Partnership With Brazil, China, India, Russia Gathers Pace

The five-nation Brics partnership begins its fourth summit - the second attended by South Africa - in New Delhi (29 March 2011) with a momentum and sense of common purpose it has previously lacked.

These have been injected less by the partnership's internal dynamics than by developments elsewhere in the past 12 months - notably the continuing developed world's economic crisis, its politico-military assertiveness over Libya and Syria, and inertia in multilateral forums - the UN, the World Bank, the IMF, and the World Trade Organisation specifically.

Originally established as an economic alliance with its political objectives limited to lobbying for greater developing nation equity in multi-national trade, financial and economic forums, Brics is clearly moving towards including a strong political component.

This has been given greater urgency by China, alarmed by the formal focus shift of US military strategy towards the Pacific and Asia announced by President Barrack Obama last September, widely interpreted in Beijing as intended to ring-fence China economically and militarily.

But early sceptics of a political role for Brics, Russia and India are increasingly enthusiastic at the prospects of a developing-nation counter-balance to US and EU influence globally. Russia now speaks keenly of Brics as the "basis for a multipolar world" to replace the US-dominated uni-polar arrangement that followed the 1990 fall of the Soviet Union.

India, cautious about a political role given its historical tension with China, has succumbed to Beijing's steady wooing - most recently through the establishment of a bi-lateral commission and practical moves to significantly increase trade. India has entirely replaced its pre-2011 Brics summit rhetoric, when it gave vocal preference for a political role to the India-Brazil-South Africa forum as "a partnership of democracies".

But it is in the area of economic and developmental cooperation that Brics is showing greatest momentum.

This comes despite a slowdown in the surging growth of the Brics countries against the global average - China remains the world's fastest-growing economy, and even the Brazilian slow-down (from 7,5% in 2010 to 2,7% in 2011 and projections of 4,5% for this year) keeps it ahead of the pack.

Even the January spat between SADC countries and Brazil over charges of market tampering by product dumping by Brazilian poultry manufacturers is likely to be seen as one of the growing pains of the partnership, rather than a serious obstacle to cooperation.

The summit will consider 18 major recommendations from preparatory meetings, among them the establishment of a joint development bank and investment fund, and several practical proposals to "strengthen financial cooperation". These include an arrangement between national bourses to list and trade in derivatives based on the indices of their Brics counterparts. The programme is already in the preparatory stages at the Bombay stock exchange. Importantly, the products would be in the local currency, rather than via the US dollar.

The timing of a Brics development bank and development fund - which India has offered to host - is ideal for South Africa, on the lookout for loans for its R1-trillion infrastructure programme (Vol 30 No 3).

The Bretton Woods institutions will also be the subject of some attention in New Delhi. Having missed the opportunity last year to collectively lobby that the IMF executive seat go to a developing country candidate, Brics will be looking to influence the outcome of the World Bank appointment, due in June, when current head Robert Zoellick steps down.

Although the Brics leaders may opt to push for a developing nation candidate ahead of the summit, a more likely tactic appears to be to break the traditional stranglehold of the Washington-Wall Street axis, but back an alternative Northern hemisphere, or US, candidate. Among the possible candidates is economic professor Jeffrey Sachs, a director of Columbia University's Earth Institute, a strong critic of the World Bank's track record, accusing it of "blunders of huge proportions".

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