Brics still remains a work in progress

The fifth Brics summit (of top leaders of Brazil, Russia, India, China and South Africa) that ended in Durban on Wednesday underscores what has been apparent for some time — that the grouping of the world’s leading developing economies from four continents, which is not a regional bloc, continues to be a work in progress. It is evident that the five major players mostly from the developing world — which together make for a quarter of the world’s GDP, 17 per cent of international trade, and 40 per cent of global population — will have much in common when it comes to issues pertaining to global economic and financial governance, until now a virtual monopoly of the IMF, World Bank and GATT (now WTO), with the United States playing a key behind-the-scenes role in how these institutions deploy their resources and manoeuvring capacity. To the roster of common interest for the developing world may be added issues concerning climate change. As questions of environment and climate have a direct bearing on livelihood concerns of the poor as well as technology, the Brics nations can make a significant contribution if they are able to align their positions more closely than now. In turn, such a spirit can inform their stance in relation to the World Bank and IMF as well. Common ground already exists in this respect. The outcome at Durban has positives in that the summit had the opportunity to take on board development imperatives of Africa, the world’s resource-rich continent with the most rapid urbanisation anywhere. The disappointment rests on the fact that while Brics came into existence with the downturn in Western economies starting 2008, as a group it is yet to offer practicable ways to deal with crises of economic transition for poorer countries, and increase their say in world economic governance. In principle it has been decided to establish a Brics Development Bank, an Indian proposal from a year ago. But questions of capitalising the bank, equity holdings, and control on lending policies to be adopted are still under discussion. The decision among member countries to begin trading in each other’s currencies — cleared in New Delhi last year — also awaits implementation. The pledge to create a $100-billion fund to help poor nations tide over financial emergencies will be tested when emergencies arise. Prime Minister Manmohan Singh also had the opportunity to meet China’s new President, Xi Jinping, on the sidelines of the summit, literally days after the latter took charge. The start was good, with Dr Singh’s message of raising the prospect of enhanced growth trajectory for both, and more intensive dialogue. India-China relations, however, need a more substantive top-level interfacing.