Durban summit and are expected to collectively pitch for reform of key global political and economic governance institutions. Equity is the buzzword and an overriding imperative for the five BRICS countries. The grouping is united by a common drive to break the decades-old stranglehold of the West on global financial institutions like the IMF and the World Bank. In his speech at the summit, Prime Minister Manmohan Singh is expected to make a robust pitch for re-engineering global institutions to allow a greater voice for developing countries in decision-making. Russia and China also see the BRICS as a powerful platform for democratizing the world financial order. The demand for greater voting quota for emerging powers and developing countries in the Bretton Woods institutions should be reflected in the joint declaration.
India sees BRICS, which consists of two permanent members of the UNSC and three aspiring members for the prized seat, as a powerful platform for building the critical mass required to advance the long-overdue reforms and expansion of the UN Security Council. In this context, the Durban summit will see India make a renewed push to get China to back its candidature for the permanent seat in the UNSC more explicitly and will try to get this commitment reflected in the joint communique. China has so far hedged on India’s UNSC claim.

Strategic Depth

Building upon the meeting of the national security advisers of BRICS countries in New Delhi in January, the Durban summit will see a convergence of views on a host of cross-cutting security issues like terrorism, piracy, nuclear proliferation and new age threats like cyber warfare and cyber espionage. Russia is specially keen on imbuing the BRICS with greater strategic depth and coherence on security issues. The focus will be on institutionalising BRICS cooperation in the realm of cyber security. In this respect, the summit is expected to culminate in important initiatives like a BRICS emergency response team that will facilitate consultation among cyber experts and senior officials in case of a major cyber threat. The mechanism will enable sharing experiences, best practices, technologies and expertise among the BRICS countries. In the area of counter-terrorism, the BRICS countries will also insist on the primacy of the UN leadership and press for adherence to the UN conventions on human rights.

Global/Regional Issues

Syria: With the Syria stalemate showing no sign of easing and growing unease about the infiltration of al-Qaeda elements in the ranks of the rebels/opposition in Syria, the grouping is expected to back the peace initiative of UN envoy Lakhdar Brahimi. One can expect a strongly-worded resolution in the joint communique that outlines the urgent need to advance the Syrian-led national reconciliation process and opposition to unilateral external intervention.
The Iran deadlock: Officials in New Delhi say that India is expected to join other BRICS countries in backing the P5+1 talks and promoting the resolution of the deadlock through diplomacy, and not through force. There is a possibility that the joint communique contains a reference to the impact of the US and EU sanctions on ordinary people of Iran and register the BRICS’ opposition to sanctions-driven approach of the West.
The African Agenda: Pretoria has made the African agenda the showpiece of the Durban BRICS summit. In view of its robust multi-faceted economic, political and strategic ties with the resurgent continent, India will pitch itself as a preferred partner in the African resurgence. China, which is the top trading partner of Africa among BRICS countries, is understood to be actively promoting the African agenda.
West Africa, Mali: With the African Union being invited to the BRICS summit for the first time, the leaders will be pushing for initiatives to stabilize the alarming security situation in West Africa and counter the rise of Islamist radicalism in Mali. India is specially concerned over the incestuous linkages of Islamist militant networks in Mali and West Africa with al Qaeda-Taliban remnants from Afghanistan and will like this concern to be reflected in the joint communique.

The Road Ahead

The Durban summit, the first one to be hosted on the African soil, will mark the political maturation of a multilateral grouping which was born in the crucible of the global financial crisis in the Russian city of Yeketerinburg in 2009 and had remained focused on economic issues for the first three years. The Sanya summit in 2012 brought in the political element, with the joint communique articulating a common BRICS position on Libya. The 2012 New Delhi summit saw the BRICS pooling in their collective economic and political clout to shape international discourse on pressing global issues like Iran and Syria. The Durban summit will cap this process of investing the grouping with greater political and strategic content. The BRICS countries, especially India, Russia and China, look at the grouping as a platform that provides a counter-narrative to the West-dictated agendas and approach on regional and international issues. The West and reigning status quo powers, enfeebled by the prolonged global slowdown and sterile interventionism, are trying hard to arrest what is clearly a defining shift of power from the West to the rest. The success of the Durban summit will lie in generating fresh mortar and cement to rebuild a more inclusive and democratic world order.

(Manish Chand is Editor-in-Chief of India Writes (www.indiawrites.org), an online magazine-cum-journal focused on international affairs, the India Story and promoting dialogue among cultures)

Author Profile

Manish Chand
Manish Chand
Manish Chand is Founder-CEO and Editor-in-Chief of India Writes Network (www.indiawrites.org) and India and World, a pioneering magazine focused on international affairs. He is CEO/Director of TGII Media Private Limited, an India-based media, publishing, research and consultancy company.

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