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13 March 2012, Gateway House

India-Brazil: pioneers of a new development agenda

India and Brazil have declared inclusive development an imperative and have engineered creative solutions to meet their developmental challenges. But both also face many obstacles to equitable development. Can the upcoming BRICS Summit in New Delhi help drive a new development agenda?

former Researcher, Gateway House

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Expectations are high for the fourth summit of Brazil, Russia, India, China and South Africa, to be held in New Delhi on March 29th. With economic crisis ablaze in the Eurozone and signs of another global recession, anticipation is mounting for how the leaders of the so-called BRICS will address the world economic slowdown and how far they will push to reform the institutions of global governance.

Yet with the spotlight on the economy, a promising and tangible development agenda could be overlooked. At every summit, members have renewed their pledge to strengthen cooperation on social protection, public health, food security and agriculture. But little has been achieved so far. For India – home to one third of the world’s poor – these efforts should be a priority.

The potential benefits of cooperation are especially clear in the case of Brazil. India and Brazil have declared inclusive development an imperative and have engineered creative solutions to meet their developmental challenges. But both also face many obstacles to equitable development – some of which can be overcome through mutual learning and targeted bilateral investment.

Brazil’s Zero Hunger strategy, for instance, has been successful at reducing poverty, inequality and hunger by developing profitable small farms and delivering cash to poor families through innovative payment systems. As the debate rages in India about how best to reduce poverty, curb growing inequality and boost agricultural production, Brazil’s experience can help.

Brazil’s social schemes are among the worlds best targeted and they’re transparent. They have demonstrated how to streamline the delivery of services across all levels of government. By collaborating with Brazil, India can improve the reach and efficiency of its own, notoriously leaky schemes, including the Public Distribution System, whose losses are estimated to be around 44% a year.

There are of course vast differences between the two countries. India’s poor are twice Brazil’s entire population, for example. But that shouldn’t stop India from borrowing some good ideas. It’s not necessary for India to indiscriminately adopt cash transfers or other Brazilian schemes to benefit from knowledge sharing. India can leverage its private sector skills to scale up programs.

In turn, Brazil can benefit from India’s innovators, who are finding novel ways to provide the country’s low-income population greater access to products, services and employment that enhance living standards. India has produced the world’s cheapest car; electronic tablets that cost $50; large, successful retailers that link thousands of rural workers to modern urban markets; and family-sized apartments in cities that sell for $4,200. In the affordable housing sector the long-term opportunities for partnerships with Indian entrepreneurs are particularly significant. Brazilian officials predict a deficit of 23 million homes for low-income families in the next 20 years.

In healthcare, the benefits of India-Brazil collaboration are already evident. Faced with common diseases and limited resources, India and Brazil have used each other’s comparative advantages, and challenged the international intellectual property regime to combat HIV/AIDS. In 2007, for example, Brazil broke a patent on an antiretroviral drug produced by Merck Pharmaceutical in the wake of rising drug costs. Indian firms were the only producers of the generic version of the drug, and Hyderabad-based Aurobindo ultimately provided Brazil with the active ingredient to produce it. It was estimated that this would save Brazil $237 million through 2012.

Brazil has taken advantage of their joint campaign for greater access to life-saving medicine and seen an extraordinary decline in HIV/AIDS. Recognizing such synergies, India and Brazil have invested $1 million each in joint research on common diseases through the Indo-Brazil Science Council. This alliance can and should be strengthened.

Healthcare, poverty alleviation and market-driven social innovation are just a few areas where cooperation between these powers can produce broad social benefits. A formal partnership is needed between Brazil’s Ministry of Social Development and Fight Against Hunger and India’s Central Planning Commission to institutionalize knowledge-sharing and technical cooperation on social protection programs. Chambers of commerce, including FICCI and the India-Brazil Chamber of Commerce, can drive private sector collaboration, connecting Indian and Brazilian entrepreneurs.

At a time when both countries are beginning to use foreign aid as a diplomatic tool, it is tempting to regard them as competitors. But these countries should instead recognize each other as strategic partners and pioneers of a new development agenda – one that pragmatically addresses the needs of developing nations. India and Brazil’s strategies for inclusive development are complementary and together hold great value.

Foreign aid provided by BRICS countries has more than doubled since 2005, and the surge is intimately tied to their efforts at reforming global governance. Since the end of World War II, global governance has been a Western-led enterprise. The rules that govern aid and influence the development of other nations have been made by the victors of the war and have evolved to rest within a small group of powerful countries – which now face a self-made crisis. With the rise of these new powers, partnerships that once seemed weak are gaining traction. Prime Minister Manmohan Singh should take advantage of his position as host of the upcoming summit to drive a new development agenda.

Estefanía Marchán is a Latin America specialist at Gateway House: Indian Council on Global Relations based in Mumbai. This article is a précis of her larger paper, India and Brazil: New Models for Cooperation.

The Hindu, a leading newspaper in India, republished this Op-Ed on 14 March, 2012 here.

This article was exclusively written for Gateway House: Indian Council on Global Relations. You can read more exclusive content here.

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