Author: Dattesh Parulekar
Source: russiancouncil.ru How do Indian experts see the role of BRICS in world politics and what do they think about current relations between Russia and India? Dattesh Parulekar, Assistant Professor, Centre for Latin American & International Studies, Goa University and Vice President, Forum for Integrated National Security (FINS), shares his thoughts on these issues.
What role should BRICS play in the rapidly emerging new world order? Some Indian experts believe that the role of BRICS has declined.
Actually the role of BRICS has not declined, the role of BRICS has only enhanced. Because right now there are big changes in the world. The U.S. is retreating from the world order. It is creating a vacuum, and in international relations no vacuum remains a vacuum. A vacuum has to be filled by some powers stepping in. And today it is not the world where a single power can step in. This is where BRICS can play an important role. What BRICS does is that it brings five powerful economies, powerful entities, strategic powers from different parts of the globe together. During the entire last decade BRICS has been able to go not only beyond statements, but has actually been able to develop new processes, new perspectives. And these perspectives have been very important because they allowed for building a consensus in relation to what has been perceived as a western order. The BRICS trend lies in providing alternative to the established western order. And that alternative is evoking progress. And every bit of the five countries are contributing to it in their own way. Of course, BRICS is not immune to the shifts in the balance of power. For example, what was the US–Russia, you know, competitive hegemony is now the US–China competitive hegemony. Still, Russia remains a very important strategic player. In fact, Russia has become a swing player. Essentially Russian goals determine the balance of powers, placing Russia in a very privileged position vis-à-vis BRICS. Also the fact that India, China and Russia now have reactivated the trilateral dialog called RIC, which happened in Buenos Aires, is also going to give further strength to BRICS. Because now they can actually use their trilateral cooperation as the building block within BRICS to strengthen BRICS even further. Ultimately, we all understand that, without being disrespectful to any country, there are big powers and small powers in BRICS. Brazil and South Africa are not on the same level as global powers Russia, China, and India. So, in that sense, RIC and the cooperation it entails actually becomes a building block for a stronger BRICS, which can provide a credible alternative to the western order or western institutions, etc.
So, you think that BRICS has positive future prospects?
Yes, I do. BRICS has a very important role to play, so long as it does not get into the fixation on becoming anti–US union, providing alternative is different from being confrontational or adversarial. There are some risks there because right now the US–Russia relationship is very adversarial. So it's possible that some of that can spill over into the BRICS situation. So BRICS has to adopt an agenda for autonomous action. But it should not become the opposite of America's. It shouldn't be a club, which is going to oppose America, since BRICS countries have also expressed willingness to work with the US. The objective is to find a more stable and a better world order. By providing alternatives you force both sides to come to negotiations. And that's why they are very clear about certain positions, for example on Syria. The position is very clear — there should be no regime change from the outside. At the same time, there was an acceptance of the fact that there must be some kind of a settlement and the terrorists have to be eliminated within Syria. On the issue of IMF and the World Bank — for BRICS countries, the BRICS New Development Bank (NDB) is a real achievement. They are now trying to implement BRICS technology fund, which is also a very important area. So these are real areas where BRICS is contesting the western order without necessarily becoming adversarial or confrontational to the western order. And that is where the success of BRICS lies. It's to find balance. That's what India has in mind, that's what China has in mind and that, I'm sure, in a larger context, is what Russia would have in mind.
Should BRICS expand its membership to become stronger?
There are some talks of a BRICS Plus concept. It has actually been suggested that, in terms of membership, India would like the accession of Mexico, while China would prefer Indonesia. I think such countries as Mexico and Indonesia are very prominent candidates.
Why are India and China interested in Mexico and Indonesia?
Because Mexicans are quite autonomous within Latin America. Do you understand Latin America's psychology? I always say that Brazil is the France of Latin America. Because, within Europe, France always stood up to America at times when it felt that Europe has been subjugated. They are not like the British, who just chase the Americans all the time. Brazil has stood up to the US on many occasions. Similarly, in this kind of scenario, Mexicans are now standing up to China. This is why there is a feeling in India that bringing a country like Mexico actually phases out the advantage that China currently has, because China can really dictate terms within BRICS through Brazil and South Africa. It is also due to Russia no longer enjoying the status of a great power that it used to be — it is still a significant power, it's a major power, but not a great power. If you remember Russia after the Ukraine crisis and the way Putin was embarrassed; there was a sense of isolation that Russia was feeling. BRICS provided a sense of comfort then. But there is also a lot of dependency building up in Russia on China. That helps China to dictate terms. So you need somebody as a counterbalance. Russia would also like to have a counterbalance. So, in keeping BRICS more stable and not be siding with China, Russia and India have a similar position.
Now, Indonesia is a very interesting case. For a long time the Chinese have felt very comfortable about bringing Indonesia in, because right now China has got Indonesia in the Belt and Road Initiative (BRI). There are a lot of projects. For example, high speed railway initiative that is happening right now. There are too many projects Jakarta is investing into and it needs the Chinese to conclude these projects, because only then Indonesia will be able to move to a higher level of economic mobility. And that's why the Chinese feel that they are their best friend.
That's why, in my opinion, China wants Indonesia and India wants Mexico. BRICS has its very important role to play but obviously, it has to keep building. It has to consolidate. I think that big challenge that BRICS will face is the issue of how to harmonize the policies. There are five countries from five different parts of the world, five different systems.
Do you have an answer on how to harmonize BRICS?
It again will be decided on case by case basis. For example, when it comes to legal harmonization, there is a big problem. Right now, if we are looking for some kind of customs union from BRICS, we are talking about trading investment treaty for BRICS, which can basically cover investment framework and investments that are made by BRICS countries within themselves. That's difficult to do because each one has a different legal system. Each one has a different political system. Russia is a different democracy, if you think it's one. India is a different democracy. China is not a democracy. The Brazilians have a different situation with regards to the rule of law. And the South Africans have their own problems right now. It is problematic when it comes to legal harmonization. When it comes to harmonization around political idioms, along political economy, along economic inversions, it is much easier. Rather than going into too much of the negative aspects of BRICS, focus on what BRICS has been able to accomplish: the BRICS bank, providing loans based on different parameters as compared to the World Bank and the IMF. There is green lending, for instance, which is conscious of ecology. There is lending that is now more transparent and is more objective now. Prime Minister Modi has talked of the BRICS University. It will be a science and technology place for innovation and research, where we can pull Russia's technological expertise with India's human resources, with certain elements that China brings in, and Brazil adding to it by its own pioneering potential, which stands very good in terms of airplanes, in terms of ethanol, etc. So this kind of activity really can make BRICS powerful. BRICS can be stronger in the field of socio- economic measures, it can be stronger in the field of political and diplomatic actions, it can be stronger in the field of economics, but it should avoid the temptation to become an anti-American group.
Do you think it is possible to create a joint currency for BRICS countries, like euro in EU?
I think that it will be difficult, because right now the best what they can do is agree to some kind of currency swap. No one currently sees the problem with the currency. China operates a very big banking system and no one really knows what it is all about. Right now there are so many bad debts. We don't even know the extent of bad gate. China is multi debt leveraged. China could actually be sitting on a bubble. And if the bubble bursts, the fall could be huge, so the other parts of the world will suffer. The problem is that currency union is an extremely sophisticated cause of action. It can only happen when we have a great deal of legal harmonization, economic convergence, traditional working together. But, yes, currency swaps, if they can agree, can help to clear payments. For example, right now India is buying the S-400 from Russia, and the Americans told us that we could not pay in dollars. The Americans are upset that we are buying the S-400 instead of their THAAD system. We allowed the Americans to dictate to us what we should do. So if we cannot pay in dollars, now we are working over with the Russians on what to do. Let's go back to what we used before — rupee-ruble. Under these circumstances, currency swap could be a better idea than currency union right now.
Currency union is a sophisticated way of economic convergence. It took the EU over 40 years to establish the economic and monetary union. These are different countries, but they are a part of one continent. Here we have five countries in five different parts of the world, so it's not realistic — the currency union right now. Currency swap agreement — yes, it can happen.
Let's talk about Russia–India relations. What we can do to improve them?
Sometimes they look very good and sometimes not. Look, I think the bottom line today is: we are living in the world where it is not rhetoric thatgoverns relations. It's not what you say, it's what you do. India and Russia really need to first improve their trade relations. I think we are trading just too little — around 10 billion USD. India trades 130 billion USD with the US, while Russia has been a traditional trading partner for years. There were numerous reports written in both countries about what to do, and given to Modi and to Putin. But somehow they are not able to move things forward. There are serious problems in the ways Russia's and India's economies are geared. Russia perceives itself as a free market economy, but it's not really a free market economy at all. There are huge concerns with regard to investors investing in Russia.
Why is India afraid to invest in Russia? How can our bilateral trade and economic be improved?
The Indian investors are afraid to invest because they are not comfortable with the idea of legally tested investment treaty, which can lead to and hold up in courts. Because they feel that tomorrow, if Putin decides on something, the courts may not resist. The courts may issue an order in favor of Putin. There is no confidence in the way the Russian system works. It's the unfortunate part. While investors are impressed by Putin's strong leadership, he also needs to be able to convince international investors through the rule of law that Russia can secure their investment. China has the same problem. But so far, Russia and India are not able to find convergences on what to trade. For instance, we are suggesting to trade in diamonds. That is one area, but there is a lot what we can do actually. We need to be able to encourage skill development, human resource interaction, for example, IT services, science and technologies, skill development, distant manufacturing. There are certain areas where both of us have certain core strengths, but we are not able to really put them together. That is why we still focus on defense, defense, defense.
Right now we can see certain chemistry between Modi and Putin. But chemistry can't bring the relationship forward. You can hug as much as you want, that is not going to make business. Business is about sitting down and doing the hard things. There are enough reports, by the way. It's not like we don't know what to do, but there are enough reports. The question is: how do we make it happen? Today Indian students don't look at Russia as one of the top list countries to go to and study. There are more students going to China from India than there are going to Russia. Right now, there are 60,000 Indians working in China, 17,000 students studying medicine, engineering. Indians used to go to Russia to study these subjects, but now they go to China. So these are concerns that we have to take on board. Many Indian families do not feel secure looking at the current situation in Russia. We really need to address these issues and, for once, be move from the focus on defense and look at non-defense areas. We can do a lot of innovation as well. You still have science and technology. Look at Russian defense – you send us the weapons that you've developed. Russia still has space technology, good science, engineers. And that's a common fit. We have to find new models, in which we can work together rather than just focus on the defense sector. Interviewed by Anastasia Tolstukhina, RIAC Website Editor.