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Politics to temper Brics broader ambitions

Ben Blanchard

The leaders of the Brics nations have voiced lofty goals, from rebalancing the global economy to giving the developing world more say in the G20.

When Indian media reported recently that Chinese troops were in Pakistan-administered Kashmir, the response from China was vehement.

“Such talk is utterly baseless and totally absurd,” Chinese Foreign Ministry spokesperson Hong Lei told reporters last week.

The episode was a small reminder of the big political differences that confront the leaders of five of the world’s big emerging economies as they meet in China this week.

The leaders of the Brics nations of China, Russia, India, Brazil and South Africa have voiced lofty goals, from rebalancing the global economy to giving the developing world more say in the G20 and IMF.

But while they together make up nearly a fifth of the global economy and they indeed share a lot of common gripes, they also have many mutual rifts, China’s close relationship with Pakistan among them. Their broader aspirations will probably be frustrated by suspicion and diverging views on key issues.

Thursday’s gathering in the southern Chinese beach resort of Sanya, attended by South Africa for the first time, will last just a few hours, according to diplomatic sources.

“They share their relative underdevelopment ... and their willingness to establish a new world economic order, which is where they have greater weight and where they are listened to,” said Uri Dadush, head of the Carnegie Endowment for International Peace’s International Economics Programme.

“Beyond that, the differences are huge. There are rivalries, large rivalries, particularly between China and India. And there are potential rivalries between Russia and China in the long term.”

Even questions like whether the five should set up a more formal mechanism, like a secretariat, have no consensus; nor is there a clear idea about when or how they might add other members, such as Indonesia, Turkey or Mexico. The previous two summits, in Russia and Brazil, were inconclusive.

Coordinating views
Still, while the summit is unlikely to achieve much concrete, it will give the world’s big rising economies a venue to coordinate views on global financial reforms, commodity prices and other shared concerns.

“It is an important meeting; it’s added a new member and it’s demonstrated a commitment to position themselves in a political way,” said Chris Alden, head of the emerging powers programme at the London School of Economics.

“They wanted to represent all of the emerging and developing world, so that’s a rationale for bringing South Africa in, and all that suggests to me that there’s a self-conscious political motivation in how they see themselves,” he added.

Not-so-united front
The Brics group—evolving from the Bric term coined by Jim O’Neill of Goldman Sachs in 2001—has emerged as a loose united front to press the rich Western economies, especially the United States, which traditionally dominated global diplomacy.

South Africa asked to join the grouping at the G20 summit in Seoul and was invited by China to attend the Sanya gathering.

The five member countries accounted for just under 18% of the world’s $62-trillion economy in 2010, though China’s GDP was bigger than the rest of the Brics put together.

Their economic clout is growing, as the developed world struggles with debt and low growth, and the Brics are starting to operate as a common bloc in the G20, providing a counterpoint to the rich countries’ club, the G7.

China says it hopes in particular that the Sanya meeting will be able to get the group to form a common stance on commodity price fluctuations at the G20 summit in the French city of Cannes later this year.

Yet their politics, in some cases, differ wildly.

Brazil, India and South Africa are vibrant democracies, with close ties to the United States. China, now the world’s second-largest economy, is a Communist-ruled country with a low tolerance for political dissent and brittle relations with Washington.

China and India, despite a warming relationship, stare at each dubiously across a disputed, militarised border. India is also wary of China’s tight friendship with Pakistan.

The Brics countries do not even really understand that much about each other, noted Pei Changhong, head of the Institute of Finance and Trade Economics at the Chinese Academy of Social Sciences, a top government think-tank.

“We cannot say that we have a good understanding of these large developing countries ... These countries also don’t understand much about China,” he told a seminar last week.

It is far from certain that the summit in balmy Sanya will reach much of a firm conclusion about anything, even on economic topics.

Brazil has expressed concern that China’s yuan currency is kept unfairly and intentionally cheap, fuelling a flood of cheap imports into the country. China is adamant the yuan will not be a subject of discussion.

Differences of opinion
The future direction of the grouping is a source of uncertainty too, with some members wanting a much more official structure for the Brics.

Brazil’s new president, Dilma Rousseff, who has adopted a much more pragmatic, result-oriented foreign policy, may have less patience for diplomatic niceties and will want the Brics to be more than a political talk shop.

Senior Brazilian diplomat Gilberto Moura, who deals directly with the Brics, said Brazil was very keen to turn the group into a political forum, trying to forge common positions on a host of global issues.

“We are no longer a creation of Jim O’Neill,” he said, adding the situation in the Middle East and North Africa was likely to be on the agenda at Sanya.

Even here there has been a difference of opinion.

China, with Russia, India, Brazil and other developing countries have condemned the US-led air strikes on Libyan forces.

South Africa, on the other hand, voted in favour of the United Nations Security Council resolution authorising the strikes. However, during a visit to Tripoli on Sunday, South African President Jacob Zuma called for Nato to stop air strikes.

China, though, has been somewhat less than enthusiastic about making Brics into anything more than the rather informal bloc it now is.

India is also wary about the Brics’ future direction.

“There is a lot of cooperation in diverse areas such as climate change and trade to name a few. Even in the G20 the Brics formulation is a very strong grouping. But it cannot be a blanket or a default south-south political formation,” one senior Indian government official told Reuters. - Reuters

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