BRICS: INDIA's COSTLY TIMEPASS
RAJIV KUMAR
The fifth BRICS summit concluded in
Durban, South Africa on Wednesday the 26th when most Indians were celebrating
Holi, more mindful of water shortages in Mumbai than the creation of the BRICS
Bank! The news about the bilateral meeting between our prime minister and the
newly installed Chinese president Mr Xi
Jinping grabbed more space and attention than the formation of the BRICS
bank or the creation of CRA (Contingent Reserve Arrangement) with a corpus of
$100 billion to assist members that face adverse market pressures against their
currencies. I support the stand of the large majority of Indians to virtually
ignore the BRICS process because BRICS is germane neither to India's
over-riding domestic concerns nor indeed to its foreign policy objectives.
Prime Minister Manmohan Singh
valiantly tried but in vain to infuse some purpose by enunciating a five point
charter for collaborative effort. Quite expectedly, it was pitched at a high
level of generality that made it rather inane. On the other hand, the existential
problem faced by BRICS was spelled out by Vladimir Putin. With his tongue
firmly in cheek, the Russian President likened the five to a grouping of
Africa's big game trophy animals- the lion, leopard, elephant, buffalo
and rhinoceros. All five strong in
themselves, unable to accept another as leader and most importantly so widely
diverse in their features that any coming together seems highly improbable. One
wonders why then we have had five summits already?
In our book titled 'In the
National Interest, A Strategic Foreign Policy for India', my co-author
Santosh Kumar and I have argued for focusing our foreign policy on achieving
and sustaining high rates of economic growth and generating more job
opportunities. Having followed the BRICS (BRIC until 2011 when South Africa, a
late entrant joined the grouping) process since its inception and having been
present both at Sanya (2011) and Delhi
(2012), I am not at all convinced that the BRICS process serves in any way this
principal policy goal. What is the additionality or value added achieved in
meeting together the heads of four countries over and above that accrue from
timely and well prepared bilateral summits? Can the CRA actually come to our
rescue if the Rupee comes under pressure as our current account deficit
continues to widen and the credit rating agencies (god forbid) downgrade our
standing to non-investment status? Would the highest policy attention of the
PMO not be better and more effectively focused on ensuring that our exporters
become more competitive and the foreign trade policy does not remain an annual
ritual but instead gets a strategic focus that is backed by coordinated
inter-ministerial action to provide better infrastructure and more conducive
labour market conditions for Indian exporters to raise their dismal share in
global export markets? I will be very surprised to hear any one argue that the
BRICS process helps India to pursue its goal of rapid of inclusive growth,
which should be our exclusive policy concern for the time being.
It can be argued that it is unfair to
evaluate the contribution of the BRICS process to our country's economic
growth, critical as it may be. However, we must remember that India's
aspirations of becoming a global power or a player are directly and strongly
dependent on its economic performance.
One has to ask how the BRICS process
serves the interests of India's external policy in an admittedly multi-polar
global community. The BRICS is seen by the rest of the world as an
opportunistic assembly of five countries that have very few if anything in
common between them. Other emerging economies question its legitimacy and argue
for others like Indonesia, Turkey and Mexico being included and there is no
valid argument against this except the existence of a clever acronym create by
an American banker! Until recently a
strong common feature among the BRICS was their rapidly growing economies. With
the collapse of the growth momentum in Brazil, India and South Africa, this is
no more the case. Any assumption of BRICS continuing to account for an
increasing share global growth is fraught with all kinds of downside risks.
This becomes painfully true if one was to consider the BRICS economic
performance excluding China. With such huge variations in their resource
endowments, their current priorities, the dissimilarity of their macro-economic
conditions and much more so of their political dispensations, it will be
miraculous if BRICS could sustain global interest in the summit process.
The real gainer from BRICS is clearly
China. Prior to Sanya, the process was a desultory affair with hardly any
serious attention given to it by the geo-strategic community. How many of us
remember the town in which it was organized in Russia? (BTW the town was
Yekaterinburg!) . As an emerged global power, China needs as many forums as it
can have to display its rising prowess and show-off, specially to the Americans
in the hope of converting its significant and growing economic clout into
global political and strategic clout. I
will be grateful to anyone who can explain how our participation in such
multilateral forums serves the interest of either building a stronger bilateral
relationship with China or to attract the attention of other emerging and
developing economies to our own accomplishments in building a market based
economy with a vibrant democracy combined with breath taking diversity.
The five countries have been unable
to take even one meaningful tangible economic initiative since their inception.
The much hyped BRICS Bank has expectedly emerged with a whimper as have so many
previous such attempts at creating alternatives to the Bretton Woods twins.
Extending the Putin analogy, the Indian elephant would do well to keep its eyes
firmly on the ongoing dance of the eagle and the dragon and working to distance
the two from each other.
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Author is Senior Fellow Centre for
Policy Research and former Director of ICRIER.
