G Parthasarathy

BRICS: The challenges ahead

G. Parthasarathy | Updated on May 01, 2011

BRICS leaders at the Sanya summit… Despite differences, there was much the partners shared in common.   -  REUTERS

Despite all the talk of a multipolar world order, Brazil, India, Russia and South Africa realise that China seeks a bipolar world that it can dominate with the US. One has to proceed with care while dealing with China's ambitions.

Never before had a new global grouping emerged from the research of a US Investment Banking and Securities Company. But this is what happened when a 2001 Goldman Sachs paper entitled “Building Better Global Economic BRICs” signalled the forthcoming shift of global power away from the G7-led developed world, to the emerging, fast growing economies of Brazil, Russia, India and China. On June 16, 2009, the leaders of the BRIC countries held their first Summit in Yekaterinburg, and issued a declaration calling for the establishment of an equitable, democratic and multipolar world order. As it would have been imprudent to exclude the entire African continent, BRIC became BRICS with the participation of South Africa at the April 14 Sanya Summit.

China's decision to hold the BRICS Summit at Sanya, located on the Southern tip of the Hainan Island, was not accidental. Sanya is located close to the disputed Xisha (Paracel) and Nansha (Spratly) Islands in the South China Sea, which China recently declared as an area of “core interest”, like Tibet and Taiwan. The Hainan submarine base, with five nuclear submarines, is adjacent to Sanya and will be home to China's first aircraft carrier.

Chinese naval power concentrated in Sanya has evoked serious concern in both Asean and India. Hosting the BRICS Summit in Sanya was evidently a not-too-subtle message to the world about China's growing military muscle.


Our worthy leaders and mandarins have few equals in giving a spin to whatever emerges from summit meetings with China or Pakistan. Our scribes, therefore, breathlessly reported after Dr Manmohan Singh met President Hu Jintao, that there had been a “breakthrough”, with China supporting our candidature for Permanent Membership of the Security Council. But alas, all that happened was that the Chinese merely said that they “understand” the “aspiration” of Brazil, India and South Africa to “play a greater role in the UN”.

Much has been made of China's decision to avoid “stapled visas” for journalists from Jammu and Kashmir accompanying the Prime Minister to Sanya. The Chinese “gesture” on stapled visas has been reciprocated by a resumption of military exchanges. But, one would caution against too much optimism on maintaining peace and tranquility along the border merely because we have a new “working mechanism” for this.

The much touted “Joint Terror Mechanism” with Pakistan only resulted in terrorist attacks on our Embassy in Kabul and the 26/11 terrorist strike on Mumbai. One should realistically place greater emphasis in maintaining peace on our borders with China, on the basis of better communications, enhanced and well equipped military deployments and adequate air power. New Delhi has, however, been more realistic recently in responding to Chinese diplomatic provocations by the commencement of Ministerial level visits, together with moves for concluding a Free Trade Agreement with Taiwan and a more proactive approach to ties with Japan, South Korea and Vietnam.


Just before the Sanya Summit, Zhu Xiaochuan, the Governor of China's Central Bank, called for a “super sovereign currency” to replace the dollar. Moreover, the Chinese had earlier played a key role in the so called “Chiang Mai initiative”, fashioned as an alternative to the IMF. The initiative was intended to bail out East Asian economies, facing economic downturn. China has consistently sought alternatives to the Western-dominated Bretton Woods Financial Institutions. With reserves of $3 trillion and its foreign aid of $100 billion exceeding the fund transfers of the World Bank, China obviously intends to flex its economic muscle globally. India, which has legitimate concerns about the lack of market oriented transparency in the valuation of the Chinese Yuan has, however, reiterated its faith in the dollar as the global reserve currency. India would prefer strengthening the IMF by expansion of “Special Drawing Rights”. But, there was agreement in principle in Sanya to establish credit lines in local currencies, which will insulate recipients from exchange rate risks, for joint projects. At the same time, BRICS believe that the current domination of the IMF and World Bank by G7 members should end.

The Sanya Summit did, however, signal that despite differences, there was much the partners shared in common, on issues ranging from climate change and the continuing relevance of safe nuclear energy, to the transfer of financial resources and technology to developing countries. Moreover, despite Russia and Brazil being resource rich countries, there was shared concern about prevalent volatility in prices of energy and food.


The Sanya Summit also sent out a clear message that emerging powers intended to strengthen contacts on security-related issues and would coordinate their positions in forums like the Security Council. National Security Advisers of BRICS are to discuss security issues of common concern in China later this year and their Foreign Ministers are scheduled to meet annually in New York.

While there has been much talk around building a multipolar world order, Russia, Brazil, South Africa and India recognise that China really seeks a bipolar world order, which it jointly dominates with the Americans. Given Chinese global ambitions, one has to proceed with due care on engagement with the “”Middle Kingdom”. BRICS has to be built patiently, brick by brick.

(The author is a former High Commissioner to Pakistan.)

Published on April 28, 2011

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