Updated: October 15, 2016 12:36:08 am
This weekend, as BRICS leaders meet in Goa for their eighth summit, India’s foreign policy establishment needs to think hard about just what it hopes for from this most unusual of global alliances. The case for BRICS is a simple one. Born, in 2001, from the imagination of Goldman Sachs chief economist Jim O’Neill, the acronym reflected his understanding that Brazil, Russia, India and China — to which South Africa was later added — would grow faster than the developed countries.
This, they have done. Brazil, Russia and India have caught up with the smallest G-7 economy, Italy, while China has become the second largest economy in the world. Yet, Europe and the United States are over-represented in global institutions like the International Monetary Fund and the World Bank. BRICS economies played a key role in hauling the world out of the global financial crisis. They also have some solid achievements to their credit, like founding the New Development Bank.
Having said this, it is far from clear the BRICS countries are — or even can — speak with one voice on issues of significance. National Security Advisor Ajit Doval’s speech to his BRICS counterparts on the need for joint global action against terrorism underlined one issue on which there are real divisions among the ranks: China will not abandon key ally Pakistan, while Russia is profoundly distrustful of the United States’ intentions. There are other, deeper, fissures. Brazil, South Africa and India want expansion of the United Nations Security Council; China does not. China wants an expansion of free trade amongst the BRICS states; the three smaller economies do not. Even on relatively minor issues, like breaking with tradition and finding a non-European to lead the International Monetary Fund, BRICS states were unable forge a consensus.
Further problems lie ahead, for China’s economic growth will, almost certainly, tend to reduce BRICS to a Beijing-led club. China’s nominal GDP is now larger than that of the other club members combined. The New Development Bank has come into existence precisely because it fits into China’s grand “One Belt, One Road” vision, helping to finance the welter of road and rail links that Beijing hopes will link its industries to markets in Central Asia and beyond. NDB lending will also provide a counterweight to Latin American and African states now pressured by the IMF and World Bank, but it is China that is best positioned to capitalise on that. In Goa, BRICS leaders will talk as equals — but there’s little doubt the grouping can only move forward with China as its engine. Is this something that in fact serves India’s interests, and, if so, what benefits does New Delhi seek to extract in return, is the question.
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