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Mainstream, Vol XLVII, No 31, July 18, 2009

Of RIC, BRIC and BRICSA

Saturday 18 July 2009, by Ash Narain Roy

Strategic triads, quads and a plethora of new global groupings have steadily gained ground in the past few years. Call them strategic alliances or simply bargaining chips, the mushrooming new formations of the 21st century are like a kaleidoscope. You touch it and it changes shape and colour. The G-8 has practically become the G-20. On the other hand, given the dramatic rise of China and the global financial crisis, some would argue that for now only the G-2 (US and China) matters. Now the G-3 (US, China and Japan) seems to be emerging. With the inclusion of Brazil, RIC (Russia, India and China) has transformed into BRIC. Can IBSA be far behind? Will BRIC become BRICSA with the inclusion of South Africa?

At the time of global power disequilibrium the global pecking order is far from settled. While the base of the pyramid of power has been broadened in the post Cold War period, the summit is itself getting crowded. It is no more solitary on top. Despite the much-acclaimed democratisation of the globe, democracy is no more the only glue in these formations. Political clout of a nation emanates from its economic/strategic strengths, not from ideology.

Regional and global alliances follow neither a set ideology nor geographical specificities; they merely follow perceived economic and strategic gains. An alliance among India, Brazil and South Africa, the three countries separated by thousands of kilometres, would have been unthinkable only a decade ago. A grouping consisting of Brazil, Russia, India and China would have been even more unthinkable. But the way the world has moved and the fact of the centre of the world having moved east, new economic and strategic formations follow their own logic.

The summit meeting of BRIC nations held in June in Yekaterinburg achieved many firsts. It was the first-ever summit of the BRIC countries. It coincided with another summit of the Shanghai Cooperation Organisation, that too in the same city nestling in the Ural mountains. It also sent out a warning signal to the world: Move over G-8. BRIC is taking over. These countries are currently enjoying the highest rate of economic growth. They are therefore part of the solution, rather than part of the problem as far as the global financial crisis is concerned. The BRIC countries are catching up fast with the G-7 and could overtake it in less than two decades.

The BRIC nations have reasons to nurture ambitions to become most important global players. They are likely to be the new driving force of the global economy. Golden Sachs made a prediction a few years ago saying China will overtake the US as the leading economy followed by India, Brazil and Russia and that the combined economies of BRIC countries could outperform those of the six leading developed countries in monetary terms by 2050. As per the revised estimate, that may happen two decades earlier. A top Obama Administration official recently observed that the weight of countries like China, India and Brazil gives them clout in financial and political spheres and that the Obama Administration has decided to develop “a positive-sum trajectory” with these key players.

The Yekaterinburg summit left no one in doubt that the BRIC nations are seriously seeking a greater role in global financial institutions and a more diversified international monetary system. The summit leaders said quite plainly that a reformed financial and economic architecture should be based on a “democratic and transparent decision-making and implementation process at the international financial organisations”. They did discuss the idea of creating other reserve currencies so as to reduce the dominance of the US dollar. And yet, they rightly decided not to push the proposal for such a move could further exacerbate the global crisis. The cautious statement, analysts maintain, reflected China’s concerns that any anti-dollar statement could erode the value of its currency reserves.

Now that the Yekaterinburg summit has formalised this club, BRIC’s collective clout will grow. This meeting should be seen as a milestone in taking the world further towards multipolarity. It has put a stamp of approval on their aspirations to work together in the interests of strengthening international security and stability. There are significant synergies among the four countries that are going to multiply their income, consumption and infrastructure. If China and India are major consumers of resources, Russia and Brazil are rich in natural resources.

That is not to say there will be no competition among these countries for clout and access to strategic regions. China and India favour lower oil prices, but Russia and Brazil would seek higher prices for their resources. One thing which is common among the four is their growing capacity to project power internationally. The rise of China is perhaps the most significant tectonic shift in the global economic landscape and, as Western intelligence analysts maintain, India today is the most important swing state. But the rebound of Russian power is perhaps no less dramatic. A decade ago, the Russian economy was practically flat on its back. Today, Russian leadership wields growing power thanks to its energy resources and is pursuing a strategic agenda that is coming in sharper conflict with Western powers.

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Russia’s geopolitical leverage is immense. By hosting the BRIC and SCO summits on the same day, Moscow has shown its clout. It is definitely a triumph of Russian diplomacy. The Obama Administration has sought to mend ties with Russia practically on Moscow’s terms. There has been a dramatic change in Washington-Moscow ties, at least in rhetoric. In her first meeting with her Russian counterpart, US Secretary of State Hillary Clinton famously pressed a big red button symbolically resetting the relationship. Obama’s Russia visit has put the seal on this rapprochement. The Western analysts commit the folly of seeing Russia as a fading power undergoing an imperial retreat. Russia is a Eurasian power and it is well within its rights to assert its power and influence.

Russia derives strength from two additional factors. First, the rivalries of Asian states—Japan with China, between the two Koreas, China with India and India with Pakistan—allow Moscow to play a significant role. Second, Russia is still seen as a counterweight to the US. Even countries that welcome America’s presence, such as Japan and South Korea, bridle at their extent of dependence, while China and India share an antipathy to a unipolar world of US primacy. For all of them Russia is still useful as an independent, though weakened, foil to the US.

Tony Wood, a progressive Russia scholar, says that a core element in Russia’s strategic objective is the “use of the country’s resources to leverage a greater role in global affairs”. In geopolitical terms, over the past few years, Russia has successfully reasserted influence over what Russians call the “near abroad”—countries like Georgia and Ukraine and others in the Caucasus and Central Asia. Besides, by “looking east” to China for geopolitical alliance and by “looking west” for geoeconomic engagement to the European Union, Moscow has sought to counter America’s influence.

The US gained considerable leverage in the breakaway republics following the disintegration of the Soviet Union. Today the scenario has changed with the US desperately scrambling to hold on to its presence in Central Asia. Washington has been forced to agree to more than triple the rent it pays for use of a key air base in Kyrghyzstan to ship non-lethal military supplies for the US-led coalition in Afghanistan. A few months ago, US troops had been evicted from the Manas air base. This deal falls short of maintaining the base as a full-fledged military facility, but it will provide logistical support for the coalition forces.

Russian economy may be shrinking but its soft power gives it enormous leverage in the Caucasus and Central Asian region. Its geopolitical leverage can hardly be matched by another power. For a while Russia was moving inward. Now it has begun to assert its power. Russia’s military clout remains strong. By announcing the creation of the Collective Security Treaty Organisation, the post-Cold War version of the Warsaw Pact, Moscow has found a way to counter NATO. This rapid reaction force is to ostensibly combat terrorism, military aggression and drug trafficking in the CSTO zone.

The Russian bear is back. The West is only beginning to wake up to this new reality.

The author is an Associate Director, Institute of Social Sciences, New Delhi

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