Column : Cementing the BRICS symbolism

Feb 06 2013, 01:25 IST
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SummaryBRICS central banks can diversify their reserves in the emerging market government bonds.

The BRICS countries’ meeting in Durban early next month would further flesh out some ideas that had become part of their resolution at the New Delhi Summit in March 2012.

Some of the big ideas, such as setting up of a BRICS bank to create a long-term fund base to facilitate social and infrastructure development projects in emerging economies, will be discussed in greater detail. Of course, sceptics in the West believe these five countries—Brazil, Russia, India, China and South Africa—suffer from too much ego associated with “rising powers”, and will not be able to agree on how to structure the new development bank, its shareholding pattern, location of the headquarters and so on.

For instance, western analysts are quite convinced of the intense rivalry between China and India, and cite this as one reason why BRICS will not be able to evolve robust institutions. Well, the answer to this could possibly be to study the unprecedented rivalries among the rising European powers such as Germany, the UK and France in the late 19th and early 20th centuries. That certainly did not prevent them from moving towards a common European institutional mechanism in the decades following after the War.

Anyway, the concept of BRICS is a nascent one and will take its time to mature, and it is indeed meaningless to prejudge its outcome so early. At the moment, it must be taken seriously as a reflection of the aspiration of emerging economies to evolve their own institutions of governance, which can even work as partners with the existing multilateral institutions dominated by the western powers.

In this regard, the BRICS bank is being envisaged as an institution that will supplement the efforts of existing multilateral funding agencies like the World Bank. While this will take some time, the BRICS economies can immediately explore some powerful, even if symbolic, ideas to tell the world about their long-term commitment to the project of imparting stability and security to a rapidly changing world order.

The power of symbolism is often used very effectively in diplomacy and it can produce a disproportionately big impact if timed correctly. Perhaps the time has come for the big emerging economies to resort to such symbolism if only to reinforce their long-term commitment to the BRICS project.

As a symbolic beginning, the central banks of BRICS economies can agree to subscribe to safe, risk-free bonds issued by the other BRICS governments. For instance

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