The More Things Change...

Given India’s recent foreign policy posturing, one might be tempted to conclude that India is distancing itself from the US and is trying to be a part of a new power alignment of emerging states. New Delhi announced last week that it has rejected bids by US companies seeking a $12 billion fighter jet contract, leaving only European defence contractors in the running. At the United Nations, India scuttled attempts by the western powers to strongly condemn the Syrian government for its attacks on protestors, merely asking the Security Council to urge all sides to abjure violence and seek a peaceful resolution. And before this there was India’s abstention on Libya at the Security Council as well as the much touted BRICS summit.

Representing around 40 percent of the world’s population and nearly a quarter of its economic output, Brazil, Russia, India, China and South Africa – the so-called BRICS countries – came together for a day on China’s southern resort island of Hainan last month to show off their growing global heft. Their joint statement underscored the need for a realignment of the post-World War II global order that was based on the untrammelled supremacy of the US.

The governing structure of international financial institutions, the statement said, “should reflect the changes in the world economy, increasing the voice and representation of emerging economies and developing countries”. This was in line with the longstanding demand of these rising economic powers for the restructuring of the global financial architecture to make it more representative. The statement also calls for “comprehensive reform” of the United Nations to make the body “more effective, efficient, and representative”. This was interesting as China is today the biggest obstacle to changing the permanent membership of the Security Council.

Among the more specific actions and recommendations announced were an agreement for development banks in BRICS countries to open mutual credit lines denominated in local currencies; a warning over the potential for “massive” capital inflows from developed nations to destabilise emerging economies; and support for “a broad-based international reserve currency system providing stability and certainty”. There was an implicit challenge posed to the status of the US dollar as the leading global reserve currency. The Sanya summit came weeks after Brazil, Russia, China and India abstained on the United Nations Security Council resolution that authorized a no-fly zone over Libya and “all necessary measures” for protecting civilians there from Colonel Muammar Gaddafi’s forces.

Clearly, there is an attempt by these emerging powers to coordinate their efforts on the global stage and as the US under the Obama Administration looks perpetually preoccupied with its internal troubles, a vacuum is being felt in the international system. Even Britain and France together are finding it hard to sustain their military campaign in Libya in the absence of American leadership. This presents an ideal opportunity for these emerging powers to finally emerge as major global players.

But great power politics is a murky business. For all the bonhomie at the Hainan summit, there are serious differences among the BRICS themselves. First, there is the structural disparity between China and the rest. China’s rise has been so fast and so spectacular that others are still trying to catch up. The dominance of China makes the very idea of a coordinated BRICS response to the changing global balance of power something of a non-starter. The overweening presence of China makes others nervous, leading them to hedge their bets by investing in alternative alliances and partnerships. Given the leverage that China enjoys in BRICS, it should not come as a surprise that China has suggested that IBSA, a grouping of democracies, be shut down in favour of BRICS.

Moreover, there are significant bilateral differences among the BRICS. Brazil is worried about the influx of Chinese investment and cheap Chinese imports and has been very vocal in criticising China for its undervalued yuan. Brazilian manufacturers are losing market share to their Chinese counterpart. Brazil is also wary of China’s growing economic profile in South America, a region that Brazil has come to consider as its own sphere of influence.

Russia is worried about its growing economic disparity with China. Russia’s failure to develop its Far East has allowed China not only a toehold in this strategically important region but has also pushed Beijing into the driver’s seat in defining the Asian security landscape. Russia’s Finance Minister Aleksei Kudrin has openly warned that if Russia fails to become a “worthy economic partner” for Asia and the Pacific Rim, “China…will steamroll Siberia and the Far East.” And, even though China is the largest buyer of Russian conventional weaponry, many in Russia see this as counterproductive because China might emerge as the greatest potential security threat to Russia, worse than what the US could ever become.

The saga of the recent decline in Sino-Indian ties is well-known. Despite the two sides deciding to resume defence ties during the Prime Minister’s trip to China, New Delhi remains sceptical of Chinese intentions. China’s refusal to acknowledge India’s rise and lack of sensitivity on core security interests is leading to a pushback with the Prime Minister himself acknowledging that “China would like to have a foothold in South Asia and we have to reflect on this reality…It’s important to be prepared.” trade imbalance in favour of China had gone up to $20 billion in the overall bilateral trade of $55 billion as of December 2010 from $16 billion in 2009.

As such it is difficult to see a productive future for BRICS together. Even on western intervention in Libya, there were significant differences in their approaches after all. In China’s and Russia’s case, abstention actually meant a yes as their veto would have killed any UN action. The fact that they abstained meant that they are willing to let the West proceed against Libya, albeit with limits. Moreover, they are non-democracies, so they can’t be expected to champion the democratic aspirations of the Arab street. The actions of India and Brazil, however, underline the real challenges of the emerging global order.

The rise of BRICS is as exaggerated as the decline of the US. Tectonic plates of global politics are certainly shifting but they may not be shifting in predictable ways, at least not yet.

Harsh V. Pant is the author of The China Syndrome