BRICS: FRIENDS TOGETHER AGAINST WHOM?

Against the background of the events in Syria, the election campaigns in France and the USA and the situation around Iran, what analysts see as quite an important event - the fourth summit of the BRICS countries in India - went by unnoticed.

The reason for a certain restraint in the coverage of the summit in the world media was the closed nature and informal context of the meetings and secret discussions of questions of an economic and political nature.

BRICS is a group of five rapidly developing countries comprising Brazil, Russia, India, China and the South African Republic. Actual cooperation within the framework of the organization began in September 2006 when, at the initiative of Russian President Vladimir Putin, the first meeting of the foreign ministers in this format was held at the UN General Assembly session in New York.

On the results of this meeting the participants reaffirmed their interest in promoting multidimensional quadripartite cooperation because at that time the RSA was yet to join this organization.

Aware of their own importance in the world arena - 45% of the earth's population and 25% of world GDP - the BRICS countries are increasingly trying to reduce the dependence of their markets on the dollar. In New Delhi the member-states signed an agreement on using their national currencies for trade within BRICS. Trade volumes between these countries are growing annually by 28%.

The main topic of the latest meeting was the dissatisfaction of the members of the group with the current world order. Their position boiled down to the fact that the International Monetary Fund (IMF) and the World Bank (WB) should encourage the participation of the developing countries in managing their own affairs. It is common practice that the chairman of the World Bank comes from the USA, and a European representative is elected chairman of the IMF. President Obama is trying to nominate his own candidate for the developing world, an American of Korean origin, professor of medicine, Jim Yong Kim, who for a long time was head of the department for the fight against AIDS in the World Health Organization (WHO). But the BRICS countries have a more worthy and, they say, representative candidate for this office: a woman from Nigeria, Ngozi Okonjo-Iweala, who was formerly that country's minister of foreign affairs and the economy. Clearly, this was contingent upon a statement by western experts that "the position of the BRICS countries represents a danger to current world stability". In their opinion, the western countries should try to persuade Russia to leave BRICS and help it to join the EU with the proviso that Russia is prepared to accept European values.

Western analysts are also insisting on the need for direct talks with Brazil on bilateral cooperation. Because of the fact that among the BRICS countries Brazil is closer than the rest to the west in the cultural, geographical and historical sense, appeals to distance that country from the other member-countries are more constant. However, Brazil cannot be considered a representative of a Euro-Atlantic type. By cooperating with many countries Brazil is trying to pursue its own foreign policy line. An example of this is the sensitivity it is showing over the Palestinian question in contrast to the positions of the leading western countries.

Another threat, western experts say, is the fact that China, because of its affiliation to BRICS, is conducting an increasingly independent policy and Beijing's increasingly political aspirations are being encouraged by Moscow. But there is also no question of harmony in the mutual relations or solidarity of this group. There are a number of reasons for this. First, for Russia, and especially India, China's economic and strategic expansion is purely and simply geopolitical problem number one.  In this context it is worth mentioning the particularly complex mutual relations between India and China.

Both countries may be considered the main rivals for political and economic supremacy in the region.

Also, in striving to pursue a policy of neutrality, India is demonstrating an ambiguous position on many foreign-policy issues. India's attitude to the Syrian question may serve as a vivid example of this. Unlike such strong powers in the organization as Russia and China, India is in unison with the west and the Arab League.

Apart from a lack of solidarity on key issues of foreign policy and competition between themselves, another factor that infers a sceptical attitude to the prospects of BRICS is the lack of economically stable mutual relations between them, which in many ways may be explained by geographical isolation.

Despite all these many problems, it could be said that the existence of this group will help to "freshen up" the world economy. Experts point out that very soon the BRICS countries will be able to bypass all other leaders in rate of growth of GDP. For this reason every meeting of heads of state attracts more attention from experts.

Russia's incumbent president, Dmitriy Medvedev, said during the recent meeting in New Delhi that in the long term BRICS could become a leading centre of the global administration system. "Russia believes that BRICS should set itself up as a new model of relations which is being built outside the established stereotypes and structures of a 'bridge' or a 'broker'", he said at a session of the BRICS leaders. The Russian president also noted that "the participants in the summit agreed on the need for a speedy reform of international financial institutions including, first and foremost, the IMF".

Another step on the way to strengthening their positions in the world, especially in the developed countries, was the decision to implement a new project - a new development bank called the "BRICS bank".

As mentioned in the Delhi Declaration adopted on the results of the summit, the main task is to "mobilize resources for projects in the field of the infrastructure and vigorous development in the BRICS countries, as well as in other countries with an emerging market economy and in the developing countries".

Threat to the dollar

In the opinion of analysts, the most significant event at the BRICS forum was the signing of a "General Agreement on a Common Procedure for Opening Credit Lines in the National Currencies of BRICS". The participants in the agreement were the Chinese Development Bank, the Indian Export-Import Bank, the Brazilian Bank of Socio-Economic Development, the Russian Vneshekonombank (Foreign Economic Bank) and the South African Development Bank. These financial organizations will now be able to provide credit for each other and invest in joint projects, without attracting dollar assets.

Experts believe that the decision on reciprocal credit arrangements in national currencies will be of strategic importance in the future. If the aforementioned banks stick to the conditions of the agreement this means the American dollar is excluded from the economy of the BRICS countries. Bearing in mind the dynamic development of these countries and their growing influence, this could impact not only on the US' economic situation, but seriously affect the situation of such financial institutions as the IMF and the World Bank.

The BRICS leaders intended to sign a similar agreement a year ago when India made such a proposal. However, with the financial crisis in Europe, China had the opportunity to improve its situation in the world financial system. In exchange for offering to take on the debts of Greece, Portugal and Spain, China asked for greater powers in the IMF. But after being turned down by the world's financial elite, Beijing continued working on creating an alternative international banking system.

In December 2011 Japan and China agreed to assist in adopting their own currency instead of the US dollar in operations between Japanese and Chinese companies. The conversion of calculations into national currencies does not allow the dollar into this market where turnover between the countries now exceeds $148m. The effect of the agreements signed in New Delhi will have even more significant consequences; the sphere of the dollar's influence as a global currency will be reduced even more.

General views on world policy

Apart from the economic component the Indian summit was best remembered for its packed agenda of political discussions and statements. The countries expressed their support for a peaceful solution to the protracted conflict in Syria and a settlement to the Iranian nuclear problem without any military intervention. "We had an in-depth discussion of the situation in West Asia and agreed that the problems of Syria and Iran can only be resolved by way of a dialogue. Despite the fact that India did not support the obstruction of Russia and China in the voting on such a basic question as the draft resolution in the UN Security Council of 4 February 2012, we also agreed that the international community should continue its participation in Afghanistan," Indian Prime Minister Manmohan Singh said.  

Then, of course, there was the problem of Iran. As one might have expected, the BRICS countries devoted a considerable part of their discussions to the crisis around Iran. "The situation around Iran must not be allowed to grow into a conflict, the catastrophic consequences of which will not be in anyone's interests," the Delhi Declaration states. In the opinion of the leaders of the BRICS countries, "Iran has a key part to play in the peaceful development and prosperity of a region that is extremely important politically and economically".

"We expect Iran to make its contribution as a responsible member of the international community," the document says. "We respect Iran's right to the peaceful use of nuclear power in accordance with its international commitments and we call for a solution to questions linked with this by political and diplomatic means, as well as by way of a dialogue between the interested parties, including between the IAEA and Iran, as well as according to the provisions of the relevant UN Security Council resolutions."

The leaders of the BRICS countries come out in favour of creating the mechanism of a dialogue, and in the long term - the coordination of practical actions in the sphere of international security. Such a mechanism could include regular meetings between official representatives responsible for questions of national security, as well as consultations between experts. If the economic and financial potential of the BRICS countries is merged this would create a huge world economy which would surpass the USA in its strength. In the opinion of analysts in the BRICS countries, their alliance is looking to the 21st century, whereas the countries that currently dominate in the economic structures reflect 20th century positions and are organizing opposition to this organization in various directions.

It should be pointed out that the political cooperation between the five developing states was established comparatively recently, but in the event of the development of political inter-action between the BRICS countries, the international significance of this organization will increase appreciably. And it is very important to develop the same cooperation with other developing countries.

Thus, the BRICS countries, being the main "bricks" of the so-called developing world, can indeed become a dynamic vector of ensuring the global security and protection of the interests of these states.

OUR REFERENCE

BRICS is a group of five rapidly developing countries: Brazil, Russia, India, China and the South African Republic. Practical cooperation within the framework of this organization began in September 2006 when the first meeting of the heads of foreign political departments in this format was held in New York.