FIFTH IBSA SUMMIT

Concerned at the debt crisis in Eurozone, Prime Minister Manmohan Singh and leaders of South Africa and Brazil on Tuesday asked Europe and other advanced economies to take urgent steps to prevent the global economy from slipping into a double-dip recession.

They also demanded reform of global institutions of governance, including the United Nations and financial bodies, to address the current global challenges.

Dr. Singh and South African and Brazilian Presidents Jacob Zuma and Dilma Rousseff respectively discussed the crisis being faced by the advanced countries at a day-long trilateral summit. They were in agreement that the situation needed to be prevented from spiralling out of hand.

Dr. Singh said the world financial and capital markets were showing signs of “acute distress” due to the negative signals sent by the sovereign debt crisis in Europe and recessionary trends in the “traditional engines” of global economy – the United States, Europe and Japan.

“Developing countries cannot remain untouched by the negative impacts of these developments. Their ability to address their developmental challenges has been adversely affected,” he said at the 5th India-Brazil-South Africa (IBSA) Summit.

“We hope effective and early steps will be taken by Europe and other advanced economies to calm the capital and financial markets and prevent the global economy from slipping into double-dip recession,” Dr. Singh said.

With G-20 Summit in the offing in Cannes early next month, the Prime Minister said the IBSA should coordinate their positions in the run-up to it to ensure that priorities of the developing economies were adequately reflected in the deliberations of the grouping.

The grouping was united in its efforts to address the deficit in global governance, he said and pressed for enlargement of the U.N. Security Council to reflect the present day reality. 

 IBSA needs to step up pace on trade within the grouping and security

Prime Minister Manmohan Singh attened for the Fifth IBSA (India-Brazil-South Africa) Summit at a time when all three are serving concurrently as non-permanent members of the United Nations Security Council (UNSC) and there are questions about its relevance after South Africa joined the BRIC (Brazil-Russia-India-China) grouping in which it was the only one among the three excluded till the Sanya summit held in April.

Starting as a grouping that was stung by western intransigence at the Doha Round of trade talks, India has differentiated it from BRICS by pointing out that it is a grouping of democracies from three continents.

But as was seen at the BRICS summit in Sanya, China, most formulations in the joint statement closely mirrored those at previous IBSA summits. The difference lay in IBSA's accent on tackling socio-economic distress due to globalisation and setting in place a trilateral trading bloc — two aspects not even on the radar of the BRICS grouping.

Its Fund having won the Millennium Goals award with its operations in seven countries, besides the two Sudans, should IBSA focus more on South-South cooperation? Or should it take a more prominent role on the global political stage as it did recently by sending a joint delegation to Damascus to encourage democratic changes and a peaceful resolution to the situation?

The answer perhaps lies buried in the joint statement issued last month by IBSA Foreign Ministers, which sought to see the two issues from a unified perspective. The Ministers made it a point to stress that IBSA was a grouping of “democracies” all from the south (South Asia, South America and South Africa) and that it was committed to batting for the developing countries by seeking changes in the global political, economic and financial architecture.

Indeed, since its inception, IBSA has focussed on more aspects than BRICS. BRICS pulls more weight on political and economic issues as two of the members — Russia and China — are permanent UNSC members. On the economic side, one is in G-8, the other has become the world's second largest economy. But IBSA brings about more focus and has expended much energy on tackling the social aspects of globalisation internally.

IBSA exertions have led to as many as 16 working groups, a dozen memoranda of understanding with another five in the pipeline awaiting ratification at Tuesday's summit. So far, that has meant inter-continental travel for a wide swathe of the society of these countries — journalists to academics and bureaucrats to civil society activists. For IBSA to retain its relevance, operationalisation of intentions in papers and declarations is the key.

Also IBSA would have to step up the pace on two other aspects — intra-IBSA trade and security. India has already signed a Preferential Trading Arrangement (PTA) with Mercosur (of which Brazil is a part) and so have Mercosur and SACU (South Africa Customs Union). That leaves just the India-SACU agreement to seal the triangle.

On security, the three nations have different perspectives on security issues. Brazil is more concerned about issues in its Latin American backyard. South Africa lays more emphasis on developments in the African world, of which there are many, while India's geo-strategic interests lie in its immediate neighbourhood. But they have sought to find common ground in the seas that border them. This has resulted in two rounds of naval exercises called IBSAMAR. But officials feel IBSA has not really lived up to its potential and this summit provides an opportunity to carve out a path that draws on but also differs from the BRICS strategy.