Category Archives: BRICS

BRICS, Columns/Op-Eds

Article in ‘Global Times’: More than just a catchy acronym – six reasons why BRICS matters

by Samir Saran and Vivan Sharan
Please find here the link to the original article. 

There have been heated discussions over the role of BRICS recently. Ian Bremmer, President of the Eurasia Group, a political risk consulting firm, wrote an eye-catching article in the New York Times in late November, proclaiming that BRICS is nothing more than a catchy acronym. 


The BRICS nations represent over 43 percent of the global population that is likely to account for over 50 percent of global consumption by the middle class – those earning between $16 and $50 per day – by 2050. On the other hand, they also collectively account for around half of global poverty calculated at the World Bank’s $1.25 a day poverty line. 

What, then, is the mortar that unites these BRICS? 

First, unlike NATO, BRICS is not posturing as a global security group; unlike ASEAN or MERCOSUR, BRICS is not an archetypal regional trading bloc; and unlike the G7, BRICS is not a conglomerate of Western economies laying bets at the global governance high table. BRICS is, instead, a 21st-century arrangement for the global managers of tomorrow.   

At the end of World War II, the Atlantic countries rallied around ideological constructs in an attempt to create a peaceful global order. Now, with the shifts in economic weights, adherence to ideologies no longer determines interactions among nations. 

BRICS members are aware that they must collaborate on issues of common interest rather than common ideologies in what is now a near “G-0 world,” to borrow Bremmer’s own terminology.

Second, size does not matter and it never has. Interests do and they always will. Intriguingly, Bremmer expresses his concern over China being a dominant member within BRICS. 

Clearly, Bremmer has chosen to ignore the fact that the US accounts for about 70 percent of the total defense expenditure of NATO countries or that it contributes nearly 45 percent of the G7’s collective GDP.

Third, BRICS is a flexible group in which cooperation is based on consensus. Issues of common concern include creating more efficient markets and generating sustained growth; generating employment; facilitating access to resources and services; addressing healthcare concerns and urbanization pressures; and seeking a stable external environment not periodically punctuated with violence arising out of a whim of a country with means.

Fourth, it is useful to remember that the world is still in the middle of a serious recession emanating from the West. As Bremmer himself points out, systemic dependence on Western demand is a critical challenge for BRICS nations. Indeed, it is no surprise that they have begun to create hedges. The proposal to institute a BRICS-led Development Bank, instruments to incentivize trade and investments, as well as mechanisms to integrate financial markets and stock exchanges are a few examples. 

Fifth, through the war on Iraq, some countries undermined the UN framework. The interventions in Libya reaffirmed that sovereignty is neither sacrosanct nor a universal right. While imposing significant economic costs on the world, they failed to produce the desired political outcome. By maintaining the centrality of the UN framework in international relations, BRICS is attempting to pose a counter-narrative.

Sixth, in the post-Washington Consensus era, financial institutions such as the IMF and the World Bank are struggling to articulate a coherent development discourse. BRICS nations are at a stage where they can collectively craft a viable alternative development agenda. 

In the Fourth BRICS Summit in New Delhi in March 2012, there was clear emphasis on sharing development knowledge and further democratizing institutions of global financial governance within the cooperative framework. 

BRICS is a transcontinental grouping that seeks to shape the environment within which the member countries exist. 

While countries across the globe share a number of common interests, the order of priorities differs. Today, BRICS nations find that their order of priorities on a number of external and internal issues which affect their domestic environments is relatively similar. 

BRICS is pursuing an evolving and well thought out agenda based on this premise. And unlike Bremmer, we are not convinced that they are destined to fail.

Samir Saran is vice president and Vivan Sharan an associate fellow at the Observer Research Foundation, New Delhi. opinion@globaltimes.com.cn

 

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BRICS, In the News

India, South Africa and the IBSA-BRICS equations of 2013: Francis A. Kornegay responds to Samir Saran

New Delhi, 2nd of January 2013
Please find here the original link.

For South Africa and India, 2013 promises to be a year of “Chinese interesting times” in navigating the IBSA-BRICS equation at a pivotal juncture for both groupings. The BRICS forum convenes in Africa in March with South Africa hosting the 5th Leaders’ Meeting in Durban. Later in the year, in October, India will host the 6th IBSA summit marking the 10th anniversary of the Brasilia Declaration which launched this troika. Meanwhile, the fact that South Africa’s hosting of BRICS will reflect a special Afrocentric twist in its thematic emphasis on ‘BRICS and Africa’ has drawn a sharp reaction from one of India’s leading civil society BRICS intellectuals, Samir Saran. And this is a good thing.
More often than not the coterie of academics and intellectuals networking the BRICS and IBSA confabs skirt around contradictions amongst ourselves which might upset individual and collective apple carts known as ‘polite company.’ This is by avoiding candidly expressing some of what is eating us.
In as much as this reticence tends to be at the expense of genuinely edifying intellectual discourse advancing mutual understanding, Samir Saran has done a much needed service in raising ‘The Africa Question’ in Indian media. And SAFPI has done a great service in disseminating this ‘question’ throughout its African network.
Saran, senior fellow and Vice-President of the Observer Research Foundation (ORF), the think-tank that did the initial spade work on BRICS for its founding summit in Russia in 2009, penned an op-ed in the December 12th edition of The Indian Express voicing exception with South Africa taking upon itself the “onerous task of discovering and representing a unified African voice.”
In the process of arguing this point, Saran demonstrates why it is critical that intellectual as well as governing elites of the five countries really make an effort to get to know one another in more depth, where we are all respectively coming from – and really get a handle on what BRICS is all about apart from, as seems to be suggested, simply a collectivity of national interests converging on reforming global governance generally, global economic governance in particular.
From Saran’s vantage point there are several flaws in South Africa’s approach to BRICS:
* Presumptuously taking it upon itself to speak on behalf of all of Africa;
* Misunderstands why it has been included in BRICS which is not to be a ‘proxy’ for Africa but, as an emerging power with a unique perspective, to add value to BRICS by itself;
* It’s misunderstanding reflects a lack of appreciation for the objective of BRICS which is to convey a counter-narrative on global governance to that of the West and to collectively leverage their individual weights in engaging western incumbents at “the global high table.”
Now presumptuous as it might seem for SA to take it upon itself to speak on behalf of Africa, the same question could be posed about who anointed BRICS countries to engage the West at this hierarchical ‘ global high table’ and on whose behalf? Their own individual behalf separately and collectively without regard for the interests of other emerging and developing economies?
And to what purpose if global governance is not about how various and sundry national interests are to be coordinated and if possible harmonized in a manner acknowledging how global economic integration has eroded the prerogatives of national sovereignty? No country is an island in today’s world, least of all in its own region.
Some countries are more capacitated than others within their regions to articulate aspirations that are transnational even though there may be (indeed are) national jealousies about the capacity of given regional powers to convey a regional agenda which, in concert with other regional agendas, may add up to a continental agenda. It is not for nothing that, in southern Africa there is a SADC to which South Africa belongs or a Mercosur to which Brazil belongs which, in turn, feed into the respective continental agendas of the African Union and the Union of South American Nations. The same might apply to India within the South Asian Association of Regional Cooperation though it is often pointed out that India aspires to escape its region in ascending to ‘the high table.’
No, no one anoints these members of IBSA as well as BRICS to represent them at the ‘global high table.’ Yet there is an unspoken if often grudging understanding that by default, South Africa, Brazil and India are better placed than their neighbors to engage at a global governance level which includes other emerging powers within the G20: Indonesia, Turkey, South Korea, Saudi Arabia, Mexico, Argentina.
Now honing in specifically on South Africa, what pray tell informs this “unique perspective” for adding value to BRICS if this uniqueness is not informed by an African identity on a continent saddled by history with a unique set of problems at a time when all of the BRICS countries are scrambling to avail themselves of Africa’s resources? This question strikes at the very heart of what constitutes ‘The Africa Question’ in a manner in which South Asia cannot compare, saddled by history as India and South Asia are with their own unique challenges which, again, ought to inform a South Asian regional sensibility underpinning efforts to come to terms with those challenges.
Now perhaps India is so big, constituting a subcontinental region in itself that some of its sons and daughters may not be able to appreciate a transnational vocation to the same degree that applies to South Africa within Africa. Be that as it may, the national sovereignty that Indians are so attached to simply does not work for South Africa in its relations within a fragmented Africa where national sovereignty is the essence of the continent’s weakness; a weakness that South Africa along with other AU members must work to overcome.
This is a contemporary and historical circumstance compelling a pan-Africanist perspective and agenda for any country on the continent that aspires to continental leadership as does South Africa. This what SA brings to BRICS which is widely understood if not appreciated by some.
South Africa, within its African context, therefore stands apart from other BRICS whose perspectives are informed by what might be termed ‘big country sovereignty’ which is tantamount to continental sovereignty. This is what Africa aspires to and informs South Africa’s African and BRICS agendas. This is a perspective informed by the realities of global economic integration which dictates a pan-African future as the only scenario that makes sense for South Africa and Africa – which by the way does not mandate a ‘united African voice’ as such.
Unless BRICS as individual countries and as a collective begin to more consciously approach global governance from the vantagepoint of making economic integration work within their respective continents and regions, its long-term role as a revisionist actor in the politics of the global economy may be limited. Indeed, this is a challenge facing the IBSA countries within BRICS as it relates to their trilateral relations as the Brasilia Declaration approaches its 10 anniversary in 2013. Thus, whereas Saran asks if BRICS should not also concern itself with South Asian “tensions and imperatives” and those exercising China regarding the South China Sea, as South Africa wants to do regarding Africa, in a qualified sense, the answer is ‘yes.’
BRICS should concern itself with these and other regions in which its members are embedded where issues of transnational economic governance arise having a direct bearing on regional and continental integration. This is what South Africa’s African agenda relating to its hosting of BRICS is intended to address and Tshwane-Pretoria would open itself to major criticism from elsewhere on the continent if this was not its intent. Other BRICS members may not share the urgency of this imperative regarding their regions and continents as does South Africa regarding Africa.
The urgent need for Africa to overcome its fragmentation through advancing an integrationist agenda cannot be contested and if other members of BRICS cannot be sensitive to this special predicament facing the continent and South Africa’s need to address it within the context of BRICS then this raises serious questions about the raison d’etre of South Africa’s membership in this grouping if pure ‘national interest’ narrowly defined is the be all and end all of BRICS. BRICS’ relevance for Africa and the individual agendas of BRICS members in Africa would consequently come under question.
Regional and continental integration and, indeed, inter-regional cooperation are even more explicit in IBSA given the geostrategic architecture of this grouping in two respects: the economic potential of the Mercosur-SACU-India preferential trade talks, difficult as they are; and the added dimension of security community-building in the Indian and South Atlantic oceans.
If New Delhi fails to hone in on strengthening this southern sea lanes comparative strategic advantage in its hosting of the IBSA summit later in 2013 (while also chairing the Indian Ocean Rim-Association for Regional Cooperation) this trilateral grouping could face declining multilateral utility. This would be in spite of India’s strongly held position, with China hovering in the background, of IBSA maintaining its autonomy and identity viz-a-viz BRICS.
2013 therefore should tell a lot about how important IBSA is in New Delhi’s strategic calculus regarding BRICS as it cannot avoid the demand of showing leadership on the occasion of the 10th anniversary of the Brasilia Declaration. Will it show the vision and political will to jointly take IBSA to another level with South Africa and Brazil?
As central as its building on IBSAMAR is to a re-energizing of IBSA, Indian Ocean-South Atlantic maritime cooperation is by no means the only challenge facing India in its hosting of the troika’s summit.
Here are few other considerations for the three governments:
* Given the elaborate sectoral working group agenda of IBSA and its uneven achievement together with its business, parliamentary and academic forums plus the geostrategic maritime cooperation potential of IBSAMAR, should not this troika contemplate a more formalized structure in the form of a secretariat, perhaps situated in Brasilia? Otherwise, there is a certain superficiality to IBSA and its initiatives which, compared to BRICS, may more and more take on little more than purely symbolic imaging with the real substance of India, Brazil and South Africa residing in BRICS where the leadership edge significantly resides with Sino-Russia.
* Can the three governments continue their south-south tokenism via the IBSA Development Fund run by UNDP’s South-South Joint Cooperation Unit with the prospect of the BRICS development bank coming on stream? Could they not negotiate some complementary synergy between the development fund under IBSA and the development bank under BRICS and up the funding level? Additionally, given the pressing developmental needs in all three countries, could not the development fund house a grassroots development ‘window’ or facility for small-scale income-generating community-level projects in the three countries?
* Why did India and Brazil reportedly shoot down a South African proposal that IBSA establish a working group on women/gender instead of addressing gender and status of women’s issues at a purely forum level? Given the epidemic of violence against women in South Africa as well as India and how the matrix of issues surrounding law enforcement, the judiciary and general vulnerability and brutalizing of women were exposed in India at the end of 2012, will New Delhi revisit the more substantive working group versus the superficiality of a forum for gender and women when it hosts the summit in 2013?
Finally, the structure of the parliamentary forum in particular deviates from the original concept of such an IBSA structure tied as it is under the ministerial focal points of all three governments. The original intent was that it would operate more autonomously like the SADC Parliamentary Forum as one step removed from an actual legislative body. Given the 10th anniversary crossroad challenges facing an IBSA in need of reinvigorating, should not the status of the parliamentary forum be revisited as well and how it would interact with the various sectoral working groups?
All said, as some in India ponder South Africa’s commitment to interrogating the BRICS-Africa connection while reflecting on what New Delhi will make of its own hosting of IBSA, there are a raft of issues on the table for the IBSA-BRICS civil society and academic constituencies to grapple with as they try to influence the direction in which these two groupings will develop.
The question we should ask ourselves is whether we are up to it, whether we are able to move from being arm chair theorists into the agenda-setting real world of action!
* This rejoinder to Samir Saran’s analysis, ‘The Africa question’, was commissioned from Dr Kornegay by SAFPI.

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BRICS, Columns/Op-Eds

BRICS FORUM: The Africa Question – now also available in Russian

Please find here the link to the original publication
By Samir Saran

It will be counterproductive for BRICS if South Africa’s chairmanship ends up representing the continent.

With the impending handover of the chairmanship of BRICS by India to South Africa, there is a flurry of activities in BRICS capitals, including a visit of a high-powered South African delegation to New Delhi. While there would be discussions on the modalities of the handover, the central focus must remain on the BRICS agenda.

If recent conversations with South African scholars are any indication, the country’s chairmanship of BRICS may be conditioned by a strong impulse to represent Africa. In two recent conferences in China, interventions by South African delegates on BRICS matters introduced a heavy dose of Africa, issues that currently engage the African Union and the state of the continent generally. In the run up to the 2013 BRICS summit, the country seems to be placing upon itself the onerous task of discovering and representing a unified African voice. While this has drawn criticism, it is also flawed in more ways than one and has the potential of undermining the progress so far.

The first problem is the inherent moral hazard. South Africa must not see its role as the voice of Africa at BRICS. It would be presumptuous and a number of African countries may take strong exception. And is it anyone’s case that it is only Africa that somehow needs a special relationship with BRICS? Home to half of the world’s poverty and any number of development and social challenges, South Asia may deserve such attention as well. Should India then be the voice of South Asia and represent the subcontinent? Surely, some South Asian countries would have a reason to challenge this. This can also be argued in the case of Brazil and South America, Russia and Eurasia, China and East Asia. Such ambassadorial roleplay for larger regions is dangerous and can weigh down the lithe and nimble platform that BRICS seeks to be.

On the other hand, almost every BRICS member has robust bilateral engagements with the continent. While the Chinese may be more recent partners to many African nations, India has both civilisational and contemporary ties. Many Indians are settled in Africa; India has maintained among the largest peacekeeping forces; and of course Indian businesses, much like their Chinese counterparts, are taking increasing interest in the continent. Brazil also has a fair constituency in Lusophone Africa. Africa’s immense resource wealth, and underdeveloped infrastructure, have attracted a large amount of commercial interest from Brazil. Hence, can the premise that South Africa represents Africa and is best positioned to serve its interests pass muster?

The second flaw with the “South Africa for Africa” formulation is that it misunderstands the reason for South Africa’s inclusion in the group. Only a rather naive (and linear) rationale will attach the responsibility for Africa to South Africa. While it is undeniable that one of the key reasons for the inclusion was to have a voice from the continent, the voice was meant to speak for itself alone. South Africa is an emerging economy that offers a unique perspective and adds value to BRICS by itself. It is counterproductive and self-defeating for a small club to allow proxy memberships.

The third and central weakness of this proposition is its lack of appreciation of the core BRICS objectives. It is indisputable that the purpose of this group is to offer a counter-narrative on global governance to the one scripted by the incumbents in the Western hemisphere. BRICS is not and must not become another “trade union” or voice of the “global opposition”. It is a club that allows these five nations to pitch their collective weight behind efforts to shape and change rules for the road, old and new, at the global high table. There is a lot at stake. The world is in flux and governance is being re-imagined, redefined and indeed renegotiated. BRICS allows each country an exponentially weightier presence while parleying with the incumbents. That must remain the group’s salience.

It is time for BRICS to ask themselves some blunt questions. Should the resources and time devoted by each country at this forum be invested in regional issues such as those important to Africa? Should the tensions and imperatives of South Asia find centrestage? Will it be in the interests of BRICS to be engaged with the problems of the South China Sea? Or should BRICS remain that unique proposition, where a group of emerging economies, with critical stake in the global future, create a platform for meaningfully engaging with the developed and developing countries on key issues?

There is no denying that South Africa will remain the continent’s economic powerhouse for the foreseeable future. It is also a veritable geographic fulcrum, which is viewed by some as a strategic node between Latin America and Asia. This gives South Africa a weight far greater than its military might or economic numbers. South Africa by itself completes BRICS. As the next summit draws closer, it must urgently conduct a strategic and realist re-evaluation of what it wants from BRICS against what is on offer.

The writer is senior fellow and vice president, Observer Research Foundation, Delhi

As published in The Indian Express.

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BRICS, Columns/Op-Eds

Article in the Indian Express: “The Africa Question”

by Samir Saran
12th of December 2012
Please find here the link to the original article.

It will be counterproductive for BRICS if South Africa’s chairmanship ends up representing the continent.

With the impending handover of the chairmanship of BRICS by India to South Africa, there is a flurry of activities in BRICS capitals, including a visit of a high-powered South African delegation to New Delhi. While there would be discussions on the modalities of the handover, the central focus must remain on the BRICS agenda.

If recent conversations with South African scholars are any indication, the country’s chairmanship of BRICS may be conditioned by a strong impulse to represent Africa. In two recent conferences in China, interventions by South African delegates on BRICS matters introduced a heavy dose of Africa, issues that currently engage the African Union and the state of the continent generally. In the run up to the 2013 BRICS summit, the country seems to be placing upon itself the onerous task of discovering and representing a unified African voice. While this has drawn criticism, it is also flawed in more ways than one and has the potential of undermining the progress so far.

The first problem is the inherent moral hazard. South Africa must not see its role as the voice of Africa at BRICS. It would be presumptuous and a number of African countries may take strong exception. And is it anyone’s case that it is only Africa that somehow needs a special relationship with BRICS? Home to half of the world’s poverty and any number of development and social challenges, South Asia may deserve such attention as well. Should India then be the voice of South Asia and represent the subcontinent? Surely, some South Asian countries would have a reason to challenge this. This can also be argued in the case of Brazil and South America, Russia and Eurasia, China and East Asia. Such ambassadorial roleplay for larger regions is dangerous and can weigh down the lithe and nimble platform that BRICS seeks to be.

On the other hand, almost every BRICS member has robust bilateral engagements with the continent. While the Chinese may be more recent partners to many African nations, India has both civilisational and contemporary ties. Many Indians are settled in Africa; India has maintained among the largest peacekeeping forces; and of course Indian businesses, much like their Chinese counterparts, are taking increasing interest in the continent. Brazil also has a fair constituency in Lusophone Africa. Africa’s immense resource wealth, and underdeveloped infrastructure, have attracted a large amount of commercial interest from Brazil. Hence, can the premise that South Africa represents Africa and is best positioned to serve its interests pass muster?

The second flaw with the “South Africa for Africa” formulation is that it misunderstands the reason for South Africa’s inclusion in the group. Only a rather naive (and linear) rationale will attach the responsibility for Africa to South Africa. While it is undeniable that one of the key reasons for the inclusion was to have a voice from the continent, the voice was meant to speak for itself alone. South Africa is an emerging economy that offers a unique perspective and adds value to BRICS by itself. It is counterproductive and self-defeating for a small club to allow proxy memberships.

The third and central weakness of this proposition is its lack of appreciation of the core BRICS objectives. It is indisputable that the purpose of this group is to offer a counter-narrative on global governance to the one scripted by the incumbents in the Western hemisphere. BRICS is not and must not become another “trade union” or voice of the “global opposition”. It is a club that allows these five nations to pitch their collective weight behind efforts to shape and change rules for the road, old and new, at the global high table. There is a lot at stake. The world is in flux and governance is being re-imagined, redefined and indeed renegotiated. BRICS allows each country an exponentially weightier presence while parleying with the incumbents. That must remain the group’s salience.

It is time for BRICS to ask themselves some blunt questions. Should the resources and time devoted by each country at this forum be invested in regional issues such as those important to Africa? Should the tensions and imperatives of South Asia find centrestage? Will it be in the interests of BRICS to be engaged with the problems of the South China Sea? Or should BRICS remain that unique proposition, where a group of emerging economies, with critical stake in the global future, create a platform for meaningfully engaging with the developed and developing countries on key issues?

There is no denying that South Africa will remain the continent’s economic powerhouse for the foreseeable future. It is also a veritable geographic fulcrum, which is viewed by some as a strategic node between Latin America and Asia. This gives South Africa a weight far greater than its military might or economic numbers. South Africa by itself completes BRICS. As the next summit draws closer, it must urgently conduct a strategic and realist re-evaluation of what it wants from BRICS against what is on offer.

The writer is senior fellow and vice president, Observer Research Foundation, Delhi

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Books / Papers, BRICS, Columns/Op-Eds

Leaving the Hotel – The West has to get over its fruitless search for common values and instead negotiate global governance in a realist world

by Dr. John C. Hulsman and Samir Saran
3rd of December 2012
Please find hereFour-Seasons-Hotel the link to the original article

Though in theory they come from many places (particularly in the heretofore ruling West), the vast majority of the international foreign policy elite and its corresponding commentariat really only come from one place: Hegelian Land. Make no mistake about it; they form one quite homogenous group, with an unsurprisingly homogenous worldview. Spending weekends attending endless meetings in five-star hotels across the world (The Four Seasons is an especial favorite), their common views are so ingrained in discussions that they are rarely directly commented upon, let alone debated.

In fact, NGO (Non-Governmental Organization) Man has no need of self-reflection, since everyone they know shares their values, having attended the same prestigious universities, married into the same families, worked in the same think tanks, and spent their jet-set weekends together, talking about such weighty matters as ‘the centrality of the global commons,’ ‘the rise of the south,’ ‘the end of the nationstate’, ‘the multilateral global elite,’ and ‘the advance of the developing world toward universal norms,’ amongst other such self-aggrandizing pipedreams. Their basic analytical mistake (and it is seminal) is that as everyone they know shares these parochial Wilsonian values, such a point of view must be all that matters or really exists. Truly, they all hail from one indivisible Hegelian world. But as Woody Allen put it in Annie Hall, ‘Intellectuals have proven to the world that you can have all this brilliance and still have absolutely no idea of what’s going on.’ Like the possibly apocryphal story (later fiercely denied) about the New York Times film critic Pauline Kael, who was said to be sincerely baffled as to how President Nixon won re-election in 1972 (he carried 49 states) when everyone she knew had voted for the hapless George McGovern, there are distinct intellectual dangers to being so entirely cocooned in a comfortable, if wholly unrepresentative, bubble. Advanced-stage otherworldliness and an ingrained intellectual arrogance make true analysis almost an impossibility.

Sure, NGO Man (and Woman) would placidly reply, there are Neanderthal outliers (such as the two of us who were not properly vetted before being allowed in the inner sanctum) who still believe in the nation state, but the very transnational nature of today’s problems will soon make them appear to all to be the reactionaries that they are (never mind that the rising powers in today’s world such as the BRICS countries (Brazil, Russia, India, China, South Africa) share little in terms of common values except for a strongly nationalistic distrust of the West and the governance frameworks that have been designed for an Atlantic world). The fact that these rising powers are self-evidently nation-states–proving to all not basking in delusion that the new multipolar era demonstrates that the Westphalian state system is above all, alive and well-would never be brought up at The Four Seasons.

However, it is their last, common, wholly wrongheaded assumption that all states inherently share overwhelmingly binding universal values and norms, which is their self-evident truth that is most out of step with reality. Paradoxically, by believing the unbelievable (if the real multipolar world outside the hotel is to be finally taken into account), NGO Man dooms true initiatives at global governance to sure failure, making efforts to endeavor to make the planet a genuinely better place come to naught. Obliviousness in the end isn’t just about harmless self-delusion; intellectually NGO Man gets in the way of solving the very problems he spends so much time purporting to ‘care’ about.

The Common Values Chimera

Especially in Europe (though America is far from immune), one tired conversation dominates most European institutions and forums, threatening to become a fatal liability, distancing the EU from the new capitals that influence global decision making in Asia, Africa and Latin America. It is Europe’s obsession with “Common Values” and the Don Quixote-like quest for “Common Humanity.” Wasting time and intellectual capital looking for this faux Holy Grail is doing nothing less than preventing the global community discovering vital common ground on the key issues that the emerging multipolar world is confronted with. Be the issue of climate change, political intervention in unstable nations, or over broader geopolitical stability, spending time trying to find the fool’s gold of universal values gets in the way of cutting the interest-based deals that will actually make the new multipolar world work.

This European obsession also leads to an analytical failure at the geopolitical level, blurring Western understanding of the new ‘clubs’ such as the BRICS and explains their comforting dismissal of the reality that much has changed, due to the fact that the BRICS themselves seemingly share little in terms of ‘Common Values.’ From Brussels’ point of view how can such an organization (let alone its constituent members) matter if it doesn’t adhere to the Gospel of Monnet? But the BRICS do share common interests, with three among them being the most important. First, all BRICS countries stress there must be a stable external environment that cannot and must not be jeopardized by partisan interventions in Iran and other parts of the Middle East and Africa; in other words, contrary to NGO Man, state sovereignty still matters and non-intervention is also a viable political choice.

The Iranian nuclear crisis is a case in point. The usual, half-cocked Western intervention–in this case an ineffective bombing strike by either Israel or the US that would have to be repeated–would amount to a geostrategic calamity (immeasurably strengthening the mullahs, quite possibly destabilizing broadly pro-Western governments in places like Jordan, Egypt, and Saudi Arabia, and setting back any hopes of stability in the region for a generation). Average Iranians and the Arab street may well hate and distrust the current leadership in Tehran; this does not mean that their distaste translates into obvious support for the West to bomb Iran into a recognition of its errors in ignoring the universal Hegelian virtue of negotiating in good faith.

Instead a realist response-which allows that interests and not values must be paramount if effective agreements are to be arrived at in this new era-impels a different way forward. If states themselves (such as Iran) are threatening the regional balance of power, closer ties between threatened countries within a region as well as between its major players and offshore balancing allies (such as the U.S.) are the chess move needed, rather than violating the offending country’s sovereignty due its less than dogmatic devotion to universal values or its inability to join the conversation in a language that it just does not recognize. Rather, extended deterrence based above all on the truly universal interest of physical survival) is the way forward, an approach seemingly and inexplicably abandoned by the Obama administration.

The second common BRIC interest is that an accountable and stable global financial regime must evolve-with a far greater say for the rising economic powers– the promises for which remain unfulfilled since 2008/09. The unambiguous and ambitious Delhi Declaration by the BRICS Heads of State served as a timely reminder to the Atlantic powers of the strength of the impulses that have brought the BRICS member nations together in the first place.

The message that went out was that the BRICS members will gradually begin to institutionalise an alternative path in terms of financial and economic governance. Be it the BRICS Development Bank initiative, the trade settlement processes, or teaming up on resisting the ‘carbon tax’ unilaterally announced by the EU, these countries are beginning to realize the importance of reframing the rules and perhaps changing the game itself.

In parallel, as this possible transition occurs, they will continue to demand progressive reforms in the existing structures of global financial governance. Their meeting on the sidelines of each G-20 meeting may not have resulted in their putting up a common candidate for the IMF as of yet, but these interactions (this new pattern of standardised consultation) will continue to strength their common ambition to push for reforms of outmoded Bretton Woods Institutions which have failed to even uphold the fundamental tenants of equity and inclusiveness on which they were built (or achieve the still more lofty goal of absolute poverty reduction).

At the recent and much written about Delhi Summit, while Western media and critics were dismissing these interactions as insignificant and unsustainable, the BRICS nations were drawing up a blueprint for a common development bank for the LDCs (Less Developed Countries), local lines of credit for trade, and an alliance of national BRICS stock exchanges. While such developments may not necessarily lead to long-term cooperation on other issues of significance, they will certainly fortify and greatly extend common interests in the areas of trade and finance. Representing nearly half of the global population, and a similar proportion of global growth, BRICS economies are no longer willing to be rule-takers on issues which are inherently crucial to their development trajectories. For the wise, this can be read as a sign of the coming outright rejection of the Washington consensus. That the Atlantic powers will have to accommodate this paradigm shift is certain; how they will respond remains a seminal mystery of the new age.

Finally, the BRICS all agree on a far greater global emphasis (if not commitments) on the development and poverty reduction efforts in Asia, Africa and Latin America and the fact that “green capitalism” or “green values” are new hurdles that BRICS must stand up against. No developing power is likely to commit economic suicide to make over-privileged Western Greens happy. In many ways, the recently concluded Rio+20 Summit seemed to mark the end of climate multilateralism, with countries failing to agree on anything substantial, despite the hype and hoopla preceding it. In an increasingly uncommon world, it is irrational to expect global binding commitments on issues as complicated and contested as climate change or sustainable development. In fact-far from being a shared value–the definition of the term “Sustainable” is contested itself. What implies inclusive growth and poverty alleviation for one, means stifling ‘Green Capitalism’ for the other.

However, this basic schism has been obscured over the many rounds of negotiations and many conferences convened and attended by NGO Man. It should be understood that the emergence of the BRICS on the global economic and political stage does not necessarily signal a default willingness to shoulder responsibility for historical emissions. Moral arguments may get you fair round of applause at The Four Seasons, but if you want a deal, then Atlantic countries need to vacate carbon real estate or pay the rent for squatting on it to accommodate for their ‘lifestyle emissions’.

With the average per capita consumption of primary energy of the BRICS members is still only a fraction of OECD averages, the notion of universal responsibility for the fate of the planet is redundant from the outset. No nation-state can be pinned down by narratives of universal moral accountability and culpability, given the real context. A man barely surviving on a dollar or two a day has no obligation, motivation or reason to preserve this planet the way it is for the next generation. And yes, he disagrees with the President of the United States of America and the Green Evangelists of the EU on this; they simply sit in different structural positions. Giving him a better tomorrow may over time see us strike the deal that the annual climate circuses around the world have failed to achieve.

Acquainting NGO Man With the Realities of our Times

It is well past time for Europe and the West as a whole to wake up to the world they actually live in and now move towards the more workable paradigm of “Shared Interests and Shared Prosperity”, terms that flow from the vocabulary of the “realist” camp, acknowledging that beneath every façade, nations and societies share only one common value, that of self-preservation based on self-interest. Sure, some of these interests do become normative and can be classified as values, but that they remain ‘interests’ above all must be recognized and in an indulgent and modest moment, negotiated as well. ‘Values’ lead to deadlocks and rigidities, ‘interests’ are often tradable, and when primary interests clash, well, at least one knows the score. This approach offers a far greater global potential for great powers old and new to collaborate and cooperate than the parochial, annoyingly moralitic, valuesbased approach that is viewed by most outside of the EU as a not-so-subtle attempt to impose European interests by the back door, despite objectively lacking the power to do so. A man in the gutter and a man in a mansion will share only one common value – self-interest and self-preservation. While the former will seek ways to reach the mansion, the latter will undoubtedly discover rules to remain there. But this fetish with values and the lack of agreement on their universal existence and definition is not the only intellectual challenge that efficient global governance is confronted with today. The concept of sovereignty–and the very different individual experiences of nation-states that compel them to define this critical notion differently–is another potential stumbling block.

For example, the US certainly does not share the diluted notion of sovereignty so common within the EU; as former Defense Secretary Robert Gates made abundantly clear, if Europe continues to free ride on American defense spending in NATO soon it will not be seriously consulted on the strategic issues of the day, common values or no. For America, NATO has always been a means to an end, not Valhalla in itself, as Europeans complacently believe. Rather, the perilous state of the American economy and its increasingly fraught domestic politics are already altering its role as a global policeman and as things get ever harder, a more inward-looking America is inevitable, based on its overriding economic interest to right its fiscal ship.

Similarly, the BRICS and other emerging power centers view this transition period of their relative rise as precisely the time to consolidate their sense of nationhood and to reclaim sovereignty from the formerly Western-dominated world. Again, Europe is the global intellectual outlier. Global governance in the new world we actually live in must be founded on the notion that sovereignty actually matters far more than those in many European capitals so fatuously think. If the BRICS are to be made stakeholders in the new era, alongside the older, western powers, this is the first negotiation and accommodation that must take place.

The third reality of our times is that large economies in the Indo-Pacific region (India, China and some others) with low-income populations will now be the fulcrum for governing the most important regions of the world; if they succeed the new primary engine of global growth will be safeguarded, if not, we will live in a far more hostile planet. Due to their own troubles and relative economic decline, the US and EU will increasingly need to carve out partnerships with India, China and the ASEAN countries to secure the sea lanes, manage the rules of trade, secure property and property rights and ensure peace and stability at this hinge point of multipolarity. This dependence on large emerging economies–which for a long while will remain relatively poor–will change the very ethos of global governance.

Due to this sea change, global priorities are bound to change as well. Growth and not human rights will dictate the agenda. Industrialization will trump environmentalism and poverty alleviation will define sustainable development. The implementation of governance will alter dramatically. Due to the core difference in the understanding of sovereignty, partnerships between the Atlantic countries and countries of the Indo-Pacific will be tested. On the other hand, partnerships could strengthen when instead of patronizing sermons, efforts are made to accommodate the views, interests and needs of all based on the fruitful search for shared interests. So how to make sense of this confusing new world? The primary rule of the road must be the unbreakable link between burden sharing and power (or responsibility) sharing. This basic principle (while easily applied in terms of the voting weights controversy in the IMF and World Bank) must become nothing less than the new mantra for the multipolar age. For it is the only hope for future global governance efforts, based as it is on the only durable political factor in the world….actual power realities.

Of course, this fundamental global change takes place on a continuum; it will take several decades for the transition from a Western-dominated world to a world with many powers (with the BRICS leading the economic way) to be completed. But as the global financial crisis made clear, change may be occurring far more rapidly than anyone could have imagined. Along the way, a fading west and a ‘not-yet-up-toit’ rest could well drop the ball over vital global governance issues, resulting in what Ian Bremmer (somewhat apocalyptically) has referred to as a G-0 world, where nothing much gets done.

It is time for Europe to get over it. Nations will not have common values, because nations themselves are a collection of diverse historical experiences and ambitions. However, there is no need to throw in the towel over global governance, for nations can have a vision for shared prosperity with different approaches to get there. To make all this work, there must be some common macro rules for the road for achieving this shared prosperity (the greatest common interest of all) and these must be negotiated on the realist terms of common interests and not through the fruitless semantics of ethics and morality. It’s time for NGO Man to leave the hotel and xperience the new world that has sprung up while he was inside; the multipolar era needs realism to work.

(Dr. John C. Hulsman is President and Co-Founder of John C. Hulsman Enterprises (www.john-hulsman.com), an international relations consulting fir, and a life member of the Council on Foreign Relations. He is also the author of all or part of 10 books, including Amazon bestsellers Ethical Realism, The Godfather Doctrine, and most recently an acclaimed intellectual biography of Lawrence of Arabia, To Begin the World Over Again. Samir Saran is Vice President at the Observer Research Foundation and Chairman and CEO of ‘g_trade’, the creators of the 3rd dynamic green index, ‘BSE Greenex’ at the Bombay Stock Exchange. He is author/co-author and editor of a number of publications including Re-imagining the Indus, Navigating the Near, Radical Islam and BRIC in the New World Order. This expanded essay flows from an earlier op-ed written for the Times of India, May 11, 2012.)

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BRICS, Columns/Op-Eds

Article in “Russia & India Report”: Putin 3.0: Creating hedges for the next decade?

Is Putin going to lessen the Russian dependence on stagnant European demand for oil and gas despite the favourable terms of trade and rely on the hard-bargaining China?

May 17th 2012, New Delhi
Please find here the link to the original publication

The Kremlin has recently announced that Vladimir Putin will be skipping the upcoming G8 meeting in the US sighting domestic concerns and will be visiting China on June 5-7 as his first foreign trip since being inaugurated as President. It is clear that Putin views Chinese demand for Russian oil and gas as a hedge against stagnant Western demand, particularly European demand for Russian exports which showed a huge 47% negative year on year variation in 2009 and is unlikely to grow at rates that will sustain the Russian economy for too long. However, China drives a hard bargain and its quest for energy security through import diversification and oil equity means that it will not accommodate for more than a minimum amount of dependence on Russian raw material linkages.

While his predecessor and protégé Dmitry Medvedev repeatedly emphasised the need for Russia to diversify away from its “primitive” focus on the oil and gas sector, Putin seems to be doggedly set on continuing his outlined profit maximisation doctrine by largely relying on the sector to fulfil social spending promises made during his election campaign. Russia recently surpassed Saudi Arabia as the largest producer of crude oil, and holds the world’s largest natural gas reserves.  Approximately 40 percent of the Russian Government’s tax comes from oil and gas related businesses. While Putin has been able to successfully leverage Russia’s natural resource endowments in the past, he is now faced with burgeoning structural problems including huge manufacturing sector inefficiencies, negative demographic trends, deepened socio-economic inequities and populist rebuttals to alleged systemic corruption under his oversight.

The European Union (EU) is Russia’s biggest market and the EU also accounts for around 75 percent of FDI into Russia. According to the European Commission, Russia accounted for 47 percent of overall trade turnover in 2010; a trend which has normalised after the brief disruptions caused by the global financial crisis. However Russia’s competitive advantage with the EU is largely restricted to the trade of fuels and minerals. Even with its massive oil reserves, Russia has lagged behind in the production of petrochemicals and refined oil. While the margins earned on refined oil based products in a globally integrated oil market may not justify expansion of production facilities and there is a distinct competitive advantage in favour of the “Global South” in terms of labour costs and environmental tariffs there are few explanations for the lack of emphasis on developing a profitable export oriented petrochemicals sector in the country. It doesn’t help that the recent socio-political turmoil adds to the disincentives created for any FDI investment flowing into the country.

Indeed Russia exhibits many of the symptoms of the “Dutch Disease”, a term that broadly refers to the deleterious effects of large asymmetric increases in a country’s income, most commonly associated with discovery of natural resources such as crude oil. While there is no consensus about whether the country suffers this affliction and indeed there have been significant per capita income gains as a result of exploitation of raw material wealth, there are real and palpable threats to sustained growth that need to be proactively mitigated by the establishment. A 2007 IMF Working Paper found that some of the exhibited symptoms included a slowdown in the manufacturing sector, an expansion of the services sector and high real wage growth in all sectors. Simultaneously, oil exports have increased by close to 70 percent over the last decade and the value of exports has gone up by around 620 percent during the same time span. Russian crude oil production recently hit an all time high, and Putin is determined to maintain production levels above 10 million barrels per day (about a third of OPEC’s total production) for a “fairly long time”.

In many ways, resource based linkages have guided and defined Russian foreign policy since the disintegration of the Soviet Union. Resources have also dictated Russia’s economic fortunes, which have traditionally fluctuated with the price of crude oil. Crude oil has quadrupled in value since the early 2000s, and at the same time, Russia has transitioned into becoming a Middle Income Economy with an incredible number of super–rich. It is interesting to note however, that despite the asymmetric dependence on raw material exports, Russia’s currency has been depreciating. Due to the underinvestment in the manufacturing sector and the overall lack of competitiveness of the domestic goods, import growth has tended to outpace export growth. The current account balance as a percentage of GDP has declined substantially since the mid 2000s and with structural production ceilings being hit in the oil and gas industry, there is uncertainty about where the additional export growth is going to be generated. Putin seems certain that recently announced tax breaks for upstream oil and gas exploration projects and fiscal incentives for M&A activities will help fuel this production growth. Tax breaks have been provided for offshore energy projects with Western companies including Exxon Mobil Corp., Eni SpA and Statoil ASA.  Simultaneously he also plans to raise extra revenues from the resources sector to pacify some of the populist anger that is brewing through increased government spending, in particular by significantly increase extraction tax on gas suppliers.

Putin has an uphill task, to reassure foreign institutional investors of the legitimacy and stability of his political apparatus. In order to achieve competitive advantage in the export of petroleum related products, the Russian Government has ambitious goals to create six regional clusters of world class ethylene (the world’s most widely produced organic compound) production facilities and expects production capacity to reach 11.5 million tonnes per annum by 2030. This projection assumes a fundamental amount of investments and supporting infrastructure capacity building in the form of product pipelines, road and rail links. Distribution and feedstock concerns already plague the industry.

The seemingly irreversible economic meltdown in Europe must act as a trigger to stimulate new ideas and a break out of the traditional resource centric growth mindset in the Kremlin. Developing and emerging countries account for around 50 percent of global GDP in purchasing power parity terms and Russia must look to deepen integration through trade with these markets. China is but one of these and its sino-centric economic startegy may soon be an albatross around its neck. Moreover trade must be on the basis of a diversified basket of products on offer with emphasis on value addition.

The East Siberia-Pacific Ocean (ESPO) oil pipeline which is now operational has enabled Russia to bring oil to its remote eastern coast, from where it supplies to China, Japan and South Korea. The Chinese have been actively lobbying to get all of the oil transported through the ESPO, but Russian oil companies are naturally hesitant as they are unwilling to forgo the higher margins they receive by selling to Western countries. The Russian experience with the hard bargaining Chinese must not colour their prospective engagements with other emerging and developing countries. In the next few decades, global growth will be a function of how such economies in Asia and Africa perform, and in turn, so will Russia’s economic fortunes. Putin would do well to hedge away from dependence on European demand even though terms of trade may be favourable and fall in the comforting squeeze of the Chinese option.

Samir Saran is Vice-President and Vivan Sharan an Associate Fellow at the Observer Research Foundation, New Delhi.

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BRICS, Columns/Op-Eds, Politics / Globalisation

Column in The Times of India: “Time to get over it”

New Delhi, 11th of May 2012
Please find here the link to the original article as well as the PDF-file: Article – Time To Get Over It.

Time to get over it
by Samir Saran and John C. Hulsman

One tired conversation that dominates most European institutions and forums threatens to become a fatal liability – distancing the EU from its partners across the Atlantic and among the new capitals that influence global decision-making in Asia, Africa and Latin America. It is Europe`s Don Quixote-like quest for `common global values.`The search for this faux Holy Grail is preventing the global community from discovering vital common ground on the key issues that the emerging multipolar world is confronted with. Whatever be the issue, spending time trying to find the fool`s gold of universal values gets in the way of cutting the interest-based deals that will actually make this new world work.This wrong-headedness also leads to analytical failure, explaining the West’s self-comforting dismissal that much has changed, due to the view that the Brics ( Brazil, Russia, India, China and South Africa) themselves seemingly share little in terms of `common values’.

But the Brics do share common interests. First, all Brics countries stress there must be a stable external environment that must not be jeopardised by partisan interventions in Iran or other parts of the Middle East and Africa. Second, an accountable and stable global financial regime must evolve – with a far greater say for the rising economic powers – the promises for which remain unfulfilled since 2008-09.

Third, there must be a far greater global emphasis on development and poverty reduction efforts in Asia, Africa and Latin America – linked to the new hurdles of `green protectionism’ that Brics must stand up against. No developing power is likely to commit economic suicide to make over-privileged western `greens’ happy. As a global agenda (and despite not possessing common values), that is a lot to agree upon.

It is time to wake up to the world we actually live in and move towards the more workable paradigm of `shared interests and shared prosperity`. These are terms that flow from the vocabulary of the realist camp, acknowledging that beneath every facade, nations and societies share at least the one common value of self-preservation based on self-interest. A man in the gutter and a man in a mansion will share this, even if nothing else.

This approach offers a far greater global potential for powers, old and new, to collaborate and cooperate than the parochial values-based approach that is viewed by most outside of the EU as a not so subtle attempt to propagate wes-tern interests in an ethical cloak.

But this fetish with values is not the only intellectual challenge that efficient global governance is confronted with today. The concept of sovereignty – and the very different individual experiences of nation-states that compel them to define this critical notion differently – is another potential stumbling block.

The Brics and other emerging power centres view this transition period of their relative rise as the time to consolidate their sense of nationhood and reclaim sovereignty from a western-dominated world. Again Europe is the outlier, as sovereignty actually matters. If the Brics are to be made stakeholders in the new global governance architecture, this conceptual difference must be recognised.

The third reality of our times is that large economies in the Indo-Pacific (India, China and some others) with low-income populations and prevalent poverty will now be the fulcrum for governing the most important regions of the world. Their success is essential for global growth to be safeguarded, else, we will live in a far more hostile world. The West will need to carve out partnerships within the region to secure sea-lanes, trade, property rights and ensure stability. This dependence on these large emerging economies will change the ethos of governance.

Growth and not human rights will dictate the agenda. Industrialisation will trump environmentalism and poverty alleviation will define sustain-able development. Only when western efforts are truly made to accommodate the views, interests and needs of the rest on these issues will we see a more efficient multipolar framework emerge.

So how to make sense of this new world? The primary rule of the road must be the unbreakable link between burden-sharing and power-sharing. This basic principle must become nothing less than the new mantra of the multipolar age.

Of course, this fundamental global change takes place on a continuum; it will take years for the transition from a western-dominated world to a world with many powers (with the Brics leading the economic way) tobe completed. But as the global financial crisis made clear, change is already occurring more rapidly than anyone imagined. Along the way, a fading West and a `not-yet-up-to-it’rest could well drop the ball over vital global governance issues, resulting in what American political scientist Ian Bremmer (somewhat apocalyptically) has referred to as a G-0 world, where nothing much gets done.

It is time for Europe to get over it. Nations will not have common values, because nations themselves are a collection of diverse experiences. However, there is no need to throw in the towel, for nations can have a vision for shared prosperity with different approaches to get there. To make all this work, there must be some common macro rules and these must be negotiated on the realist terms of common interests and not through the fruitless semantics of ethics and morality.

Saran is vice-president, Observer Research Foundation, and Hulsman is president of a strategic consultancy firm.

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BRICS, In the News

Discussion with Open Magazine on BRICS: “Not just a talk shop”

29th of March, 2012
Please find here the link to the original article.

It may be an idiosyncratic club, but should it therefore be written off? As leaders of BRICS—Brazil, Russia, India, China and South Africa—gather in New Delhi for a summit to prove that their five-member group is something ‘solid’ (a word Indian PM Manmohan Singh has used in an Indo-Pak context), rather than just another talk shop, critics across the world have not been able to hide their derision. The interests of these countries are far too divergent, they mutter, to result in anything that could matter.

For exponents of the idea, however, the five represent not just a fifth of global output, but also a dynamic geo-economic bloc on the ascendant. It owes its name to a 2001 Goldman Sachs report that projected a world economy under BRIC domination (South Africa was admitted only in 2010) within half a century. Today, it is a club more than a clever acronym, and one with an agenda too. “[The group] seeks political dialogue towards a more democratic multipolar order,” says senior Indian bureaucrat Sudhir Vyas, adding that the global power shift currently underway calls for “corresponding transformations in global governance”.

The buzzword at the Delhi summit is cooperation. Says Bipul Chatterjee of Consumer Unity & Trust Society: “These leaders are likely to float the idea of a development bank to be capitalised by BRICS, or perhaps all developing nations, to fund the development aspirations of the poor world.” This aim has its origin in Manmohan Singh’s 2010 suggestion that the world’s surplus savings be funnelled into emerging economies short of capital for investment in infrastructure and other public utility projects. Says Samir Saran, a BRICS expert with the Observer Research Foundation: “The proposed bank could tap these savings by creating sovereign guaranteed debt instruments to leverage more money for these economies.”

The other area of mutual interest is trade. As a booster, of help would be an agreement among the five countries’ central banks to grant one another access to loans in local currencies. Saran says the BRICS platform would “offer the five ‘R’s: rupee, rouble, renminbi, rand and real” for trade payments as part of a test settlement mechanism, “before internationalising these currencies”. The goal here is to reduce dependence on the US dollar as an international means of exchange.

Sceptics do not see much coming of it. Yet, it is worth noting that the five have managed to get this far as a club without letting bilateral bickering get in the way. This in itself is commendable. Perhaps BRICS bashers should wait a while before writing it off.

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BRICS, Columns/Op-Eds

BRICS, Steel, Mortar….and Money – Analysis of the 4th BRICS Summit in New Delhi

by Samir Saran and Vivan Sharan
4th of April 2012
Please find here the original link to the article.

With the Delhi Declaration, BRICS nations, which met recently in the Indian capital, have shown that they have the steel to stand up to traditional power structures, a cohesive vision to jointly respond to development challenges through institutionalisation of concrete mechanisms, and the determination to channel monetary power to strengthen markets, businesses and trade. The Declaration indeed gives insight into the gradual transformation of BRICS, from essentially a response mechanism crafted to address the various development challenges posed by the global financial crisis, to a forward looking entity seeking to enact and enable real global transformation.

The Delhi Declaration extends over 50 paragraphs which are all encompassing in some sense and address many relevant themes for BRICS countries and the developing world at large. The Declaration is significantly more impressive and comprehensive than the 16 paragraph Joint Statement of the BRICS Leaders at the first summit held at Yekaterinburg in 2009 and the sketchy and macro statement of purpose at Sanya last year. The Action Plan within the Delhi Declaration consists of 17 steps which will deepen intra-BRICS engagements. There are three prominent narratives that define the Delhi Declaration – reaffirmation of the UN framework for global governance, disappointment with financial regimes shaped in the mid 20th century and a confidence to tap into economic opportunities that exist within BRICS.

The Delhi Declaration has stamped the intent of BRICS nations to coordinate and collectively respond to global security challenges within appropriate frameworks that give precedence to fundamental principles such as international law, transparency and sovereignty. BRICS members have recognised and re-emphasised the centrality of the UN in dealing with regional tensions and they have explicitly outlined this for specific cases including the Arab-Israeli conflict, the Syrian imbroglio and the contentious Iranian nuclear programme.

The Declaration unambiguously states that “plurilateral initiatives” that go against the fundamental principles outlined earlier, will not be supported by BRICS. The Declaration is clearly against actions such as asymmetric trade protectionism, unilaterally imposed sanctions and taxes imposed on businesses. The EU’s Aviation Tax is one such example from contemporary policymaking. In terms of trade, there is strong emphasis on operating within legal instruments such as the WTO and institutions such as the UNCTAD for furthering the inclusive development efforts through consensus and technical cooperation.

The aftershocks from the financial crisis are still a cause of concern to the BRICS nations. The pre-occupation with Europe has distracted attention from the social transformation programmes and poverty alleviation efforts among BRICS members. The Delhi Declaration has spelt out the “immediate priority” of restoring market confidence and getting global growth back on track. The steps to address such concerns will include attempts to rebalance global savings and consumption, furthering of regulatory and supervisory oversight in the financial markets, increasing the voice of developing and emerging nations in global financial governance and the institutionalisation of financial mechanisms to redirect existing capital to tackle development imperatives.

The BRICS members have therefore announced a working group led by the Finance Ministers of the individual nations, in order to examine the “feasibility and viability” of a BRICS Development Bank. When formed, such an institution will likely be able to shift and contextualise the development discourse within and outside BRICS and therefore is one of the most significant actionable outcomes. It is evident that such a multilateral institution is not meant to compete with existing ones, but rather, to enhance lending and investment to create sustainable development trajectories. Contrary to expectations several high ranking Chinese policymakers, including the Assistant Foreign Minister, Ma Zhaoxu, have supported the idea.

The BRICS members have clearly outlined that the purpose and nature of Bretton Woods Institutions such as the World Bank, must shift from being essentially a mediation instrument to enable North-South cooperation, to one which can actually prioritise “development issues” and overcome the “donor-recipient dichotomy”. They have also called upon the World Bank to mobilize greater directed resources and enable development financing at reduced costs through financial innovations and improved lending practices. Indeed for BRICS, the focus on World Bank and IMF reforms has remained constant through the years, yet the Delhi Declaration articulates these concerns more lucidly than ever before.

Given that intra-BRICS trade has been consistently on the rise over the past decade, BRICS Leaders have endorsed the conclusion of the Master Agreement on Extending Credit Facility in Local Currency under the BRICS Interbank Cooperation Mechanism and the Multilateral Letter of Credit Confirmation Facility Agreement between their respective EXIM/Development Banks. Such steps to mitigate market risks and enable local currency transactions will only add to the existing momentum and build resilience in BRICS economies to global business cycle fluctuations and exchange rate volatilities. Notably, BRICS have also endorsed the market led efforts to set up a BRICS Exchange Alliance between the major stock exchanges of BRICS, which will enable investors to efficiently allocate capital across BRICS economies and invest in the BRICS growth story.

The unity and purpose of BRICS has been the target of speculation and scepticism from various quarters. With the Delhi Declaration, BRICS members have been able to assuage such doubts as they have begun to create a credible hedge against traditional global narratives of security and development. They have simultaneously been able to project that there is resolution within the group to deal with issues that are not only of immediate concern but even those that will need attention in the future. The Delhi Declaration paves the way for the institutionalisation of BRICS cooperation, making BRICS a significant transcontinental and politically united force. In Sanya BRICS spread wide to include South Africa; in Delhi they went deep to include substance.

Samir Saran is Vice-President and Vivan Sharan an Associate Fellow at Observer Research Foundation. The Foundation hosted the BRICS Academic Forum in March this year. 

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