Not Just a Talk Shop
OPEN Magazine, March 29, 2012
By 2015, these five emerging economies would account for a
substantial share of the world’s output.
It may be an idiosyncratic club, but should it therefore be written
off? As leaders of BRICS—Brazil, Russia, India, China and South
Africa—gather in New Delhi for a summit to prove that their
five-member group is something ‘solid’ (a word Indian PM Manmohan
Singh has used in an Indo-Pak context), rather than just another
talk shop, critics across the world have not been able to hide their
derision. The interests of these countries are far too divergent,
they mutter, to result in anything that could matter.
For exponents of the idea, however, the five represent not just a
fifth of global output, but also a dynamic geo-economic bloc on the
ascendant. It owes its name to a 2001 Goldman Sachs report that
projected a world economy under BRIC domination (South Africa was
admitted only in 2010) within half a century. Today, it is a club
more than a clever acronym, and one with an agenda too. “[The group]
seeks political dialogue towards a more democratic multipolar
order,” says senior Indian bureaucrat Sudhir Vyas, adding that the
global power shift currently underway calls for “corresponding
transformations in global governance”.
The buzzword at the Delhi summit is cooperation. Says Bipul
Chatterjee of Consumer Unity & Trust Society: “These leaders are
likely to float the idea of a development bank to be capitalised by
BRICS, or perhaps all developing nations, to fund the development
aspirations of the poor world.” This aim has its origin in Manmohan
Singh’s 2010 suggestion that the world’s surplus savings be
funnelled into emerging economies short of capital for investment in
infrastructure and other public utility projects. Says Samir Saran,
a BRICS expert with the Observer Research Foundation: “The proposed
bank could tap these savings by creating sovereign guaranteed debt
instruments to leverage more money for these economies.”
The other area of mutual interest is trade. As a booster, of help
would be an agreement among the five countries’ central banks to
grant one another access to loans in local currencies. Saran says
the BRICS platform would “offer the five ‘R’s: rupee, rouble,
renminbi, rand and real” for trade payments as part of a test
settlement mechanism, “before internationalising these currencies”.
The goal here is to reduce dependence on the US dollar as an
international means of exchange.
Sceptics do not see much coming of it. Yet, it is worth noting that
the five have managed to get this far as a club without letting
bilateral bickering get in the way. This in itself is commendable.
Perhaps BRICS bashers should wait a while before writing it off.
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