BRIC creates ripples in international order

The finance minister, ahead of the G20 meeting, has met the finance ministers of Brazil, Russia and China in London. Several issues of mutual and international concerns were discussed including the global melt down, recession, unemployment, security, issues before WTO, etc.

The meeting assumes all the more importance in the present situation as already two major European nations France and Germany have already made a call for India to increase her contribution in the IMF with other developing nations of the G20. The finance ministers of France and Germany in a joint statement has written, “Other countries like India, Saudi Arabia and other emerging markets can be expected to make pledges and we should continue to call on them to join the international effort”. Such a demand has been made by the European nations to the developing nations for overcoming the global meltdown. Earlier, the Prime Minister of India had agreed in April this year in a meeting of the G20 in London to add $500 billion to the IMF, particularly to help poor countries to overcome the credit crunch. This was in tune with the huge $1.1 trillion rescue package announced by the British Prime Minister then during the summit to overcome the global meltdown.

However for India to agree to such a proposal should not be unilateral from Indian side it has to be attached with terms and conditions which the Indian government in agreement with her Russian, Chinese and Brazilian counterparts should put forward towards the Western nations. One of the important conditions should be wider say in the functioning of the IMF for the developing nations including greater say in the running of the IMF. Another major issue is the issue protectionism and India’s position on it. On this count India has achieved a major success as in the meeting of the BRIC, Russia, China and Brazil has endorsed India’s position on it. This was issued in form of a communiqué jointly issued by the BRIC nations after the London summit. Now it’s important for India to jointly lobby with the BRIC nations in the G20 for equitable trade at the global level and not on the terms and conditions of the Western nations within the WTO.

Looking into the new concept of the BRIC its seems to be mutually beneficial for all the four nations to corporate both at the bilateral level within the BRIC and at the global level. India’s relationship with Russia is time tested and historic. India’s 70 per cent of defence and military trade is with Russia. India has major bilateral agreements with Russia on several fields touching art and culture, education, scientific research, space, nuclear technology, etc. Rough estimates of India’s annual trade with Russia for 2008-09 is expected to touch almost $50 billion.

Except for the border issue
With China in last 20 years of so India’s relationship has improved significantly though the thorny border issue is yet to be solved. India is already a permanent observer of the Shanghai Corporation at the request of China . During the January-December period of 2004, Indian exports to China grew by 80.5 per cent to reach $7.68 billion. Meanwhile, India’s imports from China registered 77.2 per cent year-on-year growth to hit $5.93 billion. The trade balance for the year stood in India’s favour at $1.75 billion. Annual trade between the two countries is expected to rise up to $40 billion by 2010.

Looking into the bilateral relationship between India and Brazil the relationship has improved and flourished a lot in the last couple of years . Already India is one of the founding members of IBSA (India-Brazil-South Africa ) with Brazil which is flourishing a lot. Brazil has cooperated with India in every forum at the international level under IBSA whether at G8, G20, and G77 or for that matter in WTO. Annual trade between 2001 and 2005, of India and the Mercosur trade bloc (comprising of Argentina, Brazil, Paraguay and Uruguay) grew from less than one billion dollars to 2.3 billion. By 2009-10 it is expected to rise up to $10 billion.

Thus economically also in terms of foreign trade as well as investments the formation of the BRIC seems to be a good concept having unlimited scope and multilateral dimensions. Strategically such a formation has huge potentials. BRIC can emerge as the most powerful bloc of the Asia-Pacific world if it works out in the long run. It can emerge as a huge antidote against US imperialism in the coming years at the global level. But for that to happen all the four countries has to work together for a common goal leaving aside issues like border disputes, etc. For BRIC to become a success strategically and militarily mutual trust between the four countries should be the main parameter.

In a economic and business sense BRIC can emerge as a huge success story and can function as a new power bloc within the WTO, G8 and G20 thereby neutralising the hegemony of USA and the West within the WTO as an antidote. Success of BRIC would also have a huge impact in neutralising the American control on world bodies like the IMF, World Bank, WTO and the United Nation.