Putting cement on BRICS

Published: April 2, 2012

The writer has written for the Indian Express, Times of India, Khaleej Times and Wall Street Journal. She currently writes for the Business Standard in Delhi [email protected]

India has just finished hosting the leaders of Brazil, Russia, China and South Africa on the occasion of the fourth BRICS summit (the ‘I’ stands for India), a conglomeration of nations in widely disparate stages of economic growth and political openness.

China, clearly, is streets ahead of everyone in terms of its GDP growth, while South Africa stands on the bottom of the scale. India and Brazil are somewhere in between, but Brazil is way ahead of India on the inclusive growth scale — with its constitutionally guaranteed healthcare systems — and India’s experiments with balanced growth have, at best, delivered middling results. As for Russia, it is still a powerful country with a huge military arsenal even though in economic terms it is declining rapidly.

Now if that sounds like a mixed bunch, well, so it is. Fairly cynical Indians point out that each country has far larger economic relationships with the advanced economies (read, the US, Germany and others), and that BRICS is really, a sideshow at best. ‘No mortar in Brics’,’ was a headline that captured this point of view the morning after the summit.

Then there was the view on the other end of the scale, which pointed to BRICS being a reinvented nonaligned forum, or perhaps, a variant of the Commonwealth. That too would be an incorrect analysis. If anything, the middle-of-the-road view is probably the truest: Here are five countries who hope that they can get something out of hanging out with each other, even if most of their business is still conducted with western nations.

There is something to be said for this middle-of-the-road opinion, even if it is a traffic policeman’s nightmare. This is the fourth summit for these nations — the first one was held in Yekaterinburg, Russia, in 2009, followed by those held in Brazil and China — and they have already begun to think in interesting ways. The Delhi meeting will be remembered for coming up with the idea of a BRICS development bank that will allow each country to trade in their local currencies, as well as offer loans in each others’ countries, thereby spurring growth.

Perhaps, the BRICS bank also has ambitions to one day replace the World Bank and the International Monetary Fund — institutions that are dominated by the US and Europe respectively — or perhaps, the Asian Development Bank, which is dominated by Japan. True, that day is still far off but there is no harm in dreaming? It was hugely interesting to see how, on the morning after the summit, various western newspapers — from The New York Times to the UK’s Daily Telegraph — thought that the BRICS summit was something between a yawn and a bloated bureaucracy.

Perhaps, that is what makes me think that there may be something to the idea, after all. Why would western journalists — otherwise romancing the idea of high growth in India, who they want to use to take on countries like China — be so discouraging about another talk shop?

I think it is the India-China association that disquiets them. Clearly, there is significant rivalry between both these Asian powers, but for some reason the West has begun to think of India as a counterfoil to China. Certainly, it would be silly for Delhi to get caught up in someone else’s game.

Still, the BRICS summit was also the occasion to think of the long, but sad road SAARC has travelled. Question is, why can’t we get our act together in South Asia?

Published in The Express Tribune, April 3rd, 2012.

Reader Comments (14)

  • Ali Tanoli
    Apr 2, 2012 - 11:57PM

    Tiger mask dont make u tiger this is what going on with these countries…

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  • Falcon
    Apr 3, 2012 - 12:08AM

    I think that even an attempt of getting India and China together is a feat by itself. It is interesting to note that India is beginning to politically distance itself from the idea of being used against any other emerging power, which is a wise play. As a whole, though BRICS might be fundamentally incompatible, their courting each other gives a hope of a better balanced world (even though they have different expectations of how that new global architecture should look like).

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  • AK
    Apr 3, 2012 - 12:11AM

    Well most of the ideas are good but when put in practice are not realistic, this will be another idea undone by the powers to be, especially when most of these BRICS countries have same cake to compete on, China will never give in to their share of the international market, for example. The IMFs and WBs and the ADBs will never accept it in reality. SAARC is a failure because of one power and now there will be five powers at logger heads with each other. BTW, i would also want Turkey to be part of this BRICS and make it BRICST

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  • Chanchal
    Apr 3, 2012 - 1:11AM

    @Ali Tanoli:

    Atleast we can afford a mask from our own money and not beg from the Arabs and the Amaricans for our daily bread like our western neighbour.

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  • ram iyer
    Apr 3, 2012 - 1:35AM

    It is so simple yet so difficult to comprehend.

    West ruled the rest till 1950s.. The same team is using petrol, dollar, euro, media and democracy to rule again.

    Some how the intellect for the same of dollars and euros loose their sight of truth and becom idiot.

    China is set its sight very clearly that unless dollar/euro is somewhat derailed to basket currency, West is back to conquer.

    India need to wake up and realize faster or we need another Mahatma Gandhi to remove the ruling/IT/working for MNC class to bring value for 80% Indians.

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  • Arindom
    Apr 3, 2012 - 1:58AM

    @AK:

    Turkey is better out for the time being! – BRICS is just taking baby steps – it can do without unnecessary additional baggage of Muslim politics……

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  • Apr 3, 2012 - 3:45AM

    Perhaps, that is what makes me think that there may be something to the idea, after all.

    So the whole premise that BRICS is promising idea is that Western journalists are dismissive of the grouping. I’m in awe of such incisive insight.

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  • Nerus
    Apr 3, 2012 - 3:59AM

    A better title may have been “Cementing BRICS ties”

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  • Sajida
    Apr 3, 2012 - 8:41AM

    The West is in deep trouble. UK which basically stopped making things is now stuck with bankrupt banks who have bankrupted the country. Its debt is so how it is taxing hot pastry’ ( sure sign of desperation) and taking away tax breaks given to senior in 1925 (which survived WW II)! In US unemployment is in Great Depression range at 19.9 % by end of 2011 up from 17.5 %in 2009. Europe is paying price of deregulated and gambling banks which they don’t have money to bail out since the leverage is far greater than economic size (i.e. derivatives). With this problem in West it will be a time of trial and turmoil in global economy dor years to come.

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  • Harkol
    Apr 3, 2012 - 9:55AM

    The institutions of 20th century emerged between 1910-1940s. Who knows if the same cant happen again this century?

    In another 30-40yrs BRICS will have half of world GDP. They will practically be the G5, or G6 along with USA.

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  • O B Server
    Apr 3, 2012 - 10:19AM

    KASHMIR is the answer to the question asked at end of the article!

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  • antony
    Apr 3, 2012 - 1:32PM

    @ OB Server, you have answered correctly to the wrong quesion ? . The question you answered correctly is this “.What is the one thing which drags pakistan to the bottom and arrest it from rising as an economic power! “

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  • Jhingalala
    Apr 3, 2012 - 4:55PM

    Better than BRIC is a permutation – CRIB

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  • BlackJack
    Apr 3, 2012 - 10:27PM

    I am amazed that you choose to allow comments from Jhingalala and OB Server above but have removed mine. And you will probably allow this one now. Ridiculous.

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