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12 August 2017, Gateway House

BRICS Summit under Doklam shadow

BRICS, which has always been committed to enhancing solidarity, is now entering its second decade – even as tensions between its two most consequential members remain unresolved and member states and other emerging markets are set to serve as “the main engine” of global growth

Distinguished Fellow, Foreign Policy Studies

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BRICS is entering its second decade, with China as its chair. Preparations are now in full swing for its 9th summit, to be held in Xiamen, Fujian province, from September 3-5. The theme is ‘Stronger partnership for a brighter future’.

It is a particularly challenging task for an Indian analyst to evaluate prospects of the forthcoming summit at the time of protracted standoff on Doklam. The host country continues to speak of teaching ‘lessons’ to India and threatening it with dire ‘consequences’, as various experts debate the possibilities of ‘another war’ between India and China, the two most consequential members of BRICS.

The only meaningful way to offer an assessment is to compartmentalise bilateral issues and BRICS – as the leadership of the two nations seems to have done so far. The management of the Doklam crisis therefore runs side by side with national security advisers and major ministers – foreign affairs, finance, commerce and others – holding their confabulations on how to make BRICS a more effective institution.

BRICS, emerging as it did as an alternative to the western coalition, which stands considerably fractured today, showed commitment to enhancing solidarity on a range of global and regional issues even as its two key members – China and India – remain divided on their place in the sun in Asia and the world. Besides, at the global level, there is hardly any other grouping – with the exception of G20 – that commands as much international attention as BRICS does.

With the proactive presidencies of Russia and India behind them, the Chinese have been trying to put their own imprimatur on BRICS, regardless of adverse reaction in Asia to their actions in Doklam and the South China Sea. According to the Chinese government, BRICS is in a position to further strengthen its three pillars, namely, political security, economic and financial cooperation, and people-to-people and cultural exchanges.

The informal meeting of BRICS leaders on the sidelines of the G20 Summit in Hamburg on July 7 gave sufficient clues of the direction in which BRICS is heading now.[1] Their collective assessment indicates that global economic growth is “gathering pace” despite prevailing risks, and that in this situation, BRICS member states and other Emerging Markets and Developing Countries (EMDCs) serve as “the main engine” of global growth. Reminiscent of how developed countries used to be prescriptive towards the South in the past, BRICS’ advice to major economies is to enhance macroeconomic policy coordination and avoid negative effects on emerging market economies. BRICS projects itself as a supporter of a rules-based, transparent, non-discriminatory, open and inclusive multilateral trading system as well as an ardent advocate of reform in the global financial structure and implementation of the Paris Agreement on Climate Change.

While BRICS officials invest much time and effort in crafting common positions on a wide range of issues, the grouping’s effectiveness may truly be judged by the intra-BRICS cooperation on the ground, which is gradually gaining bandwidth. The New Development Bank (NDB) is a reality that shows momentum with its plan to extend loans worth $2.5 billion in 2017. (Its board approved loans for seven sustainable infrastructure projects in all five BRICS countries for the total amount of over $1.5 billion in 2016.)[2]

The NDB’s Africa Regional Centre is being set up and operationalisation of the Contingent Reserve Arrangement (CRA) is complete. Progress is being reported on the setting up of a new Credit Rating Agency (CRA).

While looking to the future, BRICS governments and select business leaders have been continuously engaged in devising ways to implement the Strategy for BRICS Economic Partnership, working within the framework of the BRICS Roadmap for Trade, Economic and Investment Cooperation until 2020. Several institutional mechanisms (such as, the Contact Group on Economic and Trade Issues, Business Council, NDB and interbank cooperation) are in play now. The canvas of their operations covers enhanced exchanges in e-commerce, single window, IPR cooperation, industrial cooperation, trade promotion and micro, small and medium enterprises (MSMEs).

Another area of focus, largely due to India’s persistence, is the endeavour to expand cooperation to counter international terrorism. The other four members have a variable degree of interest in this field, but have agreed on the need to strengthen cooperation, both at the bilateral level and international fora. BRICS nations have called upon the world to adopt “a comprehensive approach” in combating terrorism. They can increase their credibility through action, not slogans. The present chair, China, has a special responsibility in this regard.

China’s ‘One Belt, One Road’ initiative has drawn divergent views from member states: India maintains strong reservations; Russia is clearly supportive; South Africa is mildly interested; and Brazil is indifferent. How a common position is crafted on this issue at the Xiamen Summit will be worth watching.

There has been the usual speculation regarding the possible expansion of BRICS membership, a perennial topic prior to a summit. What may be more interesting, though, will be the unfolding of the ‘BRICS Plus’ idea, involving China’s choice of friendly nations that it invites to an outreach meeting with BRICS leaders. Countries such as Laos, Philippines and Indonesia appear to be likely invitees. Will Pakistan, Turkey, Nigeria, Egypt and Kazakhstan also be on the list?

The growing engagement of civil society – think tanks, academics, media, parliamentarians, political parties and youth leaders – in building up identity and solidarity among BRICS countries has been fairly innovative. The Chinese presidency has carried forward this process. But its effectiveness may be determined, above all, by the state of India-China relations. If strategic trust evades the two countries—as now – BRICS solidarity will become a hollow slogan.

A sizable dose of statesmanship is needed in Beijing to ensure that the BRICS caravan moves purposefully into its next decade.

Rajiv Bhatia is Distinguished Fellow, Foreign Policy Studies Programme, Gateway House and a former high commissioner to South Africa.

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References

[1] 8th BRICS Summit: Goa Declaration, brics.utoronto/ca

[2] NDB’s General Strategy: 2017-2021, ndb.int