BRICS Aim High
Image Credit: Ricardo Stuckert/PR

BRICS Aim High


Thursday’s daylong BRICS summit, hosted for the first time by India, made the right noises on contentious issues like Iran and Syria.

The five leaders – Presidents Dilma Rousseff (Brazil), Dmitry Medvedev (Russia), Hu Jintao (China) and Jacob Zuma (South Africa) and Indian Prime Minister Manmohan Singh – unanimously supported Iran’s right to peaceful uses of nuclear energy. Singh cautioned against rocking Iran’s boat too hard through “political disruptions” that would inevitably trigger volatility in global energy markets.

The leaders also came up with a unanimous position on Syria, advising the international community to deal with the crisis peacefully, but in a way that ensures the legitimate aspirations of all sections of Syrian society are taken into account while respecting the country’s sovereignty.

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Economically speaking, the grouping signed two pacts to boost intra-BRICS trade in their local currencies by: (i) extending credit facilities in the local currency and (ii) confirming the BRICS multilateral letter of credit confirmation facility. Once the two pacts are implemented in letter and spirit, intra-BRICS trade, which currently stands at less than $230 billion, is expected to climb to $500 billion by 2015.

BRICS leaders also gave a green light to a joint working group to set up a development bank that will integrate their economies more closely. The proposed bank would fund infrastructure and sustainable development projects not only in BRICS countries, but also in other developing nations.

But things could get tricky.  The United States is likely uneasy that two members – China and Russia – are blatantly anti-U.S. Given the uni-polar structure of today’s world, such a forum can’t dictate terms in international politics, but it can still offer significant nuisance value. In addition, there’s also some internal discord – China has consistently operated below the radar to block India’s candidature for permanent membership of the U.N. Security Council.

The BRICS bank that the forum wants to set up to challenge the supremacy of the World Bank and International Monetary Fund also remains a tricky issue, especially as no one knows when it will become a reality (if it ever does).

BRICS would do wise to avoid embarking on too ambitious a roadmap without arriving at a general consensus on some key issues. For a start, members should settle some of their respective bilateral disputes first before they start dreaming of developing a common BRICS currency or operating a BRICS bank. If they don’t, these summits will end up being just another talking shop and photo opportunity.

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