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India and The World

Assessing the achievements of  BRICS and BIMSTEC Summits

India hosted the 8th BRICS (Brazil, Russia, India, China, and South Africa) Summit during its Chairmanship and the BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, comprising Bangladesh, India, Myanmar, Sri Lanka, Thailand, Nepal, and Bhutan) Outreach Summit discussions on October 16, 2016.

The stated theme of India’s BRICS Chairmanship was Building Responsive, Inclusive and Collective Solutions. A five-pronged approach was planned to be achieved during India’s BRICS Chairmanship. This included :

(i)   Institution building to further deepen, sustain and institutionalise BRICS cooperation;

(ii)  Implementation of the decisions from previous Summits;

(iii) Integrating the existing cooperation mechanisms;

(iv) Innovation, i.e., new cooperation mechanisms; and

(v)  Continuity, i.e., continuation of mutually agreed existing BRICS cooperation mechanisms.

In short, the Indian approach towards its BRICS Chairmanship could be captured by ‘IIIIC or I4C’.The focus during India’s BRICS Chairmanship will be on enhanced people-to-people (P2P) contacts of BRICS member states, especially youth. In this context, India has planned activities like U-17 Football Tournament, Youth Summit, Young Diplomats’ Forum, Film Festival etc.

The BRICS and BIMSTEC summits were marred by geo-political developments in the neighbourhood and also submerged into the most global of all elections, i.e., presidential elections in the US. Although India was successful in bringing forth the urgency to fight against terrorism which not only affects peace and stability, but also creates an environment that is not suitable for development.  However, India, in its zeal to highlight terrorism, missed a grand opportunity to set forth a comprehensive agenda for development and more say in global matters by enhancing cooperation among the BRICS and BIMSTEC members.

The assessment of the achievements of the 8th BRICS summit cannot be understood by holding to the views of media selectively. BRICS is the hope of a new rising world order. But in some of the segments of media, there was a distinct trend of highlighting the frictions, divisions and indifference among the BRICS members. A South African news paper (Brand Patric: Rand Daily Mail, October 17) wrote -” The Brazil-Russia-India-China-South Africa formation is slowly being written off as a bloc that can administer coherent political action. There were always questions since the early days of BRICS but recent party political changes in some member states have raised the hurdles. In addition to political incongruous political developments in member countries, divergent economic trajectories has increased doubts as to whether BRICS is a workable project. Indian and Chinese economies are growing at more than 6% while the other three resource-cursedeconomies are in crisis. And the unpredictable geopolitical movements add to obstacles that prevent the BRICS network from acting as a coherent bloc.

 It adds that Intra-BRICS geopolitical dissonance is growing. Not only has Temer’s all-white-male cabinet in Brasilia embarked upon a mass privatisation strategy to appeal to Western capital. The far-right Hindi nationalist government of Narendra Modi in New Delhi has been cozying up to the Pentagon. In contrast, more actively anti-Washington leaders in Beijing and Moscow are sabre-rattling. The former’s rattling is over a few strategically-placed rocks in the South China Sea. Russian conflicts with the West continue in the eastern Ukraine and Syria, not to mention allegations of Russian-hacked emails repeatedly wounding Hillary Clinton. In Pretoria, politicians are as usual talking left while walking right. For example, Gwede Mantashe the general secretary of South Africa’s ruling ANC recently pronounced: South Africa will continue to call for the transformation of the Bretton Woods Institutions and oligopolistic credit ratings industry. Mantashe’s statement reflects the conventional expectation that global credit rating agencies will downgrade South Africa to junk status in December. With this will come a run on the currency.

Thrust of Goa declaration on Terrorism

The BRICS Goa Declaration adopted a tough, stronger and more detailed language on the issue of global terrorism than previous BRICS Summit documents, on dealing with the issues. It adopted a declaration suggesting to “adopt a comprehensive approach in combating terrorism… radicalization, recruitment, movement of terrorists including Foreign Terrorist Fighters, blocking sources of financing terrorism, including through organized crime by means of money-laundering, drug trafficking, criminal activities, dismantling terrorist bases…” It obligates the international community to   “successfully combating terrorism requires a holistic approach.”

The Goa Declaration calls upon all countries “to work together to expedite the adoption of the Comprehensive Convention on International Terrorism (CCIT) in the UN General Assembly without any further delay.” India has raised this issue on other regional forums also in the recent past. The Declaration goes on to reiterate “the responsibility of all States to prevent terrorist actions from their territories.” This is similar to the commitment that India had obtained from Pakistan in January 2004, but which, during the intervening years, has been observed more in breach than in compliance.

India along with other BRICS members made the point very strongly that sponsorship of terrorism by any state should be dealt with strongly and sincerely by the international community. “We strongly believe that our fight against terrorism should not only seek to disrupt and eliminate terrorists, terror organisations and networks, but should also identify, hold accountable and take strong measures against States who encourage, support and finance terrorism, provide sanctuary to terrorists and terror groups, and falsely extol their virtues.”This was a tangential reference, but clearly understood to refer to Pakistan not only by the participants, but also to the global community. The section on terrorism concludes with a pledge “to take concrete measures to step up cooperation and coordination among our law enforcement, intelligence and security organizations.”Both the BRICS and BIMSTEC groupings underscored their determination to fight terrorism jointly and through cooperation among their intelligence agencies and law enforcement organizations.

The Diplomat raises very relevant issues with regard to sincerity of Russia and China on the issue of terrorism and also leaves an indication of voices in BRICS which are not in uniformity. “In addition to the formal declarations, two aspects are particularly noteworthy in the statements made by the leaders of Russia and China at the plenary session of BRICS.

First, there was no reference at all to the issue of terrorism in the statement by President Vladimir Putin. Russia is afflicted by this menace and has been confronting it for several decades. Moreover Russia knows that India attaches immense importance to this issue, as would have been evident from Modi’s statements in bilateral as well as multilateral discussions. India would have expected Russia to be supportive of and sensitive to its fundamental concern. So why this glaring omission? Some thought needs to be given to this by India’s policymakers. As the bard would have said, “This was the most unkindest cut of all.”Was the omission made under Chinese guidance or advice? If so, this raises several more vital questions which need to be elaborated and discussed further. It is highly unlikely that Russia avoided the topic of terrorism because it has started equating India with Pakistan. Russia will also need to reflect upon both the substantive aspects as well as optics of the “special and privileged strategic partnership” between India and Russia. Second, while Chinese President Xi Jinping did mention terrorism in his plenary address, he lumped it with other international challenges like natural disasters, infectious diseases, and climate change and even put terrorism at the end of this list. No surprise here – it was not expected that China would be particularly sensitive to India’s concerns on this or other issues. In addition, Xi also referred to finding “political solutions” for “regional hotspots” and also dealing with the “symptoms and core issues” of problems confronting the global community. The language used is familiar. The formulation of “core issue” is always employed by Pakistan to describe Kashmir.”

The outcomes of the BRICS Summit was less than optimal due to several reasons. The expectations were very high as the BRICS make up half the world’s population and nearly a quarter of global GDP ($17 trillion combined) together. BRICS would have made a larger impact the global economy and geo-politics move  Added to their economic clout, the leaders themselves are formidable strongmen, both regionally and globally: Prime Minister Modi, President Xi, President Putin, President Zuma and the new Brazilian President Temer who replaced strongwoman Dilma Rousseff. Yet despite the power-packed photo opportunities at Goa this year, there are several reasons to believe that the BRICS forum, once comprising the world’s fastest growing economies, is running out of steam. The slump in oil prices has negatively impacted both Russia and Brazil’s growth stories, and Russia has paid heavily for western sanctions over Ukraine. Chinese manufacturing saw its weakest growth in years, while India has faced a contraction in IIP figures even though it remains the world’s fastest growing economy. The South African Finance Minister himself said his economy is in “crisis” this year, with revised growth estimates falling below 1 per cent, and 26 per cent unemployment, fuelling violent protests.

The analysts also point out one of the main reasons of loss in BRICS steam is a remarkable shift in Indian political stand. Two years ago, when newly elected Prime Minister Narendra Modi took his first official visit outside of the neighbourhood to Fortaleza, Brazil, to attend the BRICS summit, he was yet to take his decisive shift toward the U.S. As a result, the BRICS joint statement included some bold paragraphs on counter-western views, on issues including Palestine, and the world economic order that are unlikely to find space in the Goa declaration.

Meanwhile bilateral ties between India and China have reached new lows: with China’s CPEC clinch with Pakistan and India’s shift to the U.S.’ strategic corner on the South China Sea. Russia’s shift away from an exclusive relationship with India, ambivalence on defense ties with Pakistan consistent with its new dependence on China is another factor that is loosening some of the mortar between the BRICS countries. Brazil and South Africa are also known to have reservations on India’s bid for the NSG membership, possibly prompted by China that has openly discouraged non-NPT members, which is a critical issue for India later this year when it tries to push through the bid again.

But it cannot be said that this year’s BRICS Summit went in vein except recognizing the urgency to curb terroris. The BRICS nations established the New Development Bank (NDB) in July 2014 with an initial authorized capital of US$ 100 billion and the bank was officially launched a year later. At this year’s BRICS summit, India signed an MoU on General Cooperation with New Development Bank (NDB) through the BRICS Interbank Cooperation Mechanism. (Five banks from the BRIC nations had established the BRICS Interbank Co-operation Mechanism to enhance trade and economic relations amongst the BRICS nations and enterprises.) Moreover, the president of the development bank, KV Kamath, stated that the NDB would lend up to US$ 2.5 billion next year, including loans backing ‘green’ projects. The NDB has thus far approved US$ 900 million in loans to green projects in each of the BRICS states. A renminbi-dominated borrowing program has also begun.

 A key development on the sidelines of this year’s BRICS summit has been greater business and economic engagement between India and Brazil, even as relationships with China and Russia entered more testy waters due to contradicting political interests. India and Brazil exchanged four memoranda of understanding (MoUs) last week, which included an Investment Cooperation and Facilitation Treaty; an MoU on Genetic Resources, Agriculture, Animal Husbandry, Natural Resources and Fisheries; an MoU on Pharmaceutical Products Regulation; and an MoU on Cattle Genomics and Assisted Reproductive Technologies. At present, Brazil accounts for only 1.21 percent of India’s total trade at US$ 6.69 billion in 2015-2016. Hoping to accelerate this relationship, the Brazilian Ambassador to India, Tovara Da Silva Nunes, highlighted the important sectors that show scope for growth in their bilateral trade – medical equipment and medicines, aerospace, aeronautics, oil and natural gas, chemicals, fertilizers, and processed food. Additionally, market opportunities exist in the areas of food and drinks (coffee, tea, fruits, cocoa, and confectionary products), home and building (woods), machinery and equipment (vehicles and auto parts), and mineral products.

Any bigger cooperation, nevertheless, is not possible without accommodating strategic concerns of India in particular and calculated diplomatic drifts among the member countries bringing more trust among them. Melissa Cyrill in India Briefing (October 19, 2016) rightly points out several challenges that need to be addressed to make BRICS more effective. According to the analyst, many challenges lie ahead for the BRICS. Each of these emerging economies are presently on divergent growth paths, which in turn translate into differing priorities and the lack of a unified agenda. Nevertheless, since these five countries cumulatively hold considerable weight in global economics and politics, their continuing engagement serves well for stable growth prospects in the regions they encompass. This is why overcoming individual ambitions is a prerequisite if the trends toward deepening through institutionalization (via the year-old New Development Bank and the proposed ratings agency) are to actually materialize. In that sense, it makes more sense for the BRICS quintet to subscribe to a well-defined economic scope to avoid getting caught in the quagmire of geopolitical rhetoric. Though such a mandate would be necessarily limited, seeking exclusively to promote investments and commercial collaboration, they would also invariably reflect the dynamism of these five powerful economies.

As far as BIMSTEC is concerned, it was supposed to have high prospects with regard to cooperation in a variety of areas. The seven-nation grouping of Bangladesh, Bhutan, India, Sri Lanka, Thailand, was founded in 1997 as BISTEC, and then refurbished as the Bay of Bengal initiative for Multi-sectoral technical and economic cooperation (BIMSTEC), but has floundered since then for lack of funding. It didn’t even have an office, and meetings were held at the Thai foreign ministry in Bangkok until it was given headquarters in Dhaka in 2011 and a secretary general, Sri Lankan diplomat Sumith Nakandala, in 2014.

BIMSTEC Leaders’ Retreat 2016 Outcome Document 

The declaration of BIMSTEC recalled the principles enshrined in the 1997 Bangkok Declaration and reemphasized that cooperation within BIMSTEC will be based on respect for the principles of sovereign equality, territorial integrity, political independence, non-interference in internal affairs, peaceful co-existence and mutual benefit. In the eclaration the members agreed to intensify their efforts to realise the objectives and purposes of BIMSTEC as outlined in the 1997 Bangkok Declaration, and reaffirmed that BIMSTEC has considerable potential for economic and social development through mutually beneficial cooperation in the identified priority areas. We pledge to work collectively towards making BIMSTEC stronger, more effective, and result oriented. The members also recalled the Third BIMSTEC Summit Declaration issued in Nay Pyi Taw on 04 March 2014, and reiterated their deep commitment to BIMSTEC as an organization promoting regional cooperation and integration in the Bay of Bengal region. They recognized that their geographical contiguity, abundant natural and human resources, rich historical linkages and shared cultural heritage provide BIMSTEC the ideal platform to promote peace, stability and prosperity in our region.

Recognizing that terrorism continues to remain the single most significant threat to peace and stability in BIMSTEC region, they reiterated their strong commitment to combat terrorism in all its forms and manifestations, and stressed that there can be no justification for acts of terror on any grounds whatsoever. They expressed their strong belief that their fight against terrorism should not only seek to disrupt and eliminate terrorists, terror organisations and networks, but should also identify, hold accountable and take strong measures against States who encourage, support and finance terrorism, provide sanctuary to terrorists and terror groups, and falsely extol their virtues. There should be no glorification of terrorists as martyrs. In the BIMSTEC declaration they recognized the need for urgent measures to counter and prevent the spread of terrorism, violent extremism and radicalization. They also expressed express their determination to take concrete measures to step up cooperation and coordination among our law enforcement, intelligence and security organisations. In the same vein, they also committed to expedite the signing of the BIMSTEC Convention on Mutual Assistance in Criminal Matters, and to early ratification of the BIMSTEC Convention on Cooperation in Combating International Terrorism, Transnational Organized Crime and Illicit Drug Trafficking. Being acutely aware of the growing threat to our planet from climate change, and in particular to the lives and livelihoods of peoples in the Bay of Bengal region, the members resolved to strengthen cooperation to protect and preserve the environment. They also stressed the necessity of pursuing sustainable development and of the implementation of the Paris Agreement on Climate Change at the regional and national levels.

The language in the BIMSTEC Leaders’ Retreat Outcomes Document on confronting global terrorism is sharper and more specific. It proclaims that “terrorism continues to remain the single most significant threat to peace and stability in our region.” Recognizing that, the BIMSTEC countries “reiterate our strong commitment to combat terrorism in all its forms and manifestations, and stress that there can be no justification for acts of terror on any grounds whatsoever. We condemn in the strongest terms the recent barbaric terror attacks in the region.”

Also the BIMSTEC document was remarkable for conncern for natural disaster and regional connectivity. In the document the members encouraged closer cooperation in disaster management through joint exercises, sharing of information including early warning system, adoption of preventive measures, joint action on relief and rehabilitation, and capacity building. They agreed to build on the existing capacities in the region and to explore the possibility of establishing partnerships with other regional and international entities in this sector.

Being convinced that the development of connectivity in various forms and manifestations is the key to promote regional integration, the members expressed  satisfaction at the continuing efforts and initiatives to advance multi-modal physical connectivity (air, rail, roads and waterways) in the BIMSTEC region. They noted  with satisfaction the progress achieved in implementation of the recommendations of the BIMSTEC Transport Infrastructure and Logistics Study. We agree to explore the possibility of having a BIMSTEC Motor Vehicle Agreement.

Much of BIMSTEC’s success, say analysts, will depend on keeping the grouping away from politics that bedeviled SAARC. “India must not to fall in the trap of putting geopolitics over economics, reducing BIMSTEC into just another geopolitical weapon for isolating Pakistan. Rather, India should lead BIMSTEC positively with a much broader, inclusive vision driven by economic merits of cooperation,” said Prof. Syed Munir Khasru, Chairman of Dhaka-based think tank, The Institute for Policy, Advocacy, and Governance (IPAG).

In the past few months, the grouping has shown a coherence and focus that is leading to new projects on connectivity, building infrastructure and sharing resources, both inter-regionally as well as bilaterally. India’s “Act East” policy is spurring the government to extend the Trilateral highway project all the way to Cambodia, to help with port infrastructure in Bangladesh, Sri Lanka and Myanmar, while recently rescued ties with Nepal will see the government step up its hydel and road projects there.

In addition, the ‘SASEC’ grouping that also includes the Maldives, met last month to clear infrastructure projects funded by the Asian Development Bank, and the BBIN (Bangladesh, Bhutan, India, Nepal) and BCIM (Bangladesh, China, India, Myanmar) groupings are seeing their projects on seamless connectivity moving at a quicker pace.In addition, the ‘SASEC’ grouping that also includes the Maldives, met last month to clear infrastructure projects funded by the Asian Development Bank, and the BBIN (Bangladesh, Bhutan, India, Nepal) and BCIM (Bangladesh, China, India, Myanmar) groupings are seeing their projects on seamless connectivity moving at a quicker pace.There are great expectations from India. As the lynchpin between BRICS and BIMSTEC, India can carve out a new leadership role that will help the region, while tiding over the current tensions within its BRICS partnerships.

PM Narendra Modi addresses the BRICS-BIMSTEC Outreach Summit in Goa on October 16. As stated by India’s Prime Minister Modi, intra-BRICS trade stood at US$ 250 billion in 2015. This accounts for barely 5 percent of the global trade. However, while a free trade pact among these countries is not a working consideration, a fresh boost comes from this year’s acceptance of a tax and custom cooperation framework to facilitate trade among members. Alluding to this positive development,  Modi called for the BRICS nations to target the doubling of the current trade volume to US$ 500 billion in the next five years. Finally, the first BRICS Trade Fair took place this year, shortly before the summit, in New Delhi. Along with the BRICS Business Council, the BRICS Trade Fair can work to strengthen mutual trade, enhance business opportunities, establish key investment linkages, and promote ease of commerce in the intra-BRICS region. Nevertheless, the success of such trade aspirations will not be achieved without sufficient trade liberalization – a commitment that is losing appeal worldwide as populism and protectionism underline state policies.