B R I C S Brazil, Russia, India, China and South Africa - exerting their economic and political influence Eric LaMont Gregory
The leaders of Brazil, Russia, India, China and South Africa meet in New Delhi
The New Delhi Summit comes at a time when the leaders of Brazil, Russia, India, China and South Africa are seeking a bigger say in running the International Monetary Fund and other multilateral bodies to match their rising collective economic fortunes.
BRICS nations, Brazil, Russia, India, China and South Africa represent nearly half the world’s population.
The economic might of these five countries is evidenced by the fact that they now hold over $4 trillion in foreign currency reserves. And, their increased economic cooperation is clearly going to allow these countries to grow at a continued rapid pace.
Projections by the IMF indicate a 2012 economic growth rate in Brazil of 3%; 3.3% in Russia; 7% in India; 8.2% in China; and 2.5% in South Africa. Whereas, the 17-nation Euro zone will shrink by 0.5%, and US growth this year will be around 1.8%.
Intra-BRICS trading in local currencies will effect the US dollar as well as the Euro's value as reserve currencies, while increasing the role of China’s, Brazil’s, India’s and the Russian currency relative to the US dollar and the Euro.
Trade between the BRICS nations is already substantial, brisk and growing. Brazil, for example, favours France’s Rafale fighter jet as the new aircraft for its military — a deal worth $4 billion. India has already placed an order to buy 126 of the Rafale fighter warplanes. France plays a significant and growing role in military trade and technology transfer matters with Brazil and with India.
The US is not without its influence in these affairs, and any conflict between India and Pakistan would strain India's now rather good relations with Washington. Brazil's overt support for Cuba and Venezuela could at some point create similar problems between the Brazilian government and American administration.
These issues aside it is noteworthy that India and Brazil are in the early stages of negotiating a military accord, since these two countries complement one another in their industrial sectors.
Not only is Brazil in the process of modernizing its fighter jet fleet, but it is also seeking to obtain a transfer of software technology for the nuclear submarine that it is planning to build in partnership with France.
India recently rejoined the nuclear submarine operators’ club when Russian manufacturers handed over to an Indian crew the Nerpa, in Russia’s Far East.
Although major differences remain between its members, nonetheless the BRICS leaders articulated views concerning current international issues which they described as 'more non-West, than anti-West.'
This statement is clearly indicative of a desire on the part of BRICS leaders to exert their own viewpoint and wishes in international affairs. They suggest that the days of being either with or against the West are gone, and that they can and will exert their influence in an emerging multilateral reality world in which they intend collectively to play a significant role.
While their statements lack detail concerning current international tensions the importance of their views lies in the fact that the five emerging nation's leaders sat across a table and agreed on several key points.
Indian Prime Minister Manmohan Singh, for example, stated that, "The world is passing through uncertain times. The rapid recovery of the BRICS economies from the financial crisis highlighted their (BRICS) 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..." In relation to Syria, BRICS supports the Arab League and special envoy Kofi Annan's peace initiatives.
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."
As to Afghanistan, The BRICS statement suggests that Afghanistan needs, "time, development assistance and cooperation, preferential access to world markets, foreign investment and a clear end-state strategy."
The BRICS communique criticized Israel for its settlement policy, but at the same time expressed the need for direct negotiations between Israel and the Palestinians.
The underlying theme of the final communique of the New Delhi Summit was to repudiate the western developed countries' approach to a range of current contentious issues.
The differences that exist between BRICS members, however, cannot be overstated. There is the ongoing conflict on economic policy between India and China.
The Russian Federation has its focus on international politics, especially in regards to Iran and Syria and garnered support at the Summit for the Russian viewpoint.
India and Brazil fought for their shared desire to reform the UN Security Council, which China opposes, although Russia supports it.
These issues only tend to mask the major purpose of the BRICS New Delhi Summit, which was to advance two collectively shared goals. On the one hand, to publicly criticize developed nations' handling of the economy and debt crisis in the United States and Europe, and one of its owns members China for manipulating its currency.
And on the other hand, the main purpose of the Summit was to take another small but definitive step towards legitimizing the use of the Chinese currency overseas. And, although the idea of a BRICS development bank was post-phoned the BRICS leaders acknowledged that such a Bank would essentially be a Chinese bank, because none of the other countries have the financial depth to support such an institution.
While India sees the need for the global financial 'architecture' to change, it wants the pace of that change to be metered. South Africa supports the use of the Chinese currency in global markets, while Brazil must find a way to participate in an expanded Chinese international currency and fund the Latin American development bank at the same time.
All in all, the implications of these developments vis-à-vis the control that the FED and the Central Banks of Europe now exert over the world economy and monetary policy are of epic proportions.