Tag Archives: India

BRICS, Columns/Op-Eds

Article in “Russia and India Report”: It’s time for a ‘BRICS Fund

by Samir Saran and Vivan Sharan
November 14th, 2011
Please find here the original article

With a post-crisis global recession deepening in the eurozone and other parts of the world, the BRICS countries can take the lead to set up a ‘BRICS Fund’ to reenergize faltering growth in both developed and developing economies, argues Samir Saran and Vivan Sharan.

The current global economic scenario is uncertain, volatile and misleading. The uncertainty stems from a breakdown in macroeconomic correlations and a continuation of a post-crisis recessionary environment in large parts of the world.  The volatility emanates from the unpredictable price action across asset classes and increased sensitivity of almost all asset classes to financial and political fragilities, like those that are prevalent in the euro zone. Meanwhile, the misdirection and misallocation of capital across asset classes is a direct consequence of the lack of clear signals by political institutions and markets alike, leading to broad scale risk aversion especially in the case of sovereign investors such as central banks.

Increasingly, as such strains constrains economic development and investment flows, it is necessary for the BRICS nations to realise their new roles in the emerging global economic order. The imperative to shape the dynamics of future growth must come from these new drivers of economic momentum. One of the ways to do it could be the creation of a BRICS fund – a consolidated wealth fund with appropriate and proportionate monetary contributions from the central bank reserves of all the BRICS countries. Such a multilateral fund, with pre-determined investment mandates, could prove to be a useful tool for rebalancing capital flows, and reenergizing faltering growth in both developed and developing economies.

About one eighth of all assets managed in the US are allocated to “impact investments” or “social investments” – an impressive statistic that must be replicated by emerging economies. With a view to the future, it is clear that social, economic and environmental sustainability are going to be essential for economic development and growth – at individual company, industry and international level. A BRICS fund which invests back into sustainable initiatives both within the BRICS and outside in the least developed economies could prove to be an unparalleled tool to promote and accelerate sustainable growth trajectories. Rather than being a problem of capital generation, the key challenge in financing transitions to sustainable, low carbon trajectories is the redirection of existing and planned capital flows to financially viable allocations in non-traditional asset classes. Alternative investments into sovereign debt of struggling economies based on mutually agreed upon special purpose vehicles could be another avenue for funding which would also leverage the BRICS’ bargaining position in multilateral negotiations.

In the recent international climate negotiations at Durban, it was decided by member countries that that the second commitment period of the Kyoto Protocol will run from January 2013. Furthermore, it was decided that the Durban Platform for Enhanced Action – an agenda strongly backed by the EU and the Association of Small Island States (AOSIS) would be instituted to develop another new Protocol by 2015 – an international legal instrument that will be applicable to all parties to the UN climate convention and will come into effect after 2020. Simultaneously, the parties to the COP agreed to institute a $100 billion Green Climate Fund (GCF) – a measure largely intended to appease developing nations such as those in the AOSIS to come on board the EU agenda. The strategy worked well, although smaller economies should be aware that in the past a bulk of the funds that have been made available to developing countries through the Clean Development Mechanism of the UN have gone to private project developers in China, India and Brazil (in that order). China got the lion’s share of close to half of the total investments made till now. If the investment flows were analysed at from a primarily deterministic prism, it would be hard to conclude that the funds from the GCF would benefit small developing economies, or impact real organic change. The Durban negotiations provided a textbook case where bargaining positions of developing countries, and especially those in the BASIC group of countries including Brazil, South Africa, India and China, could have been leveraged, had these countries already committed to fund sustainable development through a parallel fund. Instead, the outcome was sub optimal – given that there still is no mechanism for the eviction of carbon squatters who have conveniently pushed the onus onto countries that are still in the low to mid income development profiles for what is effectively a $100 billion payoff.

The BRICS fund could also provide suitable SPVs to smoothen any future financial shocks to the highly integrated global economy. Just as in climate change scenarios, financial shocks and imbalances are likely to alter the growth trajectories of developing economies in a much more significant way than of advanced, developed economies which already have monetary cushions owing to high per capita incomes and strong existing infrastructure. The BRICS fund could help the central banks of the member countries counter the effects of erratic demand cycles, global resource pricing distortions, and systemic contagious failures in global financial markets, through strategic investment stimuli. Such a mechanism would not only be complementary to the policy mandates of the central banks of the BRICS nations, but would send a strong signal about their overall financial policy independence of Bretton Woods institutions such as the IMF.

Whatever the investment mandate – the overall emphasis for such a fund would have to be the generation of absolute returns to be considered worthwhile by all of the relevant stakeholders. Furthermore, it is beyond doubt that multilateral institutions have limited degrees of freedom. If a BRICS fund becomes a reality, a necessary condition would have to be complete operational and functional independence to deliver what is needed. This would only be possible with the effective and efficient delegation of policy sovereignty. The modern-day central banking trend of institutional independence would be a good model to follow. Ensuring political and financial goals are separate, and asset allocation occurs purely on the basis of the accepted common mandate and profitability would create a strong shared institution.

From purely the perspective of profitability and diversification of sovereign assets, such a fund would provide a good alternative mechanism for central banks within the BRICS to allocate appropriate portions of their reserves to riskier assets than they traditionally are mandated to invest in. Thus, the fund could substitute for Sovereign Wealth Funds, an increasingly popular concept for diversifying sovereign reserves through alternate mechanisms, while simultaneously creating significant signaling benefits which would be advantageous in matters of setting trends and norms in international financial investment agendas in the future. Today, financial institutions are zealously protective of their cash assets. This is far from being a panacea for the prevailing economic scenario with a failing European idea and a politically problematical environment in the US. A BRICS fund could provide the much-needed liquidity and confidence, especially to capitalise on resilient business models looking for seed money.

For decades, economies in the BRICS consortium have been subjected to the rhetoric of structural reform by actors that have consistently overspent on consumption. The retooling and rebalancing of the global financial system is an imperative that cannot be ignored any longer. With the increasing cooperation between BRICS countries along political and economic lines, the conceptualisation of alternative mechanisms to promote the development agenda at a time when financial institutions are cautious with their money is certainly justified. Disruptive changes to status quo policies and investment patterns are traditionally most effective in uncertain, volatile environments. Looking forward, this decade presents a mixed bag of opportunities and challenges for nations and economies. With the emphasis and impetus of growth shifting to the emerging and recently emerged economies, it is only natural that the BRICS countries take the initiative and the lead to innovate their way out of international crises.

Samir Saran is Senior Fellow and Vice President at the Observer Research Foundation. Over the past year, he has been actively involved in setting up a green business “gTrade” to promote sustainable investing in India. 

Vivan Sharan is Associate Fellow at the Observer Research Foundation. He has interned at the UNDP, and PWC undertaking disparate research tasks. His primary research interests are in monetary policy, equity/debt markets in America and the BRICs.

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BRICS, Columns/Op-Eds

Samir writes in Russia & India Report on ‘Evolving an Asian Trading Region’

September 26, 2011.
by Samir Saran and Nandan Unnikrishnan. Both are Vice President(s) at the Observer Research Foundation, New Delhi.
Find here the original article.

It’s time economics replaced politics as the key driving force of the Russia-China-India (RIC) trilateral. The Big 3 of Asia has a major opportunity to create and drive an Asian Trading Region.

At a recent interaction in Moscow with scholars and editors, there was an interesting discussion on finding ways to significantly increase the economic interaction between Russia and India and, more specifically, change the nature of the G2G-driven bilateral trade. Our suggestion was spontaneous and to some outlandish. We suggested that for a paradigm shift in our trade volumes (less than $ 10 bn dollars currently) the two countries would need to work for an Asian Trading Region shaped and steered by Russia, India and China. Until then we (Russia and India) would remain prisoners of perceptions and perceived geographical distance.

It was apparent that this idea did not resonate well with many experts in the room. However, it did spark an interesting round of debate and many have subsequently written in with their own ideas on a trading zone or region in Asia. We still argue that the only sensible architecture would need to be fundamentally driven by and emerge out of the RIC arrangement. Even though the RIC was conceptualized as a club of the Big 3 in Asia and had more political overtones than economic reality, the vocabulary of cooperation emanating from previous RIC forum allows enough leeway to work towards the formation of an Asian Economic Zone beginning with an Asian Trading Region largely driven by Russia, India and China.

The then Russian Prime Minister Evgeny Primakov first voiced the idea of a Russia-India-China (RIC) Trilateral Forum publicly in December 1998 during a trip to India.The motivation was generally believed to be a desire to create a countervailing influence to the US, which at the time had unprecedented dominance in the international system. The fact that Russia, India and China saw the US as their primary interlocutor at the bilateral level did not appear to be an impediment at the time. However, despite regular Track II interactions between the three countries, it took four years for the first official interaction between the three – a meeting between Foreign Ministers on the sidelines of the United Nations General Assembly (UNGA) in 2002. The first RIC standalone meeting of the foreign ministers took place only in June 2005. Thereafter, on the sidelines of the G8 meeting in St Petersburg in July 2006, President Valadimir Putin, President Hu Jintao and Prime Minister Manmohan Singh had a tripartite meeting. From 2007 onwards, the foreign ministers are conducting regular annual meetings.

During this period, the motivations driving the three countries in the RIC underwent a change. If Primakov’s fear in 1998 was a hegemonic U.S., by 2005 Russia was more concerned about China and its possible duopoly with the U.S. – the G2 scenario. Therefore, Russia was keen to support multilateral initiatives, which involved China, but kept the US out. RIC fitted the bill perfectly. China also appeared to be keen on such a formation as it realized its increasing influence and envisioned RIC as a group dominated by China. India’s motivation perhaps was not to upset the Russians. It was also the age of clublateralism and therefore the RIC was an opportunity to get into an influential circle. Some hesitation, if any, was probably because these were the heady days of Indo-U.S. friendship.

Today the situation has changed again. The uni-polar moment of the U.S.A. is evidently over. A multi-polar or polycentric world is emerging. China has emerged as an alternate power centre and no longer requires props like the RIC. It is following an assertive foreign policy that relies more on promoting bilateral relations with the established and emerging powers. Similarly, Russia is now less nervous about the emergence of a G-2. It is enjoying the “reset” in its relations with the US and has become a little more wary about China’s spectacular rise in stature. Moscow, like New Delhi, also realises that its efforts to restructure and modernise its economy will succeed only if it able to convince the West to buy into this effort. While China-India trade is at historic highs (at over $ 60 billion), India is also focusing on developing its ties with the US and the 27-nation European Union. RIC appears stymied by the proliferation of groupings like the SCO, BRIC, and BASIC and does not as yet offer a unique ‘agenda’ to differentiate it. And most importantly, the three countries consider the US much more important than any other bilateral or multilateral relationship. Therefore, the “glue” that held the RIC together is drying up.

This inevitably affects prospects for RIC. The lack of interest and expectation from this format has led to little of any substance emerging from the interactions, despite identifying early on a vast arena for mutual cooperation such as terrorism, drug trafficking, climate change, agriculture, disaster management and relief, health and medicine, information technologies, pharmaceuticals, infrastructure and energy. Given this backdrop, is RIC now irrelevant? Is it time to bury this body? The answer has to be an unequivocal “NO”. So can regional trade and economics be that ‘glue’. Russia and India, through their own recent policy announcements, have recognized the arrival of the yuan as a global currency and it is likely that in the coming months India also decided to denominate some of its reserves in the currency of our Northern neighbour. Russia is already engaged in yuan based trade and maintains a stock of this currency. That over $ 130 billion of trade takes place between India and China, China and Russia and Russia in India also places weight of volume behind the grouping.  Irrespective of political ambitions and differences there is no denying the growth of economic interactions and the only limit to the economic story is politics. Can RIC be the political response to an economic arrangement?

RIC appears to be the only format which can help to create a truly Asian Trading Region, an idea that must be pursued based on the remarkable shift of global trade to within the region. The contiguous land mass, the size of the three economies and the growing levels of consumption, each provide a basis to make this trading region viable and worth investing in. The energy and transport corridors may be the place to start. While China’s rapid advances in the energy landscape in Asia can appear intimidating, it can also be seen as an opportunity to respond to the Chinese dynamism and be a part of the project. Would India consider providing access to the Indian Ocean to China? And through China for Russia? Would this create a dependency that could serve India’s interests? Would it be beneficial to open land and pipeline routes to Central Asia and Russia through China? Would these not create mutual dependencies between the two countries that would offset some of the key imbalances that exist today? India helps de-risk China its current hydrocarbon and trade flows through the Indian Ocean, while China offers alternatives to routes that would require India to traverse Afghanistan and Pakistan. At the opportune time can Russia and China be a part of the IPI and TAPI? Can China extend pipelines from Central Asia and Russia to India? With increased volumes of trade, the pipelines become viable in spite of the distance. The participation of all the three countries in these pan-continent pipelines also reduces the political risk that these large trans-national project invariably face.

The biggest gainer would, however, be Russia. They would have a market for their resources outside of the EU and China. As the demand in West Asia is released in the next 10 years due to growing commercialization of green technologies and production of shale and frontier gas in US and East Europe, Russia would increasingly depend on the growing demand from China and India. Without a cooperative arrangement or transport infrastructure, large volumes of Russian resources may have only one buyer – China.

Russia and China have already established significant cooperation in the area of energy. It is time that India becomes part of this equation and the three countries start the process of developing an Asian Gas Grid. The first steps could be modest. Russia could ship some of its piped gas landing in China through the Chinese eastern board to India, a step both symbolic and political and a harbinger of Asian tri-lateral trade. Over the years it could result in the grid that a former Indian petroleum minister strongly advocated and a gas market in the region that could evolve its own price and commercial dynamics. The next stage could involve jointly owned SEZs in Russia’s Far East with each of the countries within the SEZ enjoying privileges of home country. This could also be the experiment to test the free movement of men, material and ideas across Asia.

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Non-Traditional Security, Politics / Globalisation

Samir chaired the ORF event ‘How should India meet the Maoist challenge?’, 2010

May 15, 2010
New Delhi   

There is an urgent need to re-examine the current strategies of the government towards the Maoist challenge. This was noted during a roundtable discussion on “Meeting the Maoist Challenge: A Re-look at Current Strategy” on Friday, 14 May, 2010 organized by ORF. Focusing the discussion on how to tackle the Maoist challenge, it was noted that bad governance, misplaced development models, incorrect security measures, and perceptions of justice have all played a significant role in the growth of Maoism in India’s heartland.    

Two issues came out prominently during the discussion. First, the current discourse on the Maoist challenge has been dominated by one view – the “paranoid view.” A consequence of this has been the complete absence of alternative views in the current strategies of the government. Second, contrary to the popular understanding and strategies, the discussion noted that the issue was not development but the sense of being denied justice and/or access to justice. Again, in contrast to the popular notion that the Maoist-Naxal problem was a law and order problem, it was noted that the issue is rather a problem of the obliteration of the politico-social structures of the tribal people.

Assessing the current strategies adopted by the Centre and various affected State Governments to counter the spread of the left wing extremist in more than 200 districts of India, a participant pointed out that the Salva Judum strategy of the government has been one of the main causes of the growth of Naxalism. It was pointed out that no rehabilitation and compensation has been made by the government of Chattisgarh to the people who had lost everything.

A participant pointed out that there is a general contempt among people towards the tribals which also was one of the reasons for the current state of affairs in the tribal areas. Another participant noted that there is a difference between cause and phenomenon. Commenting on the role of media, a participant noted that both print and electronic media have become indifferent to the Maoist issue. Further, the media has been fed by only one side – the police view – and reports often lacked balance.

The discussion questioned the “elitist development model” in tribal areas. It was noted that the current development model measured only by GDP growth and encourages corporate interests has destroyed the livelihood of the tribal people as most of their land were taken away for mining and other industrial projects. Both government and corporate had gone and uproot the tribals in their own land without showing any respect for the tribal people, their culture, their traditional knowledge, their civilisational strengths and their land.

The discussion suggested a multi-pronged strategy for the government. An admixture social, judicial, economic, political and security approaches have been suggested. Though the discussion also got trapped in the debate on what come first – security or development, it brought in other elements that go beyond the mere debate on security vs development.

It was noted that there was a need to broaden the medium of discussion on the Maoist challenge. It was felt that to develop a proper approach to tackle the issue, alternative voices need to be included while formulating strategies and policies. It was also noted that IB or police view alone is not enough but also one sided and that there was a need to include rights-based perspectives in government’s policies. It was noted that the issue was not pure economics but one of delivering rights.

On the political front, it was suggested that there was a need to re-look at the current governmental structures at the district and block levels. A participant suggested that the first priority of the government has to be to restore civil administration in the affected states and districts. A participant noted that change in government structures at the block level could be an effective way to ensure better representation of local people who are better placed to understand local issues and problems. Also, such as gesture could also give a sense of justice to the people. It was also suggested some autonomous areas could be created for the tribal people through that a sense of local control over its own people and resources could be ensured.

It was noted that there an urgent need for the government agencies to address the basic needs of the people. Education has been stressed in the tribal areas. It was suggested that the “elitist development model” in tribal areas need to be re-assessed. This mode of development has not created wealth but transferred wealth an there was a need for an alternative model of development where the local benefit.

The discussion has urged the government to deliver rights to the people. A participant has suggested that a judicial commission needs to be set up to address the issue of injustice that has been meted out on the people.

A participant noted that there was a need to re-look at the Salva Judum policy. Another participant pointed out that the traditional police force cannot deal with the Maoist challenge and there was a need for special training. A participant felt that there was a need for appropriate security force to deal with the Maoist problem to minimize collateral damage. Most of the participants felt the army should not be used also against the Maoists.

The discussion, presided by former Special Secretary Ministry of Home Affairs Mahendra Kumawat, ended with the note that development and security approaches need to include right-based approach in dealing with the Maoist challenge.

Participants included Mr. D.M. Mitra, Mr. Mohan Guruswamy, Dr. Nandini Sundar, Mr. Dilip Kumar, Mr. Arvind Kaul, Mr. Ashol Rastogi, Mr. K Subramaniam, Mr. Rajiv Sharma, Mr Saibal Dutta, Dr. Satish Misra, Mr. Samir Saran, Dr. Niranjan Sahoo and others.

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In the News, Politics / Globalisation

ORF and ZEIT-Stiftung launch the Asian Forum on Global Governance, October 2011, New Delhi

The Asian Forum on Global Governance is an annual workshop jointly organized by the ZEIT-Stiftung Ebelin und Gerd Bucerius, and the Observer Research Foundation.

The inaugural forum is scheduled to take place from October 16 – 25, 2011 in New Delhi, India. Dr. Shashi Tharoor is the Dean of this policy school for young leaders.

The Asian Forum on Global Governance will take a close look at the Asian region and at the challenges facing the global community. The primary objective of this forum is to provide an instructional and networking platform for young professional leaders to discuss, debate and challenge conventional interpretations of the existing complex realities confronting communities and leaders. The program provides a unique opportunity for them to confer with high-ranking figures from the political, business and academic communities from around the globe, and especially from Asia.

Though the emphasis is on Asia, there will be a fair mix of young leaders from Europe, Americas, Africa, Asia and Australia. The participants will be drawn from diverse sectors and streams of study. Each of these participants will, at the outset, be nominated by senior figures – Heads of Governments, Ministries and Government Departments, the CEO’s of major National and Multinational Companies, Heads of Universities and of Non-Profit Organizations – and thereafter carefully selected by an eminent jury of experts.

The participants will be between 28 and 35 years of age. They would have acquired significant professional experience and would already exhibit promise at work.

For more information please visit the official website

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BRICS, In the News, Politics / Globalisation

Samir speaks at the China-South Asia Dialogues on ‘Shaping India’s Foreign Policy: Domestic Drivers in Policy and Practice’

March 23, 2011
Bejing, China
Link to original website

India is often described as an emerging economy, yet rarely are adequate linkages made between the domestic and foreign drivers of its growth. In the fifth installment of its “China-South Asia Dialogues” series, the Carnegie-Tsinghua Center for Global Policy invited Samir Saran, vice president and senior fellow at the Observer Research Foundation (ORF) in New Delhi, to discuss the domestic forces that shape India’s foreign policy. He was joined by ORF distinguished fellow, Ambassador H.H.S. Viswanathan, who offered a targeted analysis of these policies in practice, discussing India’s engagement of African countries. Carnegie’s Lora Saalman moderated.

India’s Economic Transformation

After twenty years of economic reform, nearly half of India’s Gross Domestic Product is linked to the global economy. Yet, while India is an important and sizeable market, it is still not a large economy in terms of per-capita income and the depth and range of its economic activity, Saran said. With the bottom 80 percent of the population contributing over 60 percent of Indian consumption, India remains sensitive to the rise and fall of prices for both goods and infrastructure. Saran suggested that India’s designation as an “emerged economy” needs to be re-assessed.

    • Wealth Disparity: Saran spoke of the vast wealth disparity in India between the extremely wealthy—including approximately 600 millionaires and billionaires—and the 800 million people who subsist on less than $2 per day. India possesses nearly half of the world’s poor, which strains its ability to deal with issues such as healthcare, education, energy, and water supplies.
    • Population Bulge: With the growing number of teenagers set to enter the domestic job market, India also faces some daunting challenges in creating adequate employment. One of the Chinese participants asked whether India’s youthful population was a source of instability for the country. Saran agreed that the country’s large young population exacerbates some of the threats that India already faces, such as left wing religious and political extremism, Islamic radicalism and an unstable neighborhood that at times leaks its impulses and intentions across its border.
  • IT Not a Panacea: Saran argued that while India is known for its booming information technology industry, this sector has only been able to provide 15 million jobs in the past decade-and-a-half, in a country with a population exceeding 1.1 billion. He estimated that India will need to add 10-15 million new jobs each year to fully employ to its youth. Saalman asked whether in the wake of China’s shift from a labor-intensive to a capital-intensive economic base, India might be able to absorb some of China’s manufacturing jobs. Saran doubted that this would occur on a large scale given the inability of India to devote the tracts of land necessary for major industry to thrive.

India and the Global Community

    • Diaspora and Outsourced Governance: One Chinese participant asked about the role of the Indian Diaspora in meeting India’s development goals. Saran noted that, with the exception of the United States and parts of the European Union, much of India’s Diaspora in other parts of the world remains at the lower rungs of the local society, such as those working in the Middle East. This group often exerts an indirect rather than direct political influence.
  • The China Dream: Saran explained that Chinese corporations are now entering Indian economic sectors like power, telecom, and infrastructure, sometimes replacing Western countries in key projects. They have even started offering commercial loans and finance. While India does not want to be overly dependent on China, the price sensitivity of the Indian market and the reality of the global economy may compel greater Sino-Indian cooperation. Yet, China offers India a more realistic goal than the “American Dream,” Saran contended. While India will have to stand up to a more demanding China in a geo-political context, he argued a segment of Indian industry already views China as an economic opportunity.

India’s Transformation in Practice in Africa

The international perception of Africa is changing, with the traditional view of its colonial past and lack of strong institutions giving way to economic revitalization, impressive growth rates, increased consumption levels, and expanded resource extraction and exports. The political resurgence in Africa has made African leaders more responsive to good governance, argued Viswanathan. As part of this process, India and China are engaging the newly resurgent Africa and creating new paradigms.

    • Beijing and Delhi Consensus:  India, much like China, has taken a much more business-oriented and less politically driven approach to Africa, Viswanathan said. Both countries anticipate a shift in global institutions, where the traditional Western dominated power structure will be faced with alternatives from the developing world.
    • China and India Into Africa: Viswanathan spoke of the need for India to make greater investments in agriculture, infrastructure, health, and human resource development, alongside cooperative measures in combating terrorism, drug smuggling, and human trafficking within Africa. Noting the Western media’s strong focus on China’s role in Africa and India’s lengthy history on the continent, Saalman asked for a comparison of the role the two countries can play in the continent’s economic renaissance. Viswanathan answered that while China has had a varied level of engagement with Africa since the 1950s, India has maintained a consistent presence and strong level of integration in Africa. Many Indians immigrated to Africa and often hold citizenship in African nations, placing India in an advantageous position to boost Africa’s growth from within the continent.
    • Dispelling the Colonial Mindset: China and India are not out to dominate or control Africa, asserted Viswanathan. While both countries are engaged in the extraction of resources from Africa, they have also made strides toward helping Africa develop its infrastructure and human resources. For example, India has also brought some of its telecommunication savvy to bear in Africa, through business ventures to provide lower cost connectivity to Africa.
  • Between Hard and Soft Power: Viswanathan emphasized that much of India’s military aid has been non-lethal, such as providing uniforms and supplies. There had been some small arms trade with some countries but the greater concentration has been on defense training and the sharing of military personnel. Ultimately, Viswanathan argued that for both India and China, the soft power element of having their citizens on the ground and establishing cultural institutions like the Confucius Institutes has been more effective at penetrating Africa than hard power mechanisms.
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BRICS

Summary of BRICS Think Tanks Symposium, March 2011

March 2011
Link to original website

Scholars and experts from BRICS (Brazil, Russia, India, China and South Africa) countries have said that the current crisis in the Middle East and North Africa (MENA) regions should be resolved expeditiously in the interest of regional stability and in conformity with the aspirations of the peoples of MENA and said that the current crisis demonstrated that the global governance system needed to be more responsive.

This formed part of a recommendation document prepared for the Third Leaders Summit to be held at Sanya, China in April this year. At a meeting of 60 scholars of think tanks from the five BRICS countries, held in Beijing on March 24 and 25, 2011. A seven-member delegation of Indian experts, led by Observer Research Foundation, took part in the meeting of the BRICS Think Tank Symposium, hosted by the China Centre for Contemporary World Studies (CCCWS) and the China Foundation for Peace and Development (CFPD). It comprised of former Indian ambassadors Mr. HHS Viswanathan (Distinguished Fellow, ORF) and Mr. T.C.A. Rangachary, Mr. Samir Saran, Vice President and Senior Fellow, ORF, Dr. Ravni Thakur Banan, Associate Professor, Delhi University, Dr. Saroj Kumar Mohanty, Professor and Senior Fellow, Research and Information Systems for Developing Countries, Dr. Jyotirmoy Bhattacharya, Fellow, Indian council for Research on International Economic Relations and Sriparna Pathak, Junior Fellow, ORF.

In the recommendations proposed for the consideration of the Third BRICS Leaders Meeting to be held in April in China, the scholars said that the leaders should give attention to the changing international context, sluggish economic recovery, governance issues, reform of the international economic and financial architecture, Sustainable Development and Climate Change.

In the opening speech, Mr. Sun Jiazheng, Vice Chairman of the National Committee of the Chinese People’s Political Consultative Conference and President of CFPD, made three suggestions regarding cooperation among BRICS: (1) Undertaking intensive studies, and recommendations on issues that concern BRICS. (2) Focusing on major areas of international finance, international order, world peace and stability (3) Strengthening exchanges between think tanks of BRICS.

At the opening session, delegates from the five countries spoke on the need for reforming the global financial institutions, democratising global governance system, avoiding unilateralism, increasing discussions within the grouping on issues of wages, poverty, energy, health and education, defining a BRICS identity and mission and widening the BRICS’ agenda.

The first session discussed “Challenges and Opportunities- Environment and Background for the Development of BRICS Countries”. The presentations focused on the opportunities and challenges for BRICS post the financial crisis and the way ahead on issues of development and global governance Delegates from BRICS countries also spoke on issues of technological innovations, moving away from reliance on OECD countries, and greater engagement with other developing countries to enable sustainable growth.

On the topic of ‘Changes and Responsibilities: Agenda and Items for BRICS Countries in Advancing Global Economic Governance’, participants elaborated the need to realise inclusive growth and emphasised on stability, peace, shared prosperity, and development, South- South cooperation, open markets and mutual trade and investment among BRICS.

The theme of the third session was ‘Unity and Cooperation- Practical Cooperation and Institutional Building of BRICS Countries’. This panel discussed how BRICS can be a bridge for North- South cooperation, and the need within the BRICS grouping to resolve differences and seek common goals. Presenters also spoke on strengthening trade among BRICS, strengthening framework for polycentric world, promoting cooperation and engaging private sector actors in agriculture and other sectors among BRICS.

‘Exchanges and Mutual Trust- Cooperation Among Think Tanks of BRICS Countries’ was the final theme of the symposium. The discussions delved into ways to deepen BRICS interactions and the need to convene international seminars on areas of bilateral and multilateral areas interests. There was a strong emphasis on the need to establish a BRICS institutional framework at the governmental and non governmental level and to create working groups on select projects. It was also agreed to create a BRICS Think Tanks website for scholars to contribute to.

The interactions were free and friendly and there were no contentious issues. It was obvious that the delegates were trying to find the relevance, mandate and evolution of the Group.

One high level political interaction was organised for the delegates to meet Mr. Dai Bingguo, a State Councillor, where he praised the work of the delegates in coming up with new ideas. He also cautioned that the leaders may not have the same ideas. He spoke of “broadening” the Organisation, a concept not liked by the Russians.

Some divergences on issues like trade and currencies notwithstanding, there was a general feeling that BRICS is here to stay and contribute to a change in global governance. How this will be achieved is the question to which nobody seemed to have a clear answer. There were references to the need for an alternative model of development in which BRICS countries do not repeat the same mistakes committed by the developed world. There were also statements that BRICS should act as a bridge between the developing and the developed countries. But would the other developing countries (particularly potential aspirants to the Group like Indonesia, Turkey and Mexico) like BRICS to play this role?

One theme that came up constantly was the lack of intra-BRICS cooperation in comparison to the potential that exists. For example, BRICS contributes to about 20% of global GDP. Further, 60% of the global Foreign Exchange Reserves today are held by BRICS. But these are parked mainly in Western countries when BRICS themselves desperately need capital for development.

Apart from some general references to the need for reforms of global financial institutions and replacement of dollar by SDR as the global currency, no in-depth discussions took place on these issues. However, the increase in the voting shares of China, Brazil and India was referred to as a beginning of a change in the mind-set of the developed world. One theme that was very evident was the need to coordinate BRICS positions in G-20 so as to have a greater voice.

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BRICS, In the News

China.org.cn reports on BRICS Think Tank meeting, 2011

April 15, 2011
Xinhua, China
Link to original website

Representatives from think tanks of the BRIC countries (Brazil, Russia, India and China) discussed ways to fight climate change at a seminar here Wednesday. The seminar, called BRIC Think-Tank Summit, gathered members of think tanks from the BRIC countries to examine the global economic situation and the role of BRIC countries in the post-crisis global transformation.

World countries need to take joint action to fight climate change, said Indian representative Samir Saran from the Observer Research Foundation. Chinese representative Wu Enyuan, with the Institute of Russian, Eastern European and Central Asian Studies, Chinese Academy of Social Sciences, said the developed countries had a bigger responsibility on carbon emission reduction as the current climate change is a result of some 150 years of industrialization process of the developed nations.

But he said the developing countries, including the BRIC nations, should take their fair share of responsibility as well, and adopt measures to fight global warming. “China has fulfilled its responsibility by taking practical actions in either energy conservation or environmental protection,” he said, adding that other BRIC countries have also committed themselves to carbon emission reduction.

Brazil’s representative Eduardo Viola said that implementing these measures is more important than holding discussions. Russian representative Nikolai Mikhailov said climate change unveiled the notion that human beings can treat nature as they want without caring about the consequences. Only a radical change in their attitude could make a difference, he said.

The two-day seminar was held on the eve of the second BRIC summit scheduled for Friday in the Brazilian capital.

 

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BRICS, In the News

Chinese Crienglish.com reports on BRICS Think Tank meeting, 2011

March 26, 2o11
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BRICS think-tanks call for closer economic ties

Think-tanks from five major developing economies are now calling for closer economic ties among the BRICS countries, just ahead of the group’s summit in Hainan, China next month. BRICS countries include China, Brazil, India, Russia and South Africa.
International relations expert Jin Canrong from China’s Renming University says, despite booming economies, the five countries still do not have enough say in global economic dialogues.

“The top agenda of the next summit is still the economy, and especially the top ten topics talked about at this year’s G20 summit in France. For instance, the fluctuating raw material prices, and the possibility of giving an index for economic imbalance – those are all important.” Samir Saran, senior researcher with India’s Observer Foundation, says the BRICS countries could find more shared interests economy-wise. “For the BRICS countries, there is still enough room to enhance their cooperation in energy, electricity, food security, agriculture and technology. Also, the five countries could learn from each other regarding eliminating poverty, improving healthcare and education.”

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In the News, Water / Climate

Samir attends the SANSAC Climate and Security Roundtable, 2010

August 6, 2010, New Delhi
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Summary of discussion
Chair: Fergus Auld, UK Cross-Government Climate Change and Energy Unit, India

International Alert convened a roundtable meeting, kindly hosted by the British High Commission in New Delhi, with the generous support of the EU, to generate a critical discussion on the inter-linkages between climate change and conflict in South Asia and to identify the institutional and governance level knowledge and capacity gaps to promote effective responses to these risks.

The meeting was an opportunity to take forward discussion in India on the relationship between climate change, resilience and security. Bringing together institutional representatives and civil society experts, the discussion addressed the complexities of responding to climate change in conflict-affected contexts in South Asia and the institutional responses to dealing with such risks. In particular, the group explored:

  1. Where human (and indeed state) security should fit into the climate change policy discussion?
  2. What the link between climate change and violent conflict means for development policy?
  3. The specific issues to be addressed in fragile communities.
  4. The best ways to move the debate with not only the necessary sense of urgency but also awareness of the depth and breadth of the issues and the appropriate policy responses. 

Background:
As more people become aware of and motivated by the links between climate change, conflict, peace and security, both the possibility of and the necessity for clarity about these links increases. Regardless of the scarcity of data, the climate change and security dialogue is moving ahead and shaping thinking and policy as it goes. Alongside this is concern from some quarters about the so-called ‘securitisation’ of climate change. A pragmatic response to this means ensuring the climate change and security dialogue is as informed as it can be by appropriate actors keying into the dialogue to embed sustainable development and peacebuilding priorities into the core of the debate.

Key issues discussed:

  • What is the value of the climate change and security discourse? Is it a distraction from adaptation and mitigation priorities?There are three particular risks in the climate change and security nexus:

i)         Just as security fears can mobilise people and change, sensationalist scenarios demobilise, especially when they turn out not to justified by the evidence.

ii)       Treating conflict and security issues as if they will produce direct threats from one country against another, or even one group against another, which is the language of military security will distort the debate and the policy response; at worst, the response will be inappropriate and wasteful.

iii)      Basing the argument on an over-simplified linkage could generate policies that miss their targets in other ways and simply lead to confusion and uncertainty about what the problem is and why anyone should care.

Yet the discourse exists and will continue to move in some cases with more policy leverage than the adaptation or ‘common but differential responsibility’ for mitigation discourse. As such, the three risks above notwithstanding, engaging in the security discourse is a vehicle for getting critical development and governance concerns to the policy table.

  • What is the nature of the causal link between climate change and security?

Policy cannot and should not be based on a straightforward cause-and-effect relationship between climate change and violent conflict or political instability. There is a lack of research findings on the topic and what there is does not offer robust conclusions. And there are good reasons for this: namely that causality is always complex. Armed conflicts not only have several different causes but several different types of causes. These are often conflated, blurring the differences between background or root causes, the immediate trigger, the role of the external actors etc. The fact is that simple cause-and-effect is rarely if ever enough to explain the origins of a conflict.

Given this lack of clear causal link, the sparse research literature on climate change and security contains some that declares that no link can be proven. But the fact that no link can be proven is not the same as saying none exists. A real limitation of studies so far is that they work by reflection on the past – whereas the key point to understand about climate change is that the future will be different from the past.

Perhaps the largest security risk of climate change is the most preventable one. That is the risk that climate change policy itself will be the most destabilising factor in fragile communities. The reasons are three-fold:

i)         New financing mechanism on climate change strive towards ‘national ownership’, but where the state government is an actor in the conflict and is party to structural exclusion and marginalisation, this essentially provides an additional ‘point resource’ for elite capture and for the perpetuation of existing systems of exclusion and inequity.

ii)       Lack of adequate consideration of the knock-on consequences on interventions to address climate change can have inadvertent negative consequences which could stoke instability. The rapid switch from food to fuel crops in the ill-informed bio-fuels experiment which lead to global riots in 2008 is a case in point. There are many more trip wires of unintended consequences in the path low carbon development which need to be understood from a conflict sensitivity perspective, particularly around REDD and hydro.

iii)      Any action involves a trade-off and creates new winners and losers. A shift in priority to narrow and technical adaptation or mitigation responses will entail others issues – perhaps basic services such as health or education – being pushed down the agenda. In already fragile communities where governance is weak and basic service delivery is poor, such a shift could rupture an already weak social contract between citizens and the state.

  • How to address the lack of empirical evidence?

The evidence base for climate and security interlinkages is necessarily weak; there has been too little time since the effects of climate change began to receive adequate attention for research data to have accumulated of the kind needed for large-scale quantitative studies that can reliably depict trends. Further, the state of knowledge in the natural sciences does not let us attribute specific events such as flood or drought to climate change, nor does it offer any policy relevant predictions of impacts at the regional level. As such, there is a case for turning instead to case studies. While limited in their generalisability, developing a broad geographic spread of case study evidence which drill deep down to understand community level perhaps offers the best solution to the knowledge gap in the interim.

Conclusions:
There was strong consensus that the solution to the risk of climate change policy itself becoming a security threat is linking dialogues. This entails much more local level research into climate change and security links and risk transmission pathways (such as rural-urban migration, food insecurity, service delivery failure), addressing governance capacity constraints to ‘joined-up’ programming, and advocacy to move the debate beyond concerns that the security dialogue will hijack the climate change dialogue, and instead to bring the dialogues together.

Next steps:
Interested parties are to remain part of an ongoing dialogue process in India, and also to link into the regional climate change and security dialogue. Specific aims of this dialogue process would be to bring development and human security concerns, lessons and good practice to the heart of the climate change and security debate. Alert is happy to facilitate the dialogue. ORF have offered to host the next meeting. In the meantime, all participants are welcome to share resources through the South Asia Network on Security and Climate Change web-space (www.sansac.org).

 

List of participants:
1.       Ranu Sinha, Operations Analyst, Water Resource Management, World Bank

2.       Samir Saran, Senior Fellow and Vice President, Observer Research Foundation

3.       Rob Donkers, Environment Minister Counsellor, EU delegation India

4.       Mansie Kumar, EU Delegation India

5.       Uttam Sinha, IDSA

6.       Gitanjali Nandan, First Secretary, Australian High Commission

7.       L Vijayanathan, Senior Adviser, Environment, Climate and Energy, Norwegian Embassy

8.       Karolina Hedström, Regional Crisis Response Planner – South Asia, EU India

9.       Deepti Mahajan, Research Associate, Resources and Global Security,Teri

10.   Fergus Auld, First Secretary Climate Change and Energy, DfID India/British High Commission

11.   Clare Shakya, Senior Regional Climate Change and Water Adviser – Asia, DfID India

12.   Janani Vivekananda, Climate Change and Security Adviser, International Alert

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