For those closely looking at the trajectories of IFIs, especially the current trends of the New Development Bank (NDB) or the BRICS Bank, well, it’s all pancakes and fritters with news of NDB and BRICS Xiamen Summit all around.
The Bank, with 11 projects of over $1.5 billion already in their sack within a span of two years of their establishment, is targeting to lend $2.5-3 billion this year for ‘sustainable infrastructure’ ventures. In the last few weeks, BRICS witnessed saw a host of activities: NDB’s first regional centre opened in Johannesburg, South Africa; the interim sense of political ease happened between India and China on the Dokhlam issue just a few days before the Summit; the bloc again reinforced south-south cooperation by declaring to focus on the projects in Africa and Latin-America; their first project-financed firm commenced operations at Shanghai Lingang Distributed Solar Power Project (100 MW).
Now that the BRICS teammates have officially drawn the curtains at the finale this week at Xiamen, in their perpetual quest to overturn the western economic order, what were their projected takeaways placed side by side with their subtle agendas?
For our ease, let’s start with the first letter in the acronym coined by Jim O’ Neill of Goldman Sachs. Brazil, slouched under the pressure of staggering recovery from recession and joblessness, urged for economic cooperation in global markets.
Russia wanted to sign an intergovernmental agreement for international information security and did not hesitate to mention its initiative to establish an energy research platform for joint energy investment. They were also candidly advocating against global trade protectionism and for an open multilateral trade system.
Back here, India insisted on a medley of items—stronger cooperation in the financial sector and investment in private entrepreneurship to cater to the financial needs of ‘sovereign and corporate’ entities. Tenacious partnership with International Solar Alliance, birthed by both India and France, was also emphasised upon for ‘mutual gains’ through a comprehensive solar energy utilisation (read further exploitation of land resources for solar parks). Further India displayed vanity in having discovered digital economy as the tool for spurring economic growth and to attack corruption through demonetisation. While the World Bank and International Monetary Fund lauded this move, the citizens, independent experts, and local and international media criticised the reckless experiment thrust down to the country. In fact, RBI’s Financial Year report also indicated towards the monumental failure of the senseless decision. Media reports clamour on the resolution of the member nations to together fight corruption with a dedicated Anti-Corruption Working Group. Well, wait, did we hear anti-corruption? Does this also apply to the leaders of these nations as well, or to the higher management of their extolled NDB? We are reminded of Oscar Wilde, who said that the only thing to do with good advice is to pass it on. It is never of any use to oneself.
With the newly-begun construction of NDB headquarters in Shanghai last week and the sprouting AIIB with 80 members in its kitty, China, which who chaired this year’s Summit, did not miss time in laying bare its agenda – promoting its star project Belt Road Initiative (BRI), which linked its vital China-Pakistan Economic Corridor as well. During the Summit, China did not address its differences with India, which boycotted the BRI meeting earlier in May.
Further, China reiterated the idea of ‘BRICS Plus’ to invite more emerging developing economies to expand BRICS. Towards this end, China also invited leaders of Egypt, Guinea, Mexico, Tajikistan, and Thailand for dialogues on south-south cooperation and global development. It looks like China is on a high to alter the prevailing financial order and form a new open economic order, while critics point towards China’s discriminatory policies and trade barriers to favour local economy.
South Africa, the chair for next year’s Summit, elated by the opening of NDB’s regional centre, shared a concerted approach against global terrorism, while also listing out its goal of achieving the Sustainable Development Goals and Agenda 2063 Africa Union. Interestingly NDB’s only project in South Africa, a $180 million renewable energy project with Eskom, was rejected by the Government. When asked about the rejection, NDB’s Vice-President Leslie Maardop explained that the economic slowdown in the country melted the demand for electricity bringing it to a dip and that South Africa did not need new power supplies.
Let’s also quickly glance at other developments of this week, encapsulated here. The idea of BRICS credit ranking agency, which was pushed by India in Goa last year, was discussed again. Further, resilience and the ability of central banks of member nations to foster cooperation between Contingency Reserve Arrangement (CRA) and IMF was stressed by India. It is interesting to note here that earlier we were made to believe that CRA is an arrangement competitive to IMF and that it did not require dollar denominated IMF backing?
Another curious development during this Summit was the discussion to develop BRICS’ crypto currency, in line with its earlier agreement on lending in local currencies and settlement mechanisms. One wonders, why did the countries, especially China and India, ignore the foresightedness of their central banks, which recently cautioned against virtual currencies?
In retrospect, every year there are tall claims and forged partnerships under the façade of bilateral and multilateral talks among the BRICS members. However, it seems that no member country has given any deliberate and honest assurances pertaining to the human development—not in the parameters of amassing wealth, expanding economic markets or filling the ‘gap’ in infrastructure development alone, but that kind of an integrated growth which carefully avoids human exploitation, political manipulation, natural and human resource extraction, and devastation of natural environments.