Jagannath Prasad Panda replies: The establishment of BRICS Development Bank is a progressive aspect of the world politics which indicate that the influence and economic clout of developing countries or emerging economies is on ascendancy. BRICS began with an economic mandate, advocating a transparent and an equitable global governance process in favour of the developing world, and to bring parity between the North and the South.
The Declaration pushes for a more equitable norm and the New Development Bank is an interesting outcome. The initial subscribed capital of $50 billion dollars and the responsibilities of the functioning are to be shared equally among the founding members of the bank. While China will host the headquarters, the regional centre will be located in South Africa; similarly the first President of the Bank will be from India, the First Board of Governors from Russia and the first chair of Board of Directors from Brazil.
Brazil will hold the 6th BRICS Summit of Heads of State and the Governments of BRICS from 15 July 2014 to 16 July 2014. It is a coalition of emerging economies providing alternative ideas of global governance.
Jagannath P. Panda replies: The future of IBSA is certainly under test after the rapid emergence of BRICS. IBSA is more about 'democratic' societies and India would like to capitalize on IBSA. The Chinese have recently urged informally for a merger of IBSA with BRICS, therefore, it will remain a challenge for India and other countries on how to sustain the future of IBSA. On the other hand, RIC is a track of three countries- Russia, India and China - who are involved in BRICS alliance as well. RIC is now working more as a second fiddle to BRICS. Though the significance of RIC has eroded substantially given the rise and prominence of BRICS, still the three neighbouring countries- Russia, India and China- would like to continue and sustain the RIC framework to discuss greater regional issues which are outside the purview of BRICS.
For more on the subject, please refer to my following IDSA publication:
The monograph portrays to understand and contribute to the strategic analyses of foreign, security and economic policy issues that are attached to the rise of BRICS. This is not only a study about BRICS per se; but is also about China and India, the two most vital powers of this grouping. This study has been written in Indian context, and has tried to delve into the China-India course within BRICS.
With the successful holding of the fifth summit of Brazil, Russia, India, China and South Africa (BRICS) in Durban during March 26–27, 2013, this influential group of emerging economies completed its first important phase of genesis and evolution. The idea was floated in 2001 as an ‘acronym’ created by an investment banker of Goldman Sachs, Jim O'Neil who believed that the fast-growing economies of Brazil, Russia, China and India would be the single greatest game changers in coming times.
Jagannath P. Panda replies: Strategic communities in India, Brazil and South Africa have started debating and discussing the possibility of creating a common bank for IBSA grouping. The idea is at a preliminary level and far from being actualised. Establishing a common IBSA Bank will not only require common understanding, but also proper political direction and consultation among the member countries. The launch of BRICS Development Bank is certainly a reference point in this context.
Given India’s economic and political weight, New Delhi must take a leading approach towards the creation of a common IBSA bank. However, it will not be easy to push this idea ahead given that the formation of a common bank will require stable funding resources, institutional mechanisms and trans-national cooperation among member countries. Besides, the BRICS Development Bank is still in an evolving stage and all the IBSA countries are members of BRICS. Both Brazil and South Africa may also find it difficult to contribute financially to IBSA bank since they have already agreed to contribute to the BRICS Development Bank.
It would not be a cliche to describe the strategic contours of Asia as being at the crossroads of history. A number of significant events are influencing the likely course that the collective destiny of the region could possibly take in the future. Some of the key issues and trends have been analysed in this year’s Asian Strategic Review
Jagannath P. Panda replies: ‘E-BRICS’ was proposed by the Egyptian President Mohamed Morsi during his recent trip to India. The Egyptian president expressed his country’s desire to join the multilateral grouping, comprising Brazil-Russia-India-China-South Africa (BRICS), in order to streamline the Egyptian economy. Egypt is currently undergoing a massive economic and political transition, and is looking for international support and assistance from a range of countries to help revive its economy and sustain the ongoing democratisation process.
With the conclusion of the recent Durban summit, BRICS has just finished holding the first cycle of leadership summits in each of the member countries. BRICS still is in the early stages of institutionalisation, and lacks formal rules and norms for induction of new members to further expand the grouping. Entry of Egypt into BRICS at this point of time may not be a viable idea as the Egyptian economy too is in the initial stages of transition and is not in the same league as other BRICS economies are. Besides, Egyptian entry would also compel BRICS to consider inclusion of other countries, like Indonesia, Mexico, etc. as well. Notably, none of the BRICS declarations so far have discussed in concrete terms the inclusion of any new member. BRICS needs to consolidate its current agenda, action plans and internal processes, before accepting or inducting new members.
Sixth BRICS Summit: A step towards more equitable global order?
The Declaration pushes for a more equitable norm and the New Development Bank is an interesting outcome. The initial subscribed capital of $50 billion dollars and the responsibilities of the functioning are to be shared equally among the founding members of the bank. While China will host the headquarters, the regional centre will be located in South Africa; similarly the first President of the Bank will be from India, the First Board of Governors from Russia and the first chair of Board of Directors from Brazil.