The air was thick with scepticism when the leaders of Brazil, Russia, India, China and South Africa (BRICS), the world’s top five emerging economies, began their fourth summit in Delhi on March 29. But when the summit ended with an ambitious 50-point Delhi Declaration, the message was loud and clear. This was no glorified photo-op or a mutual admiration club. On the contrary, BRICS, which comprises nearly half the world’s population and a quarter of global GDP, was seeking to create a new world order to reflect the seismic shift of power from the West to the rest.
BRICS leaders pitched for a bigger voice for emerging countries in global governance institutions, including the United Nations (UN), the International Monetary Fund (IMF) and the World Bank. Despite their varying backgrounds and profiles, the leaders also made it clear to the West that force and sanctions won’t do and underlined that only dialogue and diplomacy could resolve the Iranian nuclear standoff and the Syria crisis.
In their speeches, Indian Prime Minister Manmohan Singh and Presidents Hu Jintao (China), Dmitry Medvedev (Russia), Dilma Rousseff (Brazil) and Jacob Zuma (South Africa) underlined the need for restructuring the world order to accommodate emerging economies and developing countries and closer coordination on global issues.
“While some progress has been made in international financial institutions, there is lack of movement on the political side. BRICS should speak with one voice on important issues such as the reform of the UN Security Council,” said Manmohan Singh, the summit host. He spoke about the need for addressing deficit in global governance. “We are committed to stepping up exchanges with other countries on global economic governance reforms and increasing representation of developing countries,” said Hu.
The Delhi Declaration encapsulated these concerns and saw BRICS leaders voicing disappointment with the slow pace of the IMF quota reforms and asking the West to implement the 2010 governance and quota reform before the 2012 IMF/World Bank annual meeting. It was an amplification of master themes that dominated the first three summits at Yekaterinburg (2009), Brasilia (2010) and China (2011) but the Delhi summit sought to break fresh ground. In a pioneering step that could prove to be a game-changer, BRICS decided to create its first institution in the form of a BRICS-led Development Bank that will mobilise “resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries.”
The leaders directed their finance ministers “to examine the feasibility and viability of such an initiative, set up a joint working group for further study and report back by the next summit. The joint BRICS bank may emerge as the supplement to the West-dominated World Bank or the European Bank for Reconstruction and Development and could hasten the reordering of the global financial management system. South African President Jacob Zuma has voiced hope that such a bank will give an impetus to developmental aspirations of Africa by bringing the much-needed capital for financing infrastructure projects in the continent.
Besides the BRICS bank, the four-year-old grouping set up an ambitious target to scale intra-BRICS trade from Rs 11,881 billion to Rs 25,829 billion by 2015 and sought to promote greater economic integration. The development banks of the five countries signed two pacts on promoting trade transactions in local currencies of BRICS countries. These included enabling the master agreement for extending credit facilities in local currencies and BRICS multilateral letter of credit confirmation facility agreement. The mechanism envisages grant of credit lines in local currencies and cooperation in capital markets and other financial services, treasury transactions and issuing local currency bonds in BRICS markets subject to national laws and regulations.
Other key economic decisions included setting up a BRICS exchange, which has already become operational. The BRICS report, which maps out synergies and complementarities among economies of BRICS countries to spur mutual trade and investment, was also released. The report was prepared by experts from all BRICS countries under the leadership of Kaushik Basu, India’s chief economic advisor.
Contesting the West’s narrative, the five countries warned the West against allowing the Iran situation to escalate into a conflict and said dialogue was the only way to resolve the Iranian and Syria issues. “The situation concerning Iran cannot be allowed to escalate into conflict, the disastrous consequences of which will be in no one’s interest,” said the declaration. The declaration saw the leaders voicing “deep concern” over Syria as they called for “an immediate end to all violence and violations of human rights in that country”, backing a Syrian-led inclusive political process. Amid differing perceptions, India played a crucial role in shaping the collective stance of the BRICS countries on the need for dialogue to resolve the festering crisis in West Asia, home to over six million Indians, and to push continued regional and international cooperation in stabilising Afghanistan.
BRICS leaders took a long-range view and affirmed their commitment to support Afghanistan’s emergence as “a peaceful, stable and democratic state, free of terrorism and extremism” and underscored “the need for more effective regional and international cooperation for the stabilisation of Afghanistan”.
(This article was published in India Perspectives in April, 2012 )
- 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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