Brics Summit in Durban
South Africa injected an atmosphere of greater vibrancy by roping in the entire African continent to the fifth top-level gathering of the world’s five major emerging powers that was held on March 26-27, 2013 at Durban in South Africa.
The BRICS Summit (Brazil, Russia, India, China and South Africa), with about 12 African leaders and all the continent’s eight regional economic communities that attended as interested parties, announced the setting of an exclusive bank for themselves and the developing world. The bank will start functioning in two years after details such as capitalization, location and holding percentage are worked out. The BRICS grouping, committed to multipolarity and equity in managing world affairs, will also take forward the consensus it has achieved over the past two years in commenting on global political developments such as Syria and Iran and seeking a better deal from Bretton Woods’s institutions such as the World Bank and the International Monetary Fund (IMF). Their combined opinion on political issues, that began with the fourth summit in China and continued in Delhi in 2012, has reflected those of the developing world- and has not been in complete consonance with the US-Europe alliance’s scheme of things.
It emerges that the economic aspects will be given a firm push with the announcement of a stand-alone BRICS business council and two agreements that could serve as a precursor to the bank, pushed hard by China but looked at with reservations by the rest for fear that Beijing having emerged as a bigger leader last year than the World Bank, would dominate the bank completely.
The BRICS grouping of five emerging powers on March 26, 2013 agreed to establish a development bank with the four Presidents and Prime Minister Manmohan Singh put the finishing touches on the broad parameters at their summit meeting on March 27, 2013. Technically the summit began on March 26, 2013 with a gala dinner, but the business end of confabulations took place on March 27, 2013. However, BRICS appeared to have divergent views on the pace at which the bank should be set up. At an internal meeting convened by Dr. Singh and attended by National Security Adviser Shivshankar Menon, the consensus was not to go too fast with the concept.
There is an apprehension that China, along with South Africa as a willing ally, might try to push through its ideas on the location, capitalisation and shareholding pattern al. this summit itself.
The meeting assessed the stand of other countries and felt Brazil had no issues with the pace or ideas that might be pushed through by Beijing. On the other hand, Russia was seen to be thinking on the same lines as India and wanted greater deliberation, preferably spread over two more summits, before the norms were finalised and implemented.
Though South African Finance Minister Pravin Gordhan expected it to rival the two Bretton Woods Institutions, the World Bank, and the International Monetary Fund, dominated by the U.S. and its allies, India felt it would be more like an auxiliary funding institution aligned to the BRICS developmental agenda.
The bank is expected to focus on infrastructure financing, the domain of the World Bank. FICCI president and HSBC Country Head Naina Lai Kidwai wanted the proposed bank to concentrate on credit enhancement so that infrastructure projects with a long gestation period could be seen as viable by other banks.
It is the first time since the inaugural BRICS summit four years ago that such a big bang announcement has been made. This was a reflection of the unwillingness of the World Bank and the IMF to give them a greater say in their functioning.
The Finance Ministers’ meeting which cleared the concept also saw carry-over deliberations on financial issues from the previous summits at New Delhi and Sanya (China). These include currency swap lines among BRICS members which are likely to be about $100 billion and said to be a step towards liberating themselves from the total dependency on the U.S. dollar.
Besides announcing the consensus on setting up a bank, BRICS will establish business and think tank councils.
But the announcement about the three institutions – a bank, business council and consortium of think tanks – does not mean political issues will recede to the background.
A major issue of discussions was Syria, whose President Bashar al-Assad has called on BRICS to intervene in his country’s civil war in which a gang-up of Arab League countries, The European Union and the U.S. is trying to overthrow his regime by at- tempting to recognise a government in rebel-held areas, especially in the north of the country.
BRICS and Mortar for India’s Global Role
India is at a unique geopolitical moment. On the one hand its neighborhood and the larger Asian continent are being unpredictably redefined. The United States has declared, if somewhat ambiguously, its reorientation or “pivot” towards Asia, recognising the region’s economic force moving forward, or perhaps merely countering enhanced Chinese power. India and China are charting new geographies of contests, the Indian Ocean and South China Sea. The “Arab Spring” has exposed the fundamental inadequacies in Middle Eastern and North African governing structures but has also given rise to an uncertain political future in an important energy-producing region. Last but not least, China’s growing assertiveness in the Asia Pacific region has led to increased, if sometimes seemingly unnecessary, conflict with neighbours in Southeast Asia and Japan.
