The BRICS Equilibrium
Vol 10 Issue 5 Nov - Dec 2016
Is BRICS fulfilling its charter or is it floundering?
Monday, December 5, 2016
The BRICS Summit in November at Goa was the eighth such meeting of leaders of the five emerging economies of the world and in many ways highlighted the direction that BRICS is taking. The acronym BRICS was created in 2001 by Jim O’Neil of Goldman Sachs, to describe the rising economies of Brazil, Russia, India and China (South Africa was added later), which he predicted would dominate the world economy in the future. The five nations came together to form BRICS – a congress of developing nations – that would break the monopoly of the developed nations (especially USA and Europe) and provide a forum for developing economies. Two decades, down the line, the BRICS movement is a mixed one. The Brazilian and South African economies have floundered in mismanagement and corruption. Russia and India have sputtered but continued a steady rise and now form the fulcrum of the group. China, whose economy exceeds that of the four other members combined is the engine and the self-nominated leader. More than economics, it is strategic interests that determine the equations within the group, and the strategic interest of its members often clash. The tangled relationship of strategic power between the three leading members undermines the very concept of BRICS – as was amply evident by the nebulous outcome of the Goa Summit.
The political origin of BRICS lay in the development of a ‘Strategic Triangle’ of Russia, China and India – a concept first articulated in the 90s by Russian Prime Minister, Yegenev Primakov – as a hedge against the hegemony of the USA. The equations were different then, with the USA as the sole superpower and India, China and Russia all struggling to find their feet. Today, the USA is bruised by unnecessary wars, and reluctant to enter arenas like Syria and Iraq. Whether it would change its passive foreign policy with the advent of the Trump regime remains unclear. Russia and China, buoyed by their rising economies, have become aggressively assertive – Russia in Georgia and Ukraine, China in the South China Seas. In the battle against the greatest threat to the world – the ISIS- it is Russia that has taken the lead, with USA having acquiesced responsibility. This may change with the new US government under Trump and there is also a likelihood that US –Russia ties may improve. Yet, the US tilt towards India would continue and the Indo-US embrace draws Russia and China together. China’s all-weather relationship with Pakistan, at the expense of India, further complicates equations. All this makes the BRICS relationship a tangled one, with each member trying to promote conflicting interests in a forum that is becoming increasingly dominated by China.
The complexity of the relationship was amply brought out at Goa, whose outcome was at best, a glass half-full. One of the spin-offs was a return of sorts to the ‘Special’ Indo-Russian relationship with Prime Minister Modi asserting that, ‘One old friend is worth two new ones.’ A slew of 19 pacts inked during the visit will help put the relationship back on track. Deals worth $24 Billion were signed (Putting Russia back in the position of India’s largest defense supplier, after being briefly supplanted by USA) ranging from a $ 5.5 Billion deal for five S -400 Triumph Air Defense systems; four Grigorivich class Frigates and 200 Kamov -226 helicopters. Energy was another area of focus, with the Russian energy giant Rosnoft acquiring a 49% stake in Essar Oil for $12.9 Billion in what is the single largest foreign direct investment in India.
The slew of deals could not mask the strategic distance that is developing between India and Russia. Russia’s closeness to Pakistan (especially its joint military exercises) and its refusal to take a stance against Pakistani sponsored terrorism indicates that the ‘special’ relationship is not so special anymore. In fact, Russia seemed more than keen to adopt the China stance, and it was China that dominated the proceedings. Even Mr Modi’s personal one-on-one with Premier Xi Jinpiang got few concessions. The only takeaway was that China agreed to hold a second round of dialogue on India’s NSG membership and accepted the need for greater Chinese investments in India to balance the yawing trade deficit. Otherwise, it refused to acquiesce on India’s bid for a UN ban on the Jaish-e-Mohammed chief Masood Azhar or made any statement that would link Pakistan with terrorism. So with Xi Jinpiang, it was a photo op at best.
The joint statement released at the end of the summit again reflected the nebulous relationship between the three key members. While India called Pakistan ‘The Mothership of Terrorism’ that view was not reflected in the Goa Declaration. All members agreed that terrorism was a threat, but no mention was made of ‘cross-border terrorism’ or the threat emanating from Pakistan. The Declaration called for action against terrorist groups like Jubhat- al Nusra, ISIS and Al Qaeda, but did not mention Jaish-e-Mohammed or Lashkar-e-Toiba. So the groups that Russia is fighting in Syria and the ones that pose a threat to China were named, but those that pose a threat to India conspicuously avoided. The only consolation from India’s point of view was the call to adopt the ‘Comprehensive Convention on International Terrorism’ at the UNGA – a long-standing Indian demand.
So, what were the takeaways of the Summit? The only one was the operationalization of the New Development Bank, which would function on the lines of the International Monetary Fund. Though dominated by Chinese funding, it would have an Indian President and initial investments would be Indo-centric. The other was the winning over of Brazil which is now ready to push India’s case for a seat at the NSG, and China’s oblique statement to review India’s case. Else it merely underlines China’s dominance of the forum which successfully protected its all-weather friend and stymied Indian efforts to isolate Pakistan.
Along with BRICS, the leaders of BIMSTEC met at the summit venue. BIMSTEC leaders were far more supportive on India’s position on terrorism. The SAARC Summit at Islamabad had been recently scuttled with five of the seven members refusing to attend and that in a way puts paid to SAARC as a concept in its present form. A greater focus on BIMSTEC will have India, Bangladesh, Sri Lanka, Nepal, Bhutan, Myanmar and Thailand establish common economic ground. Free of Pakistan’s intransigence, this forum can develop an economic corridor from South Asia to the Far East, open access to markets and supplies and boost the economies of all its members. India would do well to tread a balanced path with BRICS, and hold its own so that the forum does not get completely dominated by China and Russia. Yet the BIMSTEC forum is the one to be pursued with greater zeal. An economic grouping within the region, will also reflect the strategic concerns of its members more accurately. This is the forum that holds greater promise, both for the nation and the region.