Stresses on the BRICS’ Club Culture at the Xiamen Summit

The BRICS have long defied the expectations from its detractors that it is an artificial and unsustainable construct. Moving beyond the original identification of specific countries (Brazil, Russia, India and China) deemed to possess a similar set of developmental characteristics by Goldman Sachs, BRICS took on an institutional format. With annual summits since 2009 BRICS has taken on a sustained personality. In terms of membership the profile of BRICS has been extended through the inclusion of South Africa at the 2011 Sanya summit. Moreover, at odds with the view of scholars such as Joseph Nye that it lacked “mortar,” the BRICS grouping has built up the New Development Bank (NDB) as an innovative instrument.

Yet, with regard to the forthcoming September 3-5 2017 Xiamen summit, a different type of stress has been added. Through their collective action, the BRICs countries have worked hard to present themselves as a cohesive, likeminded group. This effort, however, belies sharp differences in the political, economic, and policy approaches of the member states. Above all, the Xiamen summit has been caught up in an intensifying geo-political contest between India and China punctuated by a dramatic escalations of tensions around the Doklam standoff, with armed forces of the two countries facing off in the Sikkim sector of the China-India boundary

Rivalries over borders, resources, and status between these key BRICS members have long persisted. Nonetheless, along with other sensitive issues such as reform of the UN Security Council (UNSC), they have been managed through a distinctive club culture. In part the ability to play down the differences was facilitated by a sense of common historical grievance and shared declaratory claims to represent the interests of all developing countries. Above all, the BRICS share a rhetorical commitment to the defense of the Westphalian model of state sovereignty and nonintervention. They profess a shared vision of inclusive global growth, combined with development policy autonomy and the rapid socio-economic transformation of their own nations.

But it must be appreciated that the club culture was strengthened by the informal structure of the BRICS. Unlike formal institutions such as the United Nations, the International Financial Institutions, and the World Trade Organization, there is no attempt to negotiate, never mind impose, binding rules upon member states. The wording of BRICS communiqués subordinates national differences to core commonalities of perspective, in that the areas of converging interests are emphasized, and points of tension and disagreement between the BRICS countries are minimized.

The highest level of attention in communiqués has been devoted to the cluster of issues where BRICS could express their traditional sense of grievance at being marginalized within the global institutional architecture and their shared sense of criticism about the West’s poor management of the global economy. Global financial issues receive a large amount of coverage in the summit declarations, above expressions of solidarity with the rest of the global South, environmental/climate change issues, and promotion of the G20 and trade. By way of contrast areas where BRICS was most divided, such as the reform of the UNSC, received a minimal level of coverage in the context of BRICS summits.

The internal dynamics within the BRICS also encouraged the club culture. Over a range of statistical criteria China dominates BRICS. Nonetheless, China kept in the background at the early stages of the formation of the group, letting Russia and Brazil move out ahead as the visible motors of the BRICS.

This mode of operation was replicated up to a point in the creation of the NDB. Significantly it was India and not China that took the lead in exploring alternative strategies for development financing in the aftermath of the 2008 global financial crisis. Prime Minister Manmohan Singh built on his own extensive background as chief economic adviser, reserve bank governor, and head of the Planning Commission, as well as his role as Secretary General of the South Commission, to champion such efforts. At the Seoul G20 Summit in November 2010, notably, Singh argued for the use of a different sort of tool to foster infrastructure development. Faced with the challenge of massive imbalances, he proposed a new institutional instrument for recycling surplus savings into investment.

Given this context, it was not surprising that India made the establishment of a NDB the pivotal agenda item at the 2012 BRICS summit it hosted in New Delhi. China did not block the establishment of the NDB, but its initial ambivalent reaction to India’s proposal slowed the process of negotiation and institutional creation. Throughout the protracted negotiations, Chinese commentators questioned whether the principle of equality (as underscored by a commitment to equal financial contributions of initial subscribed capital) compromised institutional performance.

To its credit, the club culture of BRICS – with the initiative symbolizing an assertion of political sovereignty of the five members – enabled the members to remain cohesive even under stress. Yet maintaining organizational cohesion was predicated on a somewhat awkward equipoise on the major issue under debate. In particular it took some forms of compensation (including the consolidation of the principle of equality and receiving the first term of the presidency of the NDB) for India to go along with China’s insistence that it secure the location of the bank in Shanghai.

Still, given the rise of geo-political tensions, it is unclear that a similar sort of balancing act can adequately preserve the club culture of the BRICS in the context of the forthcoming Xiamen summit. Whereas the culture could defuse an issue such as the instrumental mechanics of the NDB by trade-offs (and a refusal to play up the intensity of the issue in public) the spillover of bigger diplomatic rifts has made the stress test far more difficult.

Again, it would be wrong to compartmentalize these rifts. After all the organizational relationship between India and China must be viewed as highly variegated. On the one hand, India declined to send a delegation to Beijing’s high profile Belt and Road Initiative summit. On the other hand, Prime Minister Narendra Modi accepted (with strong Russian backing) the invitation that India become a full member of the Shanghai Cooperation Organization.

As rehearsed above a great strength of the BRICS has been to manage internal differences, whether on UNSC reform or the location and contributions with respect to the NDB. At the 2016 BRICS Goa summit, nonetheless, internal geo-political differences came out into the open, most notably through Prime Minister Modi’s call for the BRICS to stand together against the “mothership of terrorism.”

This barely concealed reference to Pakistan undercut the BRICS club culture in a number of ways. For one thing, it prioritized declaratory statements at the expense of quiet diplomacy behind closed doors. And it not only forced China to choose between its friendship with Pakistan and support for the host of the Goa summit, it put a similar sort of pressure on Russia’s engagement on this issue.

Instead of smoothing over the legacy of the 2016 summit, the escalation of tensions around the Doklam standoff – stoked by some media outlets in both countries – brings old border disputes (and especially memories of the border war in 1962) back to the fore.

Two scenarios at the Xiamen summit could raise the stakes further for the BRICS. One is if China as summit host pushes too assertively the notion of a BRICS plus, as suggested by Chinese Foreign Minister Wang Yi in March 2017. Such an approach is widely viewed in India as a vehicle of adding to the leverage of China at the expense of India especially if it targets Beijing-friendly countries such as Pakistan and Sri Lanka.

The other is if Prime Minister Modi aims to pressure on China on Doklam by a decision not to attend the summit. While Xiamen would go ahead even with a no-show by Prime Minister Modi (with the attendance of the other leaders and an array of state officials), such a highly visible gesture would inflict severe damage on the image and delivery of the BRICS.

Alternatively, in keeping with the Xiamen theme of “BRICS: Stronger Partnership for a Brighter Future,” the BRICS’ mode of operation in all likelihood will prove to have been built up so successfully to ensure resilience. Although facing a far different and more severe geo-political stress test than has come to the fore over the past decade, the joint membership of India and China in the BRICS provides a crucial collective institutional setting and schedule to facilitate downplaying not intensifying tensions. The stakes attached to hanging together are far greater than inflicting severe damage on the the BRICS’ embedded club culture