India′s Modi to host BRICS leaders amid rivalries, economic woes | Asia| An in-depth look at news from across the continent | DW | 13.10.2016
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India's Modi to host BRICS leaders amid rivalries, economic woes

The leaders of the world's most populous and powerful emerging economies are meeting over the weekend to look for ways to bolster their club and ease tensions among them. But it's uncertain whether they will succeed.

When former Goldman Sachs executive Jim O'Neill coined the term BRIC in 2001 to refer to four rapidly growing economies - Brazil, Russia, India and China - he wouldn't have thought that the countries would join hands in future to form a political grouping that is viewed by many as a potential counterweight to the Group of Seven (G7) industrialized countries.

And with the entry of South Africa into the BRIC club in 2010, its name turned to BRICS. Taken together, the five countries comprise nearly half of the world's population and account for about a quarter of its economy, with their combined total economic output estimated to be around $16 trillion. 

The impetus for their coming together came from their shared desire to lessen the power and influence of the US and Europe in global economic and political decision-making. To that end, they have repeatedly called for reforms to Western-dominated international financial institutions like the World Bank and the International Monetary Fund.

One of the signature achievements of the bloc came in 2014 when they launched a new global lending institution - called the New Development Bank (NDB) - which many viewed as a rival to the Washington-based World Bank. 

BRICS leaders then also agreed to set up a Contingent Reserve Arrangement (CRA) - a $100 billion contingency fund, which member states can draw on in financial emergencies when their foreign exchange reserves become dangerously depleted.

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Despite the initiatives and efforts to consolidate the group's institutionalization, many observers argue that the BRICS remains a bloc of disparate members driven by internal rivalries and competing interests. Closer association among the members is thwarted by fundamental differences in their political systems, values and economic structures, among other things.

China-India rivalry

Moreover, two of its members - namely China and India - have an unresolved border dispute and complicated ties beset with deep mutual suspicion. "This mistrust complicates multilateral cooperation between China and India and it also impairs the effectiveness of BRICS," says Moritz Rudolf, a research associate at the Germany-based Mercator Institute for China Studies (MERICS).

"As long as the border conflict between China and India remains unresolved, there will be no trust between the two nations," the expert told DW, adding that given the complexity of the border dispute, any improvement regarding border management would already be an important step in the right direction.

Relations between the two Asian giants have been strained in recent months as a consequence of a raft of disagreements between the two sides.

India harbors resentment at China's unwillingness to allow New Delhi's accession to the Nuclear Suppliers Group (NSG), an elite grouping that controls the export of technology and materials used to generate nuclear power and make atomic weapons. Beijing's ardent support to its "all-weather" friend Pakistan is also a source of consternation in India, particularly at a time of escalating tensions between Islamabad and New Delhi over the disputed territory of Kashmir.

Furthermore, Indian policymakers have been irked by China's moves at the United Nations to prevent a UN ban on Masood Azhar, leader of the Pakistan-based Jaish-e-Mohammad Islamist group.

The Chinese side, on the other hand, is worried about India's close relationships with countries like the US and Japan.

'Too heterogeneous' 

Against this backdrop, the 8th BRICS Summit is taking place on October 15-16 in India, which currently holds chairmanship of the club.

In the western state of Goa, Indian Prime Minister Narendra Modi will host Chinese President Xi Jinping and a host of other leaders, including heads of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) countries who have been invited to the Goa summit. BIMSTEC nations include Bangladesh, Bhutan, Nepal, Sri Lanka, Myanmar and Thailand.

In total, 11 leaders from BRICS and BIMSTEC countries will attend the meeting.The BRICS summit will start on October 15 and will end the next day, following which there will be a retreat, in which BIMSTEC countries will take part, officials said.

The leaders will discuss ways to buoy efforts to deepen and broaden cooperation among the club's members as well as measures to stimulate global economic expansion.

They would debate "global growth prospects, the role of BRICS in leading this global growth and our contributions to it," said Indian foreign ministry official Amar Sinha. He also confirmed regional security and climate change were on the agenda while Russia is expecting talks on Syria.

However, no concrete results are expected from the meetings. MERICS analyst Rudolf believes it's very unlikely for global initiatives to emerge out of the BRICS format, as the grouping is too heterogeneous and it becomes increasingly difficult to find common ground.

This view is shared by Paul Kohlenberg, a researcher at Berlin-based German Institute for International and Security Affairs (SWP). "The BRICS club continues to be a forum where only selective initiatives can be launched under certain circumstances," he said, adding that the members are simply too heterogeneous to be able to comprehensively align their interests across a broad field of topics at the leadership level.

"Because of shifts in the domestic politics of member states, the possibilities for closer integration are arguably even smaller than before," the expert stressed.

Push for closer trade ties?

Still, efforts are underway by BRICS to set up a new credit-rating agency that would challenge the dominance of existing Western agencies in issuing ratings to an issuer of debt. There has also been talk of China pushing for a free-trade agreement among the BRICS states, although Beijing has yet to make a formal proposal on the matter.

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But many argue that there is little enthusiasm among the other four countries for such an ambitious trade pact, as they already fear Chinese economic dominance and would be reluctant to tear down tariffs and other barriers, especially at a time when their economies are dogged by stagnant growth. 

South African Trade and Industry Minister Rob Davies, for instance, was quoted by the Hindu newspaper as saying that an immediate push for a BRICS free trade agreement would polarize heavily-industrialized and lesser-industrialized nations within the grouping. The minister instead argued for working together to create value chains in all the five countries.

Experts say China would also like to see the theme of its "One Belt, One Road" (OBOR) initiative reverberate in BRICS. But the Chinese plan, particularly the cooperation envisaged between China and Pakistan under it, has caused anxiety in India. 

"The Modi administration might try to push on this issue. It will thus be interesting to see whether any of these subjects will be included in the final declaration," said Kohlenberg.

Offering a non-Western alternative

Although there is some skepticism about the future of BRICS, observers point out that its members view it as a very important forum that has the potential to act as a counterweight to other multilateral forums dominated by the West.

BRICS has become a more attractive forum for Russia since 2014, says Kohlenberg. "After the Crimea crisis, it made strategic sense for Russia to re-emphasize the discourse of non-Western alternatives to global governance, which the BRICS symbolize."

Meanwhile, being the most powerful among the BRICS members, China is externally perceived as the leader of the club. And the existence of BRICS lends additional symbolic weight to Chinese initiatives in other forums, such as the UN, stressed the SWP analyst.

"For China, maintaining a unified BRICS is therefore a goal in itself." 

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