India Pulls Off A Diplomatic Coup, To Preside Over BRICS Development Bank Initially

The whole world seems to be headed to Brazil over the past few months. The country has been in the news for several reasons – an Internet summit, the glittering World Cup football and finally, the sixth BRICS summit.

In April, Brazil successfully hosted the Global Multistakeholder Meeting on the Future of Internet Governance (NETmundial) to discuss the Internet governance principles and the roadmap for the future evolution of the Internet governance ecosystem, despite the WikiLeaks issue. Interestingly, three BRICS countries, Brazil, India and South Africa, attended the NETmundial underlining the importance of the Internet and e-commerce.

BRICS nations (Brazil, Russia, India, China and South Africa) are the emerging and growing economies of the world, with China and India leading the race. The five countries are home to nearly half of the world’s population and account for about 20% of global GDP. Studies indicate that BRICS could be wealthier in future than the developed nations of today and may emerge the leaders of the New World Order.

BRICS is working to counteract the Western hegemony and ensure that the BRICS countries have a greater say in global issues, especially in the United Nations and the International Monetary Fund.

India is the second largest economy after China and Narendra Modi, the newly elected Prime Minister of India who is attending his first BRICS summit, has emphasised on peace, prosperity and economic growth.

“India attaches high importance to the BRICS forum for promoting global economic growth, peace and stability,’’ said Modi. “The Summit theme of Inclusive Growth, Sustainable Development will enable us to shape the post-2015 Development Agenda being discussed in the United Nations,’’ he added.

The Prime Minister has clearly stated that BRICS is also a political forum. “We cannot remain mute spectators,” he added. Modi has called for “zero tolerance” towards terrorism and stated, “I firmly believe that terrorism, in any shape or form, is against humanity. There should be zero tolerance towards terrorism. The choices we make now will shape the future of not just our countries but the world at large.”

Modi has continued to underline India’s economic growth and commitment to the environment, and said that his government would invest heavily in infrastructure, affordable housing, healthcare, education and clean energy. “We will champion clean and frugal resource use to maintain sustainability of our development process, without constraining our growth,” he added.

He has also called for greater co-operation in the fields of Internet usage and security. On the economic front, he has advocated an open, rule-based international trading regime for global economic growth and food security. India is keen that the BRICS Financial Institutional Bodies and Currency Reserve Fund are set up to counter the IMF and the US dollar currency. According to BRICS nations, as the IMF is controlled by Western countries, most of its funds go to the West.

As of now, the real success of the summit is the approval of the BRICS Development Bank, with an initial capital of $100 billion for infrastructure investments.

Narendra Modi’s first multilateral diplomacy seems to have been fruitful. It has been agreed that although the proposed BRICS Development Bank will have its headquarters in Shanghai (China), the first rotational presidency for five years will go to India.

Russia, after being expelled from G8 over the Ukraine issue, was looking for and received support against the US threat of new economic sanctions. It will be surely pleased that there will be a counter to the IMF.

The Trade Ministers’ meeting at the summit also decided to strengthen their economic relations. The document titled A BRICS Perspective on International Investment Agreements would serve as a voluntary reference to help countries with a more equitable approach to investment treaties. Intra-BRICS co-operation in e-commerce and in the MSME (Micro, Small and Medium Enterprises) are to be promoted through promotion of business contacts and information-sharing on regulations.

The Indian Prime Minister’s bilateral meeting with the Chinese President, Xi Jinping, was keenly awaited and has been successful. The two leaders have agreed to amicable and negotiated solutions at an early date to deal with the recurrent border disputes between the countries.

Modi has called for a rectification of India’s $34 billion trade deficit with China, which is the largest with any country. He has asked for increased infrastructure investments in India by China.

Xi has said that China and India should join hands in setting up global rules and invited Modi to attend the 21-nation APEC group summit in the later part of this year. Xi has confirmed that he will be visiting India in September. Both countries will work on improving interactions in all other sectors including tourism.

India has been keen to join APEC to boost its economic growth and this is the first time the country has been invited to attend the meet.

The BRICS summit has underlined India’s growing international power and Narendra Modi has established his leadership credentials.