Quoted in Times of India, 1 April, 2012.

http://articles.timesofindia.indiatimes.com/2012-04-01/special-report/31270010_1_brics-robert-zoellick-world-bank/2

Power of 5

Far from Delhi's decked-up roundabouts and sanitised hotels, Robert Zoellick was aboard a boat on Wednesday, crossing the river Bhitarkanika on his way to a village in Orissa. After greeting the villagers with folded hands, the World Bank president sat down to talk to a global news agency. A few stock questions later, the Bank chief turned his attention to the proposed BRICS bank. "It's a complicated venture which will have a hard time getting off the ground and match the expertise of the World Bank," Zoellick said.

It was hard to miss the symbolism of Zoellick's foray into a dark corner of India and raise doubts about a new development bank just one day before the leaders of Brazil, Russia, India, China and South Africa (BRICS) met in the Capital to thrash out the nitty-gritty of the Delhi Declaration. It was clear that the Bank didn't want a new global rival that couldn't be controlled from Washington.

But by Thursday evening, BRICS leaders had proposed to trade among themselves in their local currencies, made significant progress on the setting up of the new development bank, expressed their concern at the slow pace of quota and governance reforms in IMF, and decided to abide by UN sanctions and not the unilateral ones imposed by the US and European countries on Iran and Syria. "We wish to see these countries living in peace and regain stability and prosperity as respected members of the global community," the declaration said.

This was a giant leap forward, much more than what skeptics like Zoellick had expected. In the days leading to the summit, the air was thick with negativity. "What do they talk at these summits? It's just a talk shop and a photo op," an American diplomat had said, making no effort to hide biting sarcasm. The same day, an op-ed piece in the New York Times argued that the focus of the new bank was misplaced. "It is the fundamental incompatibility of the BRICS nations , not their lack of organisation, which prevents this collection of emerging economies from acting as a meaningful force on the world stage," the op-ed said. In this western worldview, BRICS is an idea whose time hasn't come.

By Thursday evening, however, the mood at the summit was upbeat, with ministers, diplomats, businessmen and journalists smelling a change in the air. "BRICS is not an idea. It's already a reality. The balance of the existing global order is tipping," says Jackson Schneider, vice-president of Embraer, the Brazilian aviation giant. "If BRICS has no force, why is the NYT wasting so much ink and time on us?"

The problem with the view from New York is that it ignores ground reality. Today, the BRICS countries account for 25% of global GDP based on the purchasing power parity of national currencies; 30% of land area and 45% of the world's population. The bloc's contribution to global economic growth has now reached almost 50%, making this group the principal driver of global economic development. "Last year, trade between the BRICS countries stood at around $230 billion and we are targeting $500 billion by 2015. We all are important countries in our respective regions and we want the world architecture to be more inclusive," says MariaReis, the top Brazilian diplomat for BRICS affairs, also known as the 'BRICS Sherpa'. "We are not against anyone but we want changes in terms of transparency in global affairs."

Signs of change are already there. On the morning of the meeting, the Syrian prime minister sent a letter to his Indian counterpart Manmohan Singh about the situation in his country and his government's commitment to the peace process. By evening, the BRICS leaders had taken a collective and clear stand: no foreign interference in Syria. "By making clear that issues likeSyria, Iran and Palestine-Israel dispute be resolved within the UN framework, the BRICS leaders have moved from plain rhetoric to specific areas, and have also given a message to those countries which tend to act unilaterally outside the UN framework. It's a huge development," says Vivan Sharan, an associate fellow at the Observer Research Foundation which hosted the BRICS academic forum this month in preparation for the summit.

Experts like Sharan see the Delhi summit as a success in terms of the changing global order. "They have demanded specific reforms in the IMF-World bank structure. Now Exim banks will be able to give loans to each other in local currency. This is deepening of financial integration. Even on the issue of a development bank, it's a win-win situation for everyone. This summit has cleared a lot of noise and confusion," says the ORF expert. "I don't see any major obstacle in the creation of the BRICS bank."

The bank, according to participants in the summit, is now a question of when and not if. This can fundamentally change the existing world order. "According to the West, in the global village, the Chinese manufacture , the Indians provide services, the Brazilians do farming, the Russians supply oil, and we are a source of cheap labour. But, not anymore," says a South African diplomat. "Because of our history, the entire African continent is looking at the BRICS bank."

If BRICS has become a force to reckon with, it's because of the hard work done by a lot of people. Contrary to the perception that BRICS leaders meet once a year to click some snaps together, the members have already put in place a number of mechanisms to deepen their cooperation. In the past couple of years, there have been a number of meetings between BRICS ministers for trade, other ministers for agriculture, health, and a contact group on economic and trade issues. "The BRICS countries today comprise new growth poles in a multipolar world," says Sudhir Vyas, secretary (economic relations), in the ministry of external affairs and the Indian sherpa for the summit.

Though the BRICS countries have been meeting and talking for the past eight years, they realised their power only in 2008, when the western economies began to wobble. "During the financial crisis, the BRICS countries played a vital role as drivers of growth that helped the global economy. They are not a threat to global growth, but an opportunity for global growth," says Vyas. Despite suspicions in the western capitals, no one in BRICS is seeking confrontation . "We need very much the euro zone to recover. No one wants this crisis to aggravate," says Maria Reis of Brazil.

Of course, there are challenges ahead, even misgivings . But everyone is willing to give BRICS a chance. Li Zhongmin, an expert on the grouping at the Chinese Academy of Social Sciences, says it was essential for their future for the members to "finance each other's infrastructure projects, internationalise their currencies , provide trade credit to each other, ease visa norms and encourage investment in each other's country."

All this was achieved at BRICS 2012. Now the next step should be the creation of an institution -a new global bank -that holds the grouping together. "Foremost amongst the reasons for the creation of the institution is the need for BRICS to assume pole position in global financial governance,'' says Sharan of ORF.

On Thursday evening, the delegates were confident that the bank will be a reality sooner than later. It could be real good news for India, which was the first country to propose this bank.

On Friday, Zoellick landed in Delhi, met ministers and businessmen and told them how the World Bank "can help India meet the challenges ahead."

Zoellick is going to retire soon. Is he trying extra hard to sell an idea whose time may be up?