BRICS builds new world order
IN 2017, BRICS was on the threshold of a precipitous meltdown. For 73 days, the Chinese and Indian army were engaged in an eyeball-to-eyeball confrontation at a strategically important feature in the Himalayan state of Bhutan which threatened to turn very ugly.
The five-member BRICS and its summit in Xiamen, China, seemed doomed until wiser counsel prevailed on the leadership of both countries, rescuing not just the event, but peace in the region.
A year later, it’s a transformed reality and narrative. After resetting its ties in an informal summit at Wuhan with Chinese President Xi Jinping, Indian Prime Minister Narendra Modi is trying to restore the balance in his country’s foreign policy, which earlier seemed tilted in favour of the US.
So pronounced were Indian leanings towards Washington that it was causing some anxiety in the minds of other members like Russia, China and South Africa as to whether India was really keen on BRICS.
This correction is a departure from an earlier view held in the foreign policy establishment that believed China was using these multilateral bodies like BRICS and the Shanghai Co-operation Organisation to enlarge its influence in different geographic areas, and India did not want it to happen at its expense – hence this diffidence.
Though there is absence of clarity about what compelled this rethink, it has coincided with the change of guard in the foreign office with a new person at the helm.
This has been followed by greater appreciation among decision makers that the confrontation with China has not yielded the necessary dividends.
India, which refused to join China’s Belt and Road initiative (BRI) connectivity project on the principled issue that it could hurt the sovereignty of participating nations, found to its chagrin that even those countries that were considered its regional allies did not pay heed to its caution.
Nepal, Sri Lanka and Bangladesh happily took hefty loans from China at a high rate of interest for their projects, even if there were some concerns about losing their sovereignty, as visible in the case of Sri Lanka. Similarly, Pakistan, which is the recipient of a large loan from China for being part of the China Pakistan Economic Corridor, though, is in a conundrum about how to manage its economy without giving away its control over decision making, but cannot unhinge itself from this arrangement as its trust in the US has evaporated in recent times.
India’s recalibration of its foreign policy, perhaps, has stemmed from similar reasons that include the protectionist policies of the US, plus lack of predictability in the case of US President Donald Trump. Some of the Trump administration’s moves threaten Indian engagement with Iran, against whom sanctions have been imposed by Washington and Russia.
The Indian government is at its wits’ end as to how it would deal with a situation where the US imposes the provisions of a recently enacted law that punishes those doing business with Russia.
India is a traditional buyer of Russian weapons and has committed to purchase its highly rated anti-missile system, the S-400.
US officials have made it amply clear that it would impose sanctions on India if it goes in for an anti-missile system that can also bring down stealth F35 fighter jets.
This resolve of the US administration is driving India towards Russia and China.
Both Russian President Vladimir Putin and Indian Prime Minister Narendra Modi emerged beaming after a two-day summit in Sochi. Sources in the Russian government said this was an extraordinarily successful meeting where India reiterated its commitment to buy S-400s plus an increased supply of oil and liquefied natural gas
These recent trips to China and Russia were weighing on Prime Minister Modi when he stepped out to deliver his speech at the annual Shangri La dialogue in Singapore earlier in June.
Modi’s speech, many observers believe, was an attempt to realign India’s foreign policy and bring it closer to the values of nonalignment. He made it clear that India would not be part of any bloc against China, though he emphasised the freedom of navigation and insisted on a rule-based global order.
He seemed to revel in the US administration’s redefinition of its pacific command to the Indo-Pacific, claiming that this stretched from “Africa to the Americas”. India may not have the resources or reach to leverage new definition without the heft of the US, but it surely makes New Delhi worried about its implications.
At the Shangri La Dialogue, he was at pains to reiterate that India did not want a confrontation with China.
India is seeking investments from China for its decrepit infrastructure, and to the chagrin of Japan, which is funding its first bullet train, it wants Beijing to invest in other high speed train projects.
For these reasons and more, the BRICS summit will gain new relevance. Indian Prime Minister Narendra Modi will get a chance to know South African President Cyril Ramaphosa better.
In the Commonwealth summit, Modi, while meeting many of the members from Africa, gave ample suggestions that New Delhi would be keen to work in spaces where China does not have expertise like IT and the services sector.
The Indian Foreign Ministry believes Ramaphosa will bring greater balance to the country’s foreign policy following former president Jacob Zuma’s removal.
Zuma was perceived to be antiWest and pro-Beijing.
US protectionist policies provide an opportunity for BRICS countries to sit together in Joburg and craft a strategy that will not only assist each other, but other countries of the developing world.
These five countries, representing 40% of the world’s population, can rebuild a new world order that is just and equitable, capable of standing up to all the bullying that is emanating from Washington.
The New Development Bank (NDB), which came into existence within such a short period of BRICS’ existence, is evidence of what these five countries can really achieve.
The NDB is funding projects, not just in participating countries, but elsewhere too. Another gamechanger would be the creation of a ratings agency which would redefine the paradigms for assessing the economic fundamentals of a country and ensure that it doesn’t sink due to the obstruction of credit.
In 2008, countries came to grief due to the opaque assessment by Western ratings agencies of their economies. A BRICS agency could change the way credit flows to struggling economies.
From this standpoint and more, the Joburg BRICS summit could cement the new realignment.