T

he fifth BRICS summit will be held in Durban,

South Africa, on March 26-27, 2013. Despite the
fact that the BRICS countries Brazil, Russia,
India, China and South Africa account for 25 per
cent of global gross domestic product (GDP) and 17
per cent of global trade, the grouping has little to
show by way of any substantive achievement so far.
Its focus has been on consultative engagement on
issues of shared concern, but these have not led to
collaborative initiatives.
The one significant proposal that could grab
international attention is the establishment of a
BRICS development bank. This could break the
monopoly of Western-dominated international
financial institutions as a source of development
finance. This proposal was initially advanced by
India and one hopes it is pursued with vigour at the
Durban summit. In order to be credible, the pro-
posed bank must be seeded with adequate capital.
The proposed amount of $50 billion is too modest.
It is also reported that China has been pitching for
a larger share of the equity, hence voting power, in
order to determine the banks lending policies. This
must be resisted. We should not end up creating a
mere clone of the World Bank, where smaller share-
holders are just bystanders.
Since the inception of BRICS, the groupings lead-
ers have been consistent in their calls for the restruc-
turing of the global economic and financial order
and a greater say for emerging economies in global
governance. However, in their national approaches
at the G20, the World Trade Organisation (WTO) and
the United Nations (UN), the groups members often
go their separate ways on issues on which their inter-
ests diverge. This is unlikely to change, given the
considerable asymmetries among the member states
and their differing political status and aspirations. As
permanent members of the UN Security Council,
neither Russia nor China is enthusiastic about the
entry of Brazil, India or South Africa into the inner
sanctum. Both Brazil and India are wary of Chinas
mercantilist trade policies; while in Africa, India and
China are often in competition for the same
resources. Nevertheless, given the economic weight
of the grouping, BRICS will remain a useful pressure
group to nudge change in the increasingly outdated
and dysfunctional global economic and financial
architecture. It is also a convenient platform for
some anti-West flag-waving on issues related to Iran
and Syria.
The summit will see the debut of Chinas new
leader, Xi Jinping. Russias Vladimir Putin, too, is
attending the event for the first time. It is possible
that these two leaders may introduce a new dynam-
ic into the grouping. We should know soon enough.
Global trade arrangements are experiencing far-
reaching developments that could significantly
impact the economic prospects of the BRICS coun-
tries. These changes could provide the trigger for
their closer co-operation. A transatlantic free trade
zone with the US and the European Union is already
under negotiation; if successful, this would create an
economic zone encompassing virtually half the
worlds GDP and trade flows. On the other side of the
world, the trans-Pacific partnership is steadily mak-
ing headway (Japan is virtually certain to join), cre-
ating another parallel and powerful trading bloc.
None of the BRICS nations finds place in these
emerging giant trade conglomerations. The US has
championed both projects with Chinas relentless
economic ascendance in mind, but other BRICS
members will suffer heavy collateral damage as a
result of their exclusion. The new groupings will set
norms and standards for economic exchange with
little or no input from emerging countries. They
will inevitably evolve into non-tariff barriers. The
serious implications of these developments should
drive the BRICS nations to consider effective coping
strategies. Reviving the multilateral WTO process
could be one such collective response.
It should have been expected that a summit
being held in Durban must have development co-
operation with Africa as its theme. This is to be
welcomed. The emerging countries are now a sig-
nificant source of development finance for sister
developing countries, even as the traditional aid
donors in the Organisation for Economic Co-oper-
ation and Development (OECD) have drastically
scaled back aid flows both bilaterally and through
multilateral financial institutions. The emerging
countries follow different norms in providing funds
for development, the most important being the
treatment of the recipient as a partner. There is a a
conscious rejection of the prescriptive donor-recip-
ient approach of the OECD, including the imposi-
tion of political conditionalities. Indias own devel-
opment co-operation with Africa has focused on
capacity building and community development
projects, and it is generally aligned with the African
partners priorities.
The BRICS summit could be a good platform for
establishing a new set of recipient-friendly norms in
the domain of international development co-oper-
ation. Since India and China are already major eco-
nomic partners of Africa, and the other members of
the group, too, have substantial presence in differ-
ent parts of the continent, a co-ordinated approach
to promoting Africas development and the setting
of certain shared norms and benchmarks would be
of considerable significance in the ongoing devel-
opment discourse, particularly in the context of the
post-2015 Millenium Development Goals (MDGs)
and the proposed Sustainable Development Goals
(SDGs) arising out of the Rio+20 conference of 2012.
The establishment of the BRICS development bank
would fit in neatly with such an initiative.
India could take the lead by proposing a BRICS
Africa development compact, which would be a sub-
stantive contribution to Africas development and a
political statement that would erase the premature
obituaries that keep appearing whenever the BRICS
leaders meet.
The writer, a former foreign secretary, is chairman, NSAB
and RIS, and senior fellow at CPR, New Delhi
ILLUSTRATION BY BINAY SINHA
BRICS and premature
obituaries
The Durban summit should lay out a new set of recipient-friendly
norms for international development co-operation, says Shyam Saran