In World Economy News 17/10/2016
The world’s largest emerging markets must double trade between their countries in the next four years and unite to fight terrorist threats that hurt economic prosperity, Indian Prime Minister Narendra Modi said.
Noting intra-BRICS trade was $250 billion, Modi said: “We should set ourselves a target to double this number to $500 billion by 2020”.
The eighth annual summit, which brought leaders from Brazil, Russia, China, India and South Africa to the tropical Indian state of Goa, took place amid heightened tensions between India and its nuclear-armed neighbor Pakistan. Terrorism, security issues and defense ties – particularly between India and Russia – dominated the weekend’s discussions.
Modi said the group must take a common approach towards tackling terrorism and terrorist organizations and urged member nations to deepen cooperation among their national security advisers.
“Terrorism casts a long shadow on our development and economic prosperity,” Modi told BRICS leaders. “Its reach is now global. It has grown more lethal and adept at the use of technology. Our response to terrorism must, therefore, be nothing less than comprehensive.”
Obvious Tensions
But tensions between the diverse BRICS member states were at times obvious. In a reference to China blocking India’s move at the United Nations to ban Pakistan-based leader of Jaish-e-Mohammed, Maulana Masood Azhar, Modi said individual approaches will be futile and counter productive.
“There must be no distinction based on artificial and self-serving grounds,” Modi said. “Criminality should be the only basis for punitive action against the individuals and organizations responsible for carrying out terrorist acts.”
The BRICS grouping, which originally aimed to reshape global governance by giving an international voice to countries excluded from established multilateral organizations, has set up a new development bank and tried to take unified stances on global issues. But the grouping has long suffered from a lack of cohesion and unity among its members. Apart from having large populations and emerging market status, BRICS members have little in common.
Tensions between the west and Russia are running high over the conflict in Syria, even as India — a long-time ally of Russia — is attempting to warm up to the United States.
China and India, despite a $74.9 billion trading relationship, are also geopolitical rivals: Beijing has blocked India’s attempt to join the Nuclear Suppliers Group, sought closer ties with Pakistan and has concerned New Delhi with investments in neighboring South Asian countries. Resource-rich South Africa and Brazil, meanwhile, are geographically distant from each other and many of the other BRICS nations, and have both also faced political turmoil back home.
Rating Agency
Modi said BRICS leaders should continue to push for changing governance architectures in line with the economic heft of the emerging economies. The bloc has been at the forefront of voicing the lack of say in running global institutions like the World Bank and the International Monetary Fund.
BRICS nations have agreed to hasten the creation of a new rating agency, Modi said, which had been floated as a way to liberate the relatively volatile emerging markets from the requirements of established western rating companies.
On Saturday, Modi pledged to deepen valuable defense ties with Russia at a bilateral meeting ahead of the BRICS summit, as India continues to purchase advanced weaponry to modernize its military as tensions rise in South Asia. In his meeting with Putin, both leaders decided to accelerate the process to draw up a free trade agreement between India and the Eurasian region.
Goa Declaration
At the conclusion of the BRICS summit, leaders issued the so-called Goa Declaration, a lengthy document with 109 separate points on matters ranging from space cooperation to agriculture and sport.
The broad, sweeping agreement said BRICS countries stood united on fighting terrorism and reforming the global financial structure, among other things. The declaration expressed concern about growing terrorist attacks in Afghanistan, and said member states pledged to help fight corruption around the world — including aiding in asset recovery and returning financial fugitives. The agreement reiterated member states’ desire to set up a BRICS credit ratings agency and said that advanced European economies needed to cede to two chairs on the executive board of the International Monetary Fund.
China will host the ninth BRICS summit in 2017.
Source: Bloomberg
