INTERNATIONAL RELATIONS CURRENT AFFAIRS 2017 BRICS WHAT IS BRICS? The term BRIC was coined by Goldman Sachs Group s chief economist Jim O Neill in 2001 when he identified Brazil, Russia, India and China as the top emerging markets where investors could put their money. A report published later in 2003 by the finance company stated that if things went in the right direction, this group would in the future be the largest financial bloc beating the dominance of western economies. The first BRIC summit took place in 2006 on the margins of the general debate of the 61st session of the UN General Assembly. The first independent summit took place in 2009 in Russia and it has become an annual affair since then. In 2010, when China, while holding the chair, invited South Africa to join the group, it became BRICS. IS BRICS A GROUPING LIKE G7? The G7 was formed after 1973 oil crisis. While BRICS is a group of emerging economies, the G7 is seen as a club of rich nations. Macroeconomic data shows the G7 indeed is a rich man s club as the group accounts for 10% of the world s population but 46% of global GDP. Naturally, its per capita income of $45,453 is the highest among the three groups. BRICS, on the other hand, represents 42% of the world s population and accounts for 22% of GDP. The G20 is biggest of the three in terms of population and GDP but lies between BRICS and G7 in terms of per capita income. INDIA AFTER THE COLD-WAR After the Cold War, India faced a twin challenge. The collapse of the Soviet Union and the logic of adapting to a globalising world. Thus Delhi re-engaged with the United States and the West. But India was deeply wary of America s interventionist policies on a range of issues including human rights, Kashmir and nuclear non-proliferation. To insure against the negative fall-out from the unipolar world, Delhi chose to line up under Moscow s banner for a great strategic triangle of eastern powers, involving Russia, China and India. This was not about hypocrisy but of managing multiple contradictions that confronted India after the Cold War. NEO IAS 0484-3190310, 9446331522, 9446334122 Page 1
The strategic triangle involving India, China and Russia eventually expanded into the BRICS with the inclusion of Brazil and South Africa. But the internal changes within the BRICS and external environment altered the dynamics of the BRICS and posed new challenges for India s engagement with the forum. GOA DECLARATION The 8th BRICS Summit in Goa issued the Goa Declaration. The Goa Declaration acknowledges that the five BRICS nations facing increasing emerging challenges to global peace and security which hinder sustainable development. The BRICS nations are therefore committed to further enhancing their collective efforts to strengthen their solidarity and cooperation founded on common interests. To this end, BRICS will further strengthen their strategic intra-partnerships. One critical endeavor which meets that goal is the New Development Bank. Outreach is a strategic imperative for the bloc. BRICS will hold an Outreach Summit of BRICS Leaders with the Leaders of BIMSTEC member countries A key component of the Goa Declaration addresses India s concerns about terrorism on the subcontinent. China blocked India's attempts to include the names of terror groups like JeM and LeT in the BRICS' Goa Declaration. Syria-based Jabhat al-nusra figured in the list Russia did not help India to name-check JeM, which perpetrated both Pathankot and Uri attacks. India has accused Pakistan of sponsoring terrorism there and urged fellow BRICS members to pressure its neighbor to condemn terrorism. The Declaration strongly condemned the recent attacks against some BRICS countries, including that in India. The Declaration did not mince words and condemned terrorism in all its forms and manifestations and ruled out any justification for such acts. The Goa Declaration lauded the work of the BRICS Joint Working Group on Counter-Terrorism, which met in New Delhi in September 2016, and said it would go a long way to combating the specter of such violent acts. BRICS members also pledged their strong support for scientific and research cooperation between them as a strategic imperative. Bricks threw its support behind the fourth BRICS STI Ministerial Meeting which endorsed a plan aimed at strengthening cooperation in science, technology and innovation, and in particularly focusing on how to leverage young scientific talent for addressing societal challenges. NEO IAS 0484-3190310, 9446331522, 9446334122 Page 2
The Work Plan, which lasts until 2018, will establish a network platform for BRICS young scientists. It will also aim at co-generating new knowledge and innovative products, services and processes; and addressing common global and regional socio-economic challenges utilising shared experiences and complementarities. The Goa Declaration also emphasized the significance of executing the BRICS Research and Innovation Initiative. It decided to establish the BRICS Agriculture Research Platform, BRICS Railway Research Network, BRICS Sports Council, and various youth-centric fora and agreeing to fast track the setting up of a BRICS Rating Agency. Analysis Declaration failed to address India's core concern of the issue of state-sponsored terrorism. Russia's recent military flirtation with Pakistan in the name of anti-terror exercise is a concern for India. In current global power play, Russia is seen increasingly as needing China more than the other way round, but Moscow's submission to the Chinese position on an issue related to India's security has hurt India. With Russia doing precious little for India, China could shield Pakistani terrorism not only at the UN Security Council but also at a multilateral summit on Indian soil. India used the summit to reach out to its neighbours by initiating the BRICS-BIMSTEC outreach. New Delhi has now decided to lead the regional economic cooperation efforts against the backdrop of Pakistan s marginalisation in South Asia. The cancellation of the SAARC summit in Islamabad, with Bangladesh, Bhutan and Afghanistan deciding to stay away like India, has galvanised New Delhi s efforts to look at new ways to foster regional cooperation. India s outreach to BIMSTEC during the BRICS summit is an important signal that New Delhi is serious about its role as a facilitator of economic cooperation in South Asia. India used the Goa summit to re-galvanise its long-standing partnership with Russia, which was in danger of losing direction. Russia s decision to hold military exercises with Pakistan did not go down well with India at a time when it was seeking to diplomatically isolate Pakistan after the Uri terror attacks. Russia, for its part, has been concerned about India s tilt towards the U.S. In Goa, the two states reaffirmed the strategic nature of their friendship once again. India signed three major deals worth billions of dollars with Russia. NEO IAS 0484-3190310, 9446331522, 9446334122 Page 3
The BRICS declaration could not highlight the issue of cross-border terrorism due to the obdurate attitude of China. It is obvious that China considers India as a primary competitor, if not rival, as far as economic development and regional status are concerned. Whether it is India s entry into the Nuclear Suppliers Group or the UN Security Council, China has been placing roadblocks despite support from most other countries. We also have to be cautious about China s plan to prop up Pakistan to block India. XIAMEN DECLARATION The Xiamen summit was followed by a tough two and a half months during which the rhetoric between India and China has been quite sharp. Diplomats smoothed out a victory over more hawkish elements by disengaging the troops at Doklam and obtaining a Chinese assurance that it would not continue its road construction at the tri-junction area. Beyond the bilateral issues over the boundary, Nuclear Suppliers Group membership for India, terrorism, the Dalai Lama and others, the rift over China s Belt and Road Initiative (BRI) were also there at the background of Xiamen summit. At Xiamen, four documents were signed in presence of BRICS leaders. They are: Strategic Framework of BRICS customs cooperation. BRICS Action Plan for Innovation and Cooperation(2017-2020) BRICS Action Agenda on Economic and Trade Cooperation. NEO IAS 0484-3190310, 9446331522, 9446334122 Page 4
MoU between BRICS Business Council and New development bank on strategic cooperation. Five salient points from the Xiamen Declaration: 1. Besides naming Pakistan-based terror groups Lashkar-e-Taiba, Jaish-e- Muhammed and the Haqqani Network responsible for violence and causing concern, Brics called for a comprehensive approach to combat terrorism, including countering radicalisation, recruitment, movement of terrorists, supply of weapons and money laundering. 2. Working together to promote most effective use of fossil fuels and wider use of gas, hydro and nuclear power, which will contribute to the move towards a low emission economy, better energy access and sustainable development. 3. Commitment to promote green development and low-carbon economy in the context of sustainable development and poverty alleviation. 4. Enhancing Brics anti-corruption cooperation and supporting the strengthening of international cooperation against corruption. 5. BRICS strongly deplored the latest nuclear test conducted by North Korea, and expressed deep concern over the ongoing tension and prolonged nuclear issue on the Korean Peninsula. FEATURES OF XIAMEN DECLARATION Strive towards broad partnerships: BRICS countries agreed to strive towards broad partnerships with emerging markets and developing countries and pursue equalfooted and exible practices and initiatives for dialogue and cooperation with nonbrics countries, including through BRICS Plus cooperation (It includes Thailand, Tajikistan, Egypt, Kenya and Mexico). BRICS local currency bond markets: Member countries resolved to promote development of BRICS local currency bond markets and agreed to jointly establish a BRICS local currency bond fund and facilitate nancial market integration. They will also encourage explorations toward the establishment of the BRICS Institute of Future Networks. R&D and innovation in ITC: They agreed to enhance joint research, development and innovation in information and communications technology (ICT), including internet of things (IoT), big data, data analytics, cloud computing, nanotechnology, articial intelligence, 5G and their innovative applications. Cooperation on energy: They agreed to strengthen BRICS cooperation on energy and work to foster open, exible and transparent markets for energy commodities and technologies. NEO IAS 0484-3190310, 9446331522, 9446334122 Page 5
Promote effective use of fossil fuels: They also agreed to work together to promote most effective use of fossil fuels and wider use of gas, hydro and nuclear power to move towards low emission economy, better energy access and sustainable development. BRICS Agriculture Research Platform: It is proposed to be established in India which will serve as virtual network facilitating cooperation in priority areas. Broad counterterrorism coalition: They called upon international community to establish genuinely broad counterterrorism coalition and support UN s central coordinating role in this regard. People-to-People exchanges: It should be promoted for development and enhancing mutual understanding, friendship and cooperation among BRICS countries. BRICS BRICS is acronym for an association of ve major emerging national economies viz, Brazil, Russia, India, China and South Africa. It was established in 2009. Originally it was known as BRIC before inclusion of South Africa in 2011. The rst formal summit was held in Yekaterinburg, Russia in 2009. BRICS countries are distinguished by their large, fast-growing economies and signicant inuence on regional and global affairs. They are home to 42% of the world s population. Their total share in the global economy has risen from 12% to 23% in the past decade and collectively contribute they more than half of global growth. The Xiamen declaration of the Brics reiterates the group s commitment to addressing climate change and expanding green finance, and proposes a Brics bond fund in local currency. BRICS Declaration condemns Pakistan based terror groups for first time In a diplomatic breakthrough, the Xiamen BRICS declaration has condemned terrorism in all its forms, and named Pakistan-based terror groups Lashkar-e-Taiba, Jaish-e- Muhammed and the Haqqani Network. It comes after last year s summit in Goa where efforts to condemn the outfits were blocked by Chinese recalcitrance. In this context, it s significant that the latest declaration comes at a summit hosted in China. After the Doklam standoff, some quarters had expected Beijing to harden its position against Indian interests. Besides, in the run up to the BRICS summit Beijing had warned New Delhi not to raise the issue of Pakistan-based terrorism at Xiamen. That China did eventually relent on including Pakistani terror outfits in the BRICS declaration suggests that New Delhi s firmness and persistence in flagging the issue has paid off. But apart from that, US President Donald Trump calling out Pakistan for sheltering terror groups may have had an effect on Beijing which otherwise turns a NEO IAS 0484-3190310, 9446331522, 9446334122 Page 6
blind eye towards them in an attempt to cushion Pakistan, which it considers a strategic ally. It would be wrong to see the declaration as a diplomatic victory for India. Terror groups operating out of Pakistan share logistics, resources and ideology. Targeting just those which take aim at one s own country while turning a blind eye to the others in an exceedingly narrow definition of national interest is self-defeating. Neither is it tenable to claim as Islamabad often argues and Beijing reiterates that Pakistan has made the most sacrifices in fighting terror, as those are the inevitable consequences of selectively nurturing terror groups (in the end, such nurturing can never be selective). It is therefore in Pakistan s own interest and Beijing too should be nudging it towards this point of view as Islamabad s trusted ally to end such support. Following the Xiamen declaration New Delhi should renew its efforts to get Jaish chief Masood Azhar proscribed by the UN, and Beijing should drop its objections there. At the Brics summit and elsewhere Chinese President Xi Jinping has, correctly and commendably, spoken up for global cooperation. But that is not compatible with riding roughshod over Indian interests. Ultimately, China must realise that terrorism emanating from Pakistan harms everyone s interests, including Chinese ones. the declaration does not mention Pakistan and its support for terror networks. However naming of terror groups, Lashkar-e-Taiba, Jaish-e-Mohammed, Tehrik-i-Taliban Pakistan and the Haqqani network, in reference to the security situation and violence in the region, and reiterating the responsibility of states to prevent and counter terrorist activities are a win for India. NEW CHALLENGES CHALLENGES FROM CHINA: The rise of China dramatically altered the orientation of the BRICS. China s massive economic weight in the forum its GDP at nearly $12 trillion is now more than twice that of the other four members put together has meant the internal balance in the BRICS has changed in favour of Beijing. Beijing sees BRICS as an instrument to expand China s own global economic influence. Apprehension about US-led globalisation was one of the motivations behind India s quest for a multipolar world in the past. It is Beijing that now claims to be the champion of free markets. India battles a massive annual trade deficit of nearly $50 billion with China. President Xi Jinping s Belt and Road initiative, which has become NEO IAS 0484-3190310, 9446331522, 9446334122 Page 7
the main vehicle for Beijing s economic power projection, has added to India s concerns about China s rise. India must cope with the new strategic warmth between Moscow and Beijing, and the willingness of both Russia and China to cut deals with the US (on their own terms). TENSIONS AMONG GREAT POWERS: India s multi-alignment privilege the BRICS while deepening the strategic partnership with great powers - has become harder as the great power harmony was followed by renewed tensions between them. CHINA S PLAN FOR A BRICS-PLUS A major challenge for India is likely to arise from China s plan for a BRICS- Plus or Friends of BRICS grouping, to include Pakistan, Sri Lanka and Mexico to an expanded version of BRICS. The suggestion of including Pakistan is something India has hesitated at but it wouldn t want to be seen to be opposing China s rationale of promoting south-south cooperation further. RUSSIA IS MOVING AWAY FROM INDIA Russia which was the prime mover for the grouping, has moved closer to China and away from India. Russia s distancing from the U.S. and Europe post-2014 and the Ukraine crisis in particular have increased its dependence on its east NEO IAS 0484-3190310, 9446331522, 9446334122 Page 8
and south, mainly in the direction of the $300 billion Russia-China oil pipeline that China is funding. This could affect the language of the joint statement, especially on issues like Afghanistan, on which BRICS members had previously been on the same page. At both the BRICS conference in Goa last October, as well as the Heart of Asia summit in December, Russian officials objected at backing India s strong language on terrorism emanating from Pakistan. This would mean India standing up to China where necessary and cooperating with it where possible, salvaging the essence of the long-standing partnership with Russia but recognising Moscow has its own imperatives, and deepening the strategic ties with Washington but acknowledging America s sharp internal divisions and the enduring compulsions to find compromises with a rising China. This transition in India s worldview towards unsentimental realism has been in the making for a while, but has become the defining feature of the current government s foreign policy. THE FUTURE OF BRICS Brazil is likely to come out of recession. Likely increase in oil prices would lead to improvement in Russian economy. It is believed that New Development Bank and the reserve pool will create some form of supplementary mechanism for World Bank and IMF. There is a BRICS Business Council which is meeting regularly. They came up with the idea of Angel Investor s network to support Entrepreneurship and Innovation basically for young entrepreneurs. In western countries for example Silicon Valley has such Angel Investors networks which basically helps and promotes young innovators to come out with new ideas and supports them. There is yet another proposal for BRICS rating agency which would be another way of looking at credit rating of various economies. We have moody s and standard and poor s which are western construct. THE ROAD AHEAD It is an indicator of the importance of BRICS that both India and China appeared to have exerted enough pressure on officials to bring about the disengagement in Doklam a week before the summit at Xiamen. The Indian government must be credited for ensuring that it won peace at Doklam without building the outcome up as a defeat of China, which would have made their rivalry at BRICS that much more intense. NEO IAS 0484-3190310, 9446331522, 9446334122 Page 9
In this, BRICS has evolved better than two other groupings, SAARC and the Non-Aligned Movement, whose last summits India skipped, and appears to have abandoned. In line with the theme of the summit, which is Stronger Partnership for a Brighter Future, India and China must use BRICS to build a house, not a wall. India must move a resolution condemning internationally designated terror groups working out of Pakistan, and let Beijing embarrass itself by defending these groups. Beijing is relentlessly pursuing what it believes to be its interests, and gives New Delhi little diplomatic quarter. New Delhi needs to correspondingly pressure Beijing, to persuade its client to turn off the terror tap which happens to be the real threat to regional stability. NEO IAS 0484-3190310, 9446331522, 9446334122 Page 10