How The BRICS, BIMSTEC Summits Hit The Right Notes, Especially For India
The BRICS and BIMSTEC summits provided an opportunity to India to project itself as a stable, secure, dynamic and rapidly expanding economy.
The meetings helped to significantly raise the political image, clout and profile of India in the region and beyond.
The eighth BRICS Summit on 15-16 October in the Indian coastal city of Goa took place in the backdrop of weakening international energy prices, global economic slowdown and rising tensions on account of terrorist attacks and violent conflicts in different parts of the world.
What was initially a four-country grouping of Brazil, Russia, India and China was proposed in 2001 by Jim O'Neill, the chief economist at Goldman Sachs. The rationale advanced for such a grouping was that all of them had vast territorial expanse and large populations and were rapidly growing economies. At that time, the world was battling the decade's worst economic slump, growing inequality among the rich and poor nations and a transformed global situation in the aftermath of the 9/11 strikes in New York and Washington, DC.
The first ministerial-level meeting of BRIC foreign ministers was held in New York in 2006 on the sidelines of the UN General Assembly Session. The cycle of summit gatherings was initiated by Russia in 2009 with the meeting of heads of states/governments of the four countries (South Africa joined later as the fifth member at the Sanya Summit in China in 2011) in the southern Russian city of Yekaterinburg. Since then, it is to the credit of the grouping that annual conclaves have been organised by the host countries without a break. This is notwithstanding the intervening deterioration in international security and the ups and downs in global economy, starting with the subprime mortgage lending crisis in the United States (US) in 2007-08, followed by the Eurozone Sovereign debt crisis in 2010, which continues to this day.
Today, the international economy is weak, and outlook uncertain. Russia, Brazil and South Africa are exporters of raw materials, commodities and energy, whose prices have witnessed a sharp decline. Brazil and Russia were hit by a decline of more than 3 per cent in their gross domestic product (GDP) last year. South Africa, in comparison, is a much smaller economy, but it also has not been performing well, growing at a meagre 1.3 per cent in 2015. South Africa had a GDP of US$ 310 million in 2015, as compared to US$ 1.3 trillion for Russia, US$ 1.8 trillion for Brazil, US$ 2.3 trillion for India and US$ 10.9 trillion for China.
The acute fall in international demand has led to a slowdown in China as well, which registered under 7 per cent GDP growth for the first time in the last 30 years. India is the only country whose economy has been growing at an impressive clip. It, however, needs to be recognised that the total GDP of India is one-fifth that of China.
Over the last 15 years, since the idea of BRIC was initially mooted, the economy of China has grown at a significant pace, making it not only the second largest economy in the world but also making its economy bigger than the economies of all the other four BRICS countries put together. Expansion in China's economic, political and military might over the last 10 years has made it aggressive and assertive.
On the contrary, Russia has seen a relative decline, particularly over the last two years, since the onset of the Ukrainian crisis and the subsequent ''accession'' of Crimea to Russia. The country has sought to transform the equation by its active involvement in the Syrian crisis by bombing the Islamic State-occupied territories and supporting Syrian President Hafez al-Assad.
During this period, relations between India and China have seen a deterioration while Russia has drawn closer to China. Russia has also sought to reach out to Pakistan to ostensibly preclude the spillover of Taliban insurgents from North Afghanistan to Tajikistan and Central Asia.
It is in this tense and stressed global scenario that the recent BRICS and BIMSTEC Outreach Summits took place.
India was able to record some significant progress on the issue of dealing with terrorism with the BRICS member countries, issuing their strongest statement so far on dealing with this menace. The declaration issued by BIMSTEC countries and statements made by individual leaders of these countries at the Plenary Session with BRICS member states were even stronger. The challenge now will be to ensure that the contents of the declarations are followed in letter and spirit.
Indian media would have us believe that the only subject of discussion, or at least the most important theme, at the summits was ''terrorism''. This is not the case. Significant substantive business was transacted in different areas, including political, strategic, economic, social and cultural spheres.
Useful progress was witnessed on several fronts. BRICS has already registered a significant achievement by launching the New Development Bank (or BRICS Bank) at the sixth summit in Fortaleza, Brazil in July 2014. The initial authorised capital of the bank is US $100 billion, with initial subscribed capital at US$ 50 billion divided into paid-in shares of US $10 billion by each of the five members. The Bank has already committed close to US $1 billion to projects in all member countries on green energy and sustainable infrastructure. This figure is expected to rise to US $2.5 billion in 2017. This is an impressive performance for a new institution.
Another feather in the BRICS cap is the Contingent Reserve Arrangement (CRA) for provision of support through liquidity and precautionary instruments in response to actual or potential short-term balance of payments pressures. It entered into force upon ratification by all BRICS states in July 2015. The CRA is viewed as a competitor to the International Monetary Fund (IMF) and, along with the New Development Bank, is concrete evidence of increasing South-South cooperation. The contribution of US $100 billion to the Reserve is split into US $41 billion by China, US $18 billion each by Russia, India and Brazil, and US $5 billion by South Africa.
In addition, agreements were signed on the establishment of BRICS Agricultural Research Platform, mutual cooperation between diplomatic academies and regulations on Customs Cooperation Committee of the BRICS. An expert group was established to go into the possibility of establishing a BRICS Rating Agency, a proposal advanced by India. The informal suggestion by China to establish a Free Trade Agreement amongst BRICS countries was turned down. It may be noted that India had an adverse balance of trade with China to the tune of more than US $50 billion in 2015. This is unsustainable. The countries also agreed to cooperate to deal with corruption and black money.
In its 109-para declaration, member states agreed to work together on innovation, combating climate change, achieving Sustainable Development Goals (SDGs), nuclear technology, outer space, youth programmes, telecommunication, disaster management, gender equality, urbanisation, sports, railway research, think tanks, academic fora, health issues, WTO, promoting economic exchanges, drugs and several more. The declaration also contained strong and critical references to promoting security, stability and peace in the Middle East and North Africa, Afghanistan, Africa and Palestine.
India had taken a number of new initiatives in the run up to the summit. For the first time, a BRICS Trade Fair was organised. Members appreciated this commendable initiative, which went a long way with BRICS Business Council, BRICS Contact Group as well as BRICS Economic Partnership and BRICS Roadmap to promote economic and commercial collaboration between member countries.
The other initiative was to organise the first meeting among National Security Advisers to promote intelligence exchanges and cooperation to strengthen and promote security and stability in different countries and regions. In addition, 24 fresh ideas including the meeting of women parliamentarians, an under 17 football tournament, a film festival, the smart cities workshop and several more were implemented. Overall, India organised more than 100 events during its chairmanship, with more than 10 of these at the ministerial level.
Hope from BRIC in 2006 was that it would bring equity to the global economic architecture, provide a strong voice to the developing world, particularly to the emerging market economies, and offer a political counterweight to compete with the developed West. Eight years after the leaders of the countries started their annual meetings, this vision has not been realised. It is as far, if not further, from realisation than it was at the inception.
The biggest challenge confronting progress in BRICS is the aggressive and uncompromising attitude of China and its uneasy relations with India. Greater responsibility to have harmonious and amicable relations with India devolves upon China. In addition, rather than focusing on the number of meetings and areas covered, it would be useful to sharpen the focus of activities of BRICS to deal with issues related to terrorism, peace and economic development to obtain optimum results from the partnership.
BIMSTEC Outreach Summit
The BRICS-BIMSTEC Outreach Summit was attended by leaders of all seven member states, including Bangladesh, Myanmar, Sri Lanka, Thailand, Nepal and Bhutan on 16 October 2016.
In addition to the Outreach Summit, the BIMSTEC countries had a meeting among themselves, which was chaired by Prime Minister Narendra Modi. BIMSTEC member states issued a strongly worded formulation on terrorism. The declaration also dealt in detail with climate change, SDGs, connectivity, disaster management, agriculture, BIMSTEC FTA, mutual assistance in criminal matters, multi-vehicular agreement, fisheries, blue economy, mountain eco-systems, energy, health, tourism, people to people contact and so on.
India's invitation to BIMSTEC countries and not SAARC, keeping Pakistan out, while still having four of the seven SAARC countries condemn Pakistan, as commented by China's Global Times, to the status of a pariah in South Asia. This is being seen by many as a strategic masterstroke. Through this invitation, India also gave notice that it will pay much more attention to collaboration among BIMSTEC members than before.
Bilateral visits of President Putin, President Temer of Brazil and Aung San Suu Kyi, State Counsellor and Minister of Foreign Affairs of Myanmar, before and after the summits further strengthened and promoted cooperation and collaboration of these countries with India.
The BRICS and BIMSTEC summits provided an opportunity to India to project itself as a stable, secure, dynamic and rapidly expanding economy. With the BIMSTEC countries, India was able to earn their gratitude and appreciation for the invitation to meet leaders of the five emerging economies at one time. Meetings between Prime Minister Modi and leaders of BIMSTEC states went a long way in bolstering an understanding and identifying new areas of cooperation. The meetings helped to significantly raise the political image, clout and profile of India in the region and beyond.
As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.
Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.
We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.
Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.