Millennium Post

Brics summit, a game changer

The coming summit of the Brazil, Russia, India, China and South Africa (BRICS) at Durban on 26 and 27 March gives a big opportunity to the BRICS nations to take a major initiative to speed up the process of developmental cooperation among the member countries by setting up the BRICS Development Bank. The proposed bank will help the BRICS nations to organise their developmental finances more easily and also help other developing countries to get assistance for key developmental projects on soft terms.

This will be a concrete action on behalf of the BRICS nations and in making a success of this move, much depends on the understanding between the five member group and especially between India and China. Initial discussions had suggested that the bank is located in Shanghai and reports indicate that India might not agree to this location. In fact, there is an apprehension among the Indian participants that China is trying to make use of its vast financial clout to dominate the working of this proposed bank and if the headquarter is located in Shanghai, there is every possibility of this Chinese supremacy.

During the summit, a feasibility report on the bank would be presented to all leaders. Finance Ministers of the BRICS countries have already finalised the report last month and the report also talks of the probable location as also the total equity and the sharing formula. Reports suggest that the proposed bank will have a total equity capital of $50 billion and each member country will be having initially an equal share of $10 billion as equity. South Africa has done lot of work in preparing the report along with India and South Africa is also interested in getting the headquarters of the bank to start with.

Since India is reported to be not in favour of the location of the bank in Shanghai, the issue will figure prominently when the new Chinese Prime Minister Li Keqiang meets the Indian Prime Minister Manmohan Singh on 27 March on the sidelines of the summit. This meeting will be preceded by a meeting of the BRICS Economic Forum on 25 March and BRICS trade ministers meet on 26 March. That way, if there are differences among the ministers on the details of the proposed bank, the issue can be sorted out at bilateral level between the Indian and the Chinese Prime Ministers on 27 March before finalising the Summit declaration. That way, this India-China meeting has assumed big importance in making a success of the Durban summit.

Sources say that although the feasibility report mentions of a BRICS led South- South Development Bank and initially funded by only these member countries, later the equity might be allowed to other interested non-BRICS countries as a part of expansion. Last year, BRICS leaders had set a target of achieving intra BRICS trade of $500 billion by 2015. The objective is to strengthen the BRICS collaboration by taking maximum advantage of the synergy in both economies and financial sector. Nuclear issues and the possibility of working out maximum area of cooperation will figure prominently during discussions. The discussions will be a part of the exchange of views on international situation and how, the five member countries can work on ways to finally progress towards nuclear disarmament. The BRICS does not have a separate negotiations track on nuclear issues but it will be a part of the discussions on international security. The very first joint communiqué by the foreign ministers of the BRIC countries in May 2008 mentioned disarmament and non-proliferation as two mutually complementary areas in international security.

Indian experts point out that this nuclear issue is of big importance to all the member countries, though for three members – Russia, China and India, the issues are more delicate. Russia and China belong to the five official members of the global nuclear club and are NPT signatories. India, on the other hand is a de facto nuclear power but not a signatory to NPT. Brazil and South Africa have signed the NPT as nuclear havenots but they possess nuclear power. Thus, there are varying perceptions on the nuclear issues but at the same time, there are enough ground for the member countries to agree on a number of issues. Russia, Brazil and South Africa have ratified the CTBT, China has signed it but not ratified it and India is one of the eight nations whose position has prevented the implementation of CTBT. India will reiterate its position that it is ready to join NPT but only with official nuclear state status. The NPT does not allow this but India is sticking to its position and this will be elaborated at the Durban summit again.

Indian sources mention that the dialogue on nuclear issues amongst BRICS members can not lead to any unanimity and it is better to cooperate in those areas where there is common understanding like actions to support non-deployment of arms in outer space, non-diversion to military ends of civilian nuclear materials and dual use technologies, common perception of the threats posed by nuclear terrorism and promotion of non-nuclear zones. But at the same time, India feels that Russia may not agree to take further steps to reduce nuclear arsenals due to any pressure by the other BRICS members. Russia might take its own decision taking into account its talks with the US on nuclear and missile defence issues. Similarly, India feels that its position on CTBT and NPT may not be fully acceptable to the other members

As regards the bilaterals, Manmohan Singh will have the opportunity to have a meeting for the first time with the new leadership of China. The talks will be of familiarisation nature and Singh will try to gauge the perception of the new Chinese President to the issues of India-China relations and the global issues. Indian leaders are of the view that the new leadership is very mature and there will be pragmatism in the Chinese leaders vis a vis the pending irritants in India-China relations.

As regards bilateral talks with the Russian President, Singh will have follow up talks on the visit of Putin to India and a quick review will be made of the progress in sorting out the pending issues mainly the new nuclear power plants and the defence deals. Singh will have important discussions on the progress of the talks with Iran on nuclear issues since the next round of talks between Iran and the world powers including Russia, are due in April. India has more common ground with the Russian position on the nuclear issues of Teheran as against the US’s present stance. There will be talks on Afghanistan also. (IPA)
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