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Top emerging economies, coming under the banner of BRICS, on Thursday criticized the West for financial mismanagement, called for a "merit-based" selection of the next World Bank chief, rued the slow pace of reforms in the International Monetary Fund, declared that dialogue was the only way to a peaceful resolution in Syria and Iran, but failed to go beyond motherhood statements and give the bloc a meaningful push.
The BRICS (Brazil, Russia, India, China and South Africa) countries took baby steps towards facilitating intra-BRICS trade and investment in local currency, but failed to reach any agreement on a BRICS development bank. They signed an agreement to extend credits in local currencies under the BRICS Interbank Cooperation Mechanism.
However, the suggestion for a BRICS Development Bank was pushed to a later date, since there were major differences among the members.
Spreading themselves beyond economics, the BRICS members articulated an alternative political vision with regard to current international issues.
"The views were more non-West, than anti-West", explained an official. While these were mainly broad-brush positions on current events, their importance lay in the fact that five emerging global leaders actually sat across the table to agree on these points.
In a statement at the end of the plenary session, Prime Minister Manmohan Singh said, "The world is passing through uncertain times. The rapid recovery of the BRICS economies from the financial crisis highlighted their role as growth drivers of the global economy. Our cooperation is intended to explore meaningful partnerships for common development, address global challenges together and contribute to furthering world peace, stability and security."
In its Delhi Declaration, BRICS members opposed violence as a way of resolving political crises in other countries. "Global interests would best be served by dealing with the crisis through peaceful means that encourage broad national dialogues..." On Syria, BRICS supported the Arab League and special envoy Kofi Annan's peace plan.
On Iran, they observed, "We recognize Iran's right to peaceful uses of nuclear energy consistent with its international obligations, and support resolution of the issues involved through political and diplomatic means and dialogue between the parties concerned, including between the IAEA and Iran and in accordance with the provisions of the relevant UN Security Council Resolutions."
The BRICS nations put their might behind Afghanistan, saying it needed "time, development assistance and cooperation, preferential access to world markets, foreign investment and a clear end-state strategy." Israel was rapped on the knuckles for its settlement policy, but BRICS advocated direct negotiations with the Palestinians. The underlying theme was a repudiation of the western developed countries' approach, without actually getting into the details.
In an action plan, BRICS leaders agreed to meet before United Nations General Assembly meeting every September, much like the Non-Aligned Movement and the South Asian Association for Regional Cooperation meetings; regular gatherings of finance ministers, central bank governors, trade ministers, national security advisers, etc.
But underneath the camaraderie and the determination to strike a different path, serious differences exist. On the economic front, it would be a tussle between India and China, while Russia is pushing the political agenda, particularly on Iran and Syria, where BRICS supported the Russian viewpoint. India and Brazil pushed through their joint pitch for reform of the UN Security Council, which China has not been enthusiastic about, although Russia supports it.
While the BRICS joint statement blamed the Eurozone crisis for the state of the global economy, Indian officials saw this as a way of deflecting criticism of China manipulating its own currency, which also leads to a lot of distortions.
The BRICS development bank too has been kicked down the road, because India still has many reservations. The PM, in fact, preferred to focus on improving the World Bank rather than creating a new institution, as China does.
"We must address the important issue of expanding the capital base of the World Bank and other multinational development banks to enable these institutions to perform their appropriate role in financing infrastructure development," the declaration read.
Indian finance officials see the BRICS Bank idea primarily as a way of legitimizing the use of Chinese currency overseas. Second, they feel that any BRICS bank would essentially be a Chinese bank, because none of the other countries have the financial depth to fuel such an institution. India wants the global financial architecture to change, but at a much slower pace. South Africa supports the Bank, but Brazil cannot, because it already funds the Latin American development bank.
On the election of the next chief of the World Bank, the five countries did not even attempt to find a consensus candidate that could have been an alternative to the Korean-American chosen by the US.
The G20 received a unanimous thumbs-up as a forum for global financial governance and agreed to coordinate positions at the body. Russian president Medvedev said, "We confirmed all agreements on our cooperation in updating the international currency and financial system. One of the goals here is to renovate the IMF. We analyzed the situation in the world economics and came to an agreement on a further coordination of actions within our organization, including preparation for the next G20 summit."
South African president Jacob Zuma made a spirited call for including the development concerns of sub-Saharan Africa in the BRICS development plans. "We feel that Africa is being treated with respect. There is no feeling that people are looking down on our continent."
--- This article first appeared in the Times of India
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