24 MARCH 2016
GS II: BRICS
Building new alliances with BRICS
India’s assumption of the presidency of BRICS (the Brazil-Russia-India-China-South Africa grouping) comes at a time when many are questioning the group’s raison d’être. The economic health of the group is patchy and the contemporary political trajectories of its members are, to put it mildly, pulling in different directions.
The decision to form BRICS was based neither on the attractiveness of the economies of these countries nor on a cozy ideological confluence. To understand the need for this group to exist is to understand the need for flexibility mechanisms to achieve larger geo-economic goals. There is a need for New Delhi to take a long view on the purpose of BRICS and the space it creates for India within the contemporary international order.
Three expansive experiments
This order, as it exists today, is the result of three expansive post-World War II experiments. One was Pax Americana. It was built around the Washington Consensus, the simultaneous expansion of U.S. military might and of military alliances like NATO (North Atlantic Treaty Organisation); the creation of institutions like the World Bank and the International Monetary Fund, serving an Atlantic economic order; and finally the consequent expansion and consolidation of markets and market-led globalisation that undermined and crushed the alternatives.
The second experiment was the creation of the European Union (EU). With a collective desire to avoid the war and destruction witnessed in the first half of the 20th century, Europe's leaders quickly realised that deeper economic integration and mutual interdependence was the best guarantor of regional stability. The European project was different from the American one. It saw no need to expand its military might, having already closely integrated its security interests with that of the U.S. It became a collective that was — as European leaders are wont to remind us in moments of crisis — primarily a convergence of shared values. Arguably, the greatest successes of the EU were its ability to be able to softly prise out Ukraine and other former satellites of the Soviet behemoth from the Russian sphere of influence, and a renewed vision for Europe that went beyond “Mitteleuropa”. However, with the ongoing refugee crisis, growing entente with China, and the inevitable policy confusion that comes with being a monetary union without being a fiscal union, the European liberal project is seeking better days.
The third and most recent experiment is the emergence of the Chinese global play and the efforts to put together a new world order defined by state control and underwritten by state capitalism. China is also expanding its military might as it seeks to be a Pacific and Asian power. Through initiatives like the “One Belt, One Road”, it is vastly expanding its market access, and selectively drawing in countries that would simultaneously serve China’s strategic as well as economic interests. China is also creating new institutions like the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB), where India has significant stakes. However, the Chinese creation of new institutions is offset by its seemingly unyielding belief that the current rules-based global order is neither fair nor sacrosanct, and a new rule-framing moment is upon the world.
How BRICS lends heft
One may argue that India’s strategic interest must be in the continued existence of an open economic order and, as a rising power, liberal internationalism serves its interests best. Put differently, India could potentially (as its gross domestic product rises in the decades ahead) be the inheritor of the liberal international project for the very same realpolitik reasons as the U.S., and must seek to contribute to it through supporting institutions that serve it even as they cater to India’s national interests. But for this, it needs space within the old order to respond to its unique development and specific needs. It also needs to acquire weight within these institutions that would allow it to reshape the old establishment to work for new stakeholders and respond to contemporary realities. India cannot do this by itself. Given its fiscal and geopolitical constraints, it must engage with all stakeholders who could aid in this endeavour. India’s involvement with BRICS — and the NDB — should be read in this context.
Here, it is important to clarify what BRICS ultimately is: it is not a trading bloc or an economic union per se. Nor is it a political coalition — given the divergent geopolitical trajectories of each country. Brazil, India and South Africa broadly orient themselves towards the liberal end of the political spectrum, China pursues a trajectory that will, sooner than later, put it on a collision course with the U.S., even as it leverages the Atlantic economies in the medium term for its economic growth. And finally, Russia has once again begun to be perceived by NATO as an all-out threat, and not just a “frenemy”. From an Indian perspective, BRICS is a strategic geo-economic alliance that seeks to move the narrative emerging from the Bretton Woods institutions towards alternative models of development and governance — through the sheer weight of the incongruent collective. BRICS helps create new instruments for global relevance and influence for each of its members, and is itself one. Viewed through this prism, the development of BRICS institutions and the effectiveness of the NDB is what will define the success of the coalition in the coming years. For India, the success of the NDB and the AIIB may also ironically allow it a greater role in the institutions established in the middle of the last century.
BRICS should be an integral part of India’s grand strategy, and a vehicle in India’s journey from being a norm taker to a norm shaper. The bloc offers New Delhi greater bargaining space as India seeks to gain more prominence in institutions of global governance, and shape them in the liberal international tradition with a southern ethos. For instance, India trades more with the global South than the global North. It is the only member of BRICS that is likely to foster an open and rule-based economic architecture with the global South. It is uniquely poised to do so, thanks to New Delhi’s leadership role among the G77 and G33 groupings at the World Trade Organisation and the UN. Actions taken by India in its own developmental interests have the unintended consequence of strengthening the plurilateral economic agenda because it has scrupulously (on most occasions) adhered to the norms of the Washington Consensus. BRICS gives India the room to continue being an important player in the liberal international order while being part of a group which, for the old guard, could potentially emerge as the single most important reason for its dramatic reform.
As with the AIIB, India should not hesitate to join or create other BRICS initiatives that may have strategic implications for global trade, finance, cyberspace, and the larger economic system. Indeed, the U.S. and other European powers should encourage it. Since it does not strive to create disruptive norms, India is the best bet that the international community has to “slingshot” past the illiberal impulses in geopolitics. The Atlantic powers need to recognise that India’s role within BRICS is a bulwark against such impulses, and encourage its leadership in similar plurilateral forums.