India has a big opportunity to show its leadership capability to address the major economic issues facing the world at the eighth BRICS Summit in Goa on October 15 and 16 this year.
As the Chairman of the BRICS – Brazil, Russia, India, China and South Africa – group for the year 2016, India is the host of the summit and it can sponsor a number of proposals which will help in giving a new dimension to the course of economic collaboration among the group members.
At the last Ufa summit in 2015, a number of important proposals were discussed and India has adopted the theme of the Goa summit as building responsive, inclusive and collective solutions.
Indications so far suggest that during its chairmanship of BRICS in 2016, India would adopt a five pronged approach- institutionalising to further deepen and sustain BRICS cooperation, implementation of the decisions flowing from previous summits, integrating and tapping synergies among the existing cooperation mechanisms, innovation-new cooperation mechanisms to tap full potential of BRICS cooperation and continuation of a mutually agreed existing BRICS cooperation mechanisms.
The focus during India’s BRICS chairmanship will be on enhanced people to people contacts of BRICS member states, especially youth. Further India has planned activities such as a U-17 Football Tournament, Youth Summit, Young Diplomat’s Forum, Young Scientist’s Forum, Film Festival and a Digital Conclave etc.
During the year 2016, as a run up to the summit, 80 events are being planned by India to step up cooperation and collaboration between different groups belonging to the BRICS countries. Indian officials are proposing a number of proposals including the setting up of an agricultural research centre but the main focus has to be on the proper follow up of the proposals from the earlier summit which deals with the issues relating to the reform of the global financial system.
Just as the setting up of the New Development Bank (NDB) and the currency reserve pool has to be followed up with ambitious programmes so that the west dominated financial system can be challenged and the course for an alternative in the coming future opens up. The other members like China, Russia and Brazil want India to play a pivotal role in bringing about that transition that may not be to the liking of the US dominated west.
In the recent months, there are some apprehensions among the major BRICS members that the Indian PM is focusing too much on his country’s bilateral relations with the USA at the cost of others, including BRICS and India, may not pursue vigorously the issue of taking forward the reserve currency pool arrangement.
India has to take up this issue in right earnest in the interests of the BRICS and there should be a move to strengthen the institutional mechanism by creating a secretariat. There should be clear and consolidated position of the BRICS members on the current international issues, regional security and information security.
For the Goa summit, the proposal for the setting up of a Credit Rating Agency (CRA) to challenge the western control of the international CRA’s like Standard and Poors and Moodys should get top priority. This is of prime importance as the US dominated rating agencies have been playing political games at the time of financial crisis at the cost of the emerging economies.
These international credit rating agencies have acted against the Government of Dilma Rousseff in Brazil and it played a role in worsening the economic crisis in the strife torn country. The setting up of a parallel CRA will be of big interest to not only the BRICS members but also to the other developing countries. Moody’s, Standard and Poor’s and Fitch together account for 90 per cent of the global rating market and this monopoly can be broken by floating the BRICS led CRA.
In fact, this proposed credit rating agency will fit in with the expansion of NDB. The BRICS rating firm could assist in assessing the big infrastructure projects which will be funded by NDB. All the BRICS members have been subjected to the prejudiced takings of the US rating agencies in the past. Russia, in particular, has been dealt adversely by these ratings firms. Russia alleged that these western firms had deliberately lowered Moscow’s rating after Ukraine crisis.
BRICS brings together five major emerging economies, comprising 43 per cent of the world population, having 37 per cent of the world GDP and 17 per cent of the global trade. India, China and Russia are the three major members and their trilateral cooperation can have a big impact on the global financial and trading system.
Starting essentially with economic issues of mutual interest in 2009 when the first BRICS summit was held in Russia, the agenda of BRICS meetings has considerably widened and this is the right time when India can give a big push to the proposals which will help in imparting a decisive shift in the global financial system in favour of the developing countries. Other BRICS members are anxiously looking to India for playing that role.