Brick by brick: the trajectory of BRICS

The air of anticipation hovering over the fifteenth summit of Brazil, Russia, India, China and South Africa (BRICS) was palpable. First was the expectation about increasing the fold of membership that consisted of only five. The second was about a common currency, much like the euro used by the members of European Union (EU) that has become the second most important international currency of reserve.

Before the fifteenth summit of BRICS, forty countries (including Bangladesh) had expressed desire to become members of the organisation Out of these 23 countries reportedly had applied formally. The instinctive desire to become a member of any global or regional organisation has been elevated in this case by the need to have collective protection from the vicissitudes of global economic turmoil that have buffeted emerging countries in recent years. Then, there is the satisfaction of belonging to an elite club. With economic stalwarts like China, India and Russia as some of the founding members, the attractions for other countries to become members was a foregone conclusion. Finally, the setting up of the New Development Bank (NDA) under the aegis of BRICS made its attraction irresistible. So, there has been little surprise that emerging countries made a beeline for membership of the organisation.

Before the summit opened on August 23, there was news in media that though China and Russia were keen to expand membership, India and Brazil had reservations. South Africa, as the host of the summit, made no bones about taking in more African countries within the fold of the organisation and selected 'BRICS and Africa' as the theme of the meeting to press home its inclination. While the desire of other countries to join the presently prestigious and potentially powerful body is obvious, the desire of founding members are not so clear-cut. China and Russia, embroiled in geo- political contest with America and its allies, are keen to bolster the political weight of BRICS as a counterweight to their adversaries' clout. India, ever wary of China's influence in the functioning of the organisation, is cautious about new members lest it is outnumbered in decision-making where conflict of interests with China may arise.

In the summit that ended on August 25, membership was discussed behind closed doors and the final communiqué issued announced the acceptance of membership of six new countries. They included petro-dollar countries like Saudi Arabia and UAE and economic weakling like Ethiopia. The inclusion of Iran must have been at the behest of China and Russia, intent on flaunting the red rag before the bull of their adversaries. Apart from speculation, there was no transparency about membership. This does not augur well for the moral authority of BRICS, an intangible asset that can make its writ more effective as has been the case in respect of EU. If membership is expanded on discretionary basis, BRICS is destined to end up with members whose eligibility is suspect. It will then look more like a political organisation than an economic one. The need is for an organisation to restore the balance in the current asymmetrical global dispensation and not for one that is blatantly confrontational. For this BRICS need to expand rapidly, instead of brick by brick, with members that qualify. The decision of the summit, having failed to establish a transparent criteria and taking in members arbitrarily, has been disappointing to say the least.

On the substantive side, the summit almost drew a blank, with nothing said about a common currency to counter the dominance of dollar. It is a tricky issue that cannot be addressed with knee- jerk reaction but should have been discussed formally as an explicit declaration of intent. A task force could have been set up to discuss the modalities of setting up a common currency that can eventually serve as an international reserve. The emerging countries are gasping for breath, financially, because of the rise in the value of dollar, resulting from successive interest rate rises by US Federal Reserve Bank and slapping of sanctions on Russia. Global trade is in turmoil, particularly for countries in Asia, Middle-East and Africa that rely on exports of some vital items, including food, from Russia. International Monetary Fund (IMF) could have devised a system for payments for trade to countries under sanctions, but it has stayed put because of its dominance by America. Feeling helpless, the United Nations (UN) Secretary General attending the summit could only bemoan the fact of the global order being fragmented. He should realise that countries are falling apart because the ' centre' ( World Bank, IMF) cannot hold them together.

Skirting around the issue of a common currency, the BRICS summit merely discussed the financing of trade by member countries with their currencies. But even this attenuated means for using alternative payment system for the member countries has limitation as there is very little intra-country trade among them, except with China. The trade with China is so lopsided that even using national currencies for settlement of payments can only cover a minuscule part.

The agenda for the summit did not have any matter relating to the New Development Bank for discussion, which implies that either it is flying high or is in such a moribund condition that members felt shy of mentioning. It beggars belief that a bank that is supposed to be the alternative to the world bank, should be treated with such indifference by its own promoters. Granted, the New Development Bank is an autonomous body and the summit should not meddle in its affairs, but surely a report from the Bank could have been placed before the summit for information of member countries and to facilitate policy decisions by them. Because of lack of reporting, very little is known of the performance of the Bank and as a result it has failed to raise much hope of becoming a parallel, not to speak of being a rival, to the world bank.

To conclude, the recent summit of BRICS raised some hope about making some breakthroughs on membership, reserve currency and expansion of trade and a greater role for the development bank. At the end its announcements were anything but encouraging in these respects. It will pass as just another run-of-the-mill summit that the world has seen in recent times.

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