Other issues at the BRICS summit

Dear Editor,

Thanks for a well informed, thoughtful editorial “BRICS Bank” (GT March 30) – one of the suggestions the leaders of the five countries agreed to further investigate over the next year and hopefully implement at the Russian summit in 2012. The idea of a BRICS bank to promote development in the Third World is most welcomed especially for certain projects that poor nations cannot get funding for at multilateral institutions.

The bank, as the leaders stated, will not be a competitor to the World Bank and the IMF. Funding is expected to come from BRICS (Brazil, Russia, India, China and South Africa) as well as developing nations.

The leaders of the five countries also addressed other important current issues.

The leaders commit ted to avoid political disruptions that “would create volatilities in global energy markets”. They pledged to enhance intra-BRICS trade.

The BRIC acronym was coined by the investment (stocks/ bonds) company Goldman Sachs in 2001 to capture the shift in global balance from the developed world to what were becoming emerging markets as all of the BRICS countries were pursuing market economics from what were state striven policies. The formal group did not come into being until in 2009 and South Africa joined the group in 2010 to make it BRICS. The countries have very little in common but they are all fast-growing emerging economies outpacing the developed world and it is a very important global grouping. The five BRICS countries account for 43 per cent of the world’s population and a quarter of global output.

The Delhi Summit was the fourth among BRICS which largely eschewed political contents and controversies and focused instead largely on economic and development issues which included the bank and inking two pacts to ease trade among each other.

At the Delhi summit, the leaders made a strong statement on Iran calling for a peaceful resolution to that country’s nuclear aspirations.

They also adopted a middle-of-the-road resolution on Syria backing the Kofi Annan agreement. And the leaders cautioned against using the pretext of the Arab Spring to delay resolution of the Palestine issue vis-à-vis the Israelis.

Each of the BRICS countries has its own unique problems and each seeks its own solutions to these problems hoping to ride BRICS to develop their own economies and each is suspicious of the other’s intentions. For example, India wants access to funds and technology to grow its economy and is not eager for an agreement to reduce carbon emission reduction unless the developed world also commits to such a limit.

China doesn’t really care for money or technology because it is flushed in reserves and does not want to contain its growth with climate controls. Brazil has managed its emission-reduction programme well but wants to expand its economy through trade. Brazil and India have huge trade deficits with China which has not been showing serious efforts to address the problem with both partners or with the West.

South Africa lacks money and technology to grow its economy to meet rising domestic demand and only China has surplus to aid South Africa. Russia wants to sell its arms but India and China are not interested as in the past and Russia is not as generous as it was when it was a communist nation.

In spite of these problems and contradictions amongst themselves, BRICS is an important grouping that cannot be ignored. The five nations can play a huge role in setting the agenda at multilateral forums as well as at the World Bank and IMF and the nations issued a declaration with that aim.

Yours sincerely,

Vishnu Bisram