How US policies are making BRICS Stronger

If anything helps the steady growth and economic integration within the BRICS grouping, it is the current duplicitous policies of the US and its loyal EU countries towards emergent Asian and African countries.

Until recently, India, an important if not dominant member of the BRICS, did not react enthusiastically to a Russian/Chinese demand to reduce its dealings in US dollars, the universally accepted currency, in its international trade and business.

However, the US decision to re-impose economic sanctions against Iran and its unilateral withdrawal from the Iran Nuclear deal (JCPAC) agreement is forcing an Indian to rethink whether to ditch the dollar.

Delhi is currently considering a revival of the rupee-rial agreement that had once been used in its trade with Tehran. That was when the Obama administration first slapped economic sanctions against Iran.

Pressure is now mounting in India to align with Russia and China on the matter, thanks entirely to US President Donald Trump and his controversial brand of statecraft. Only by a circuitous method avoiding dollar transaction bilaterally, the two Asian countries can salvage their trade from being impacted by the fresh sanctions.

Stated simply, what has happened between the US and India in recent years is that the richer country has simply shut the door on India’s face, a process that has peaked as the America-first policy comes into force. This despite the fact that most of the Indo-US bilateral deals, whether under Obama or Trump, have enabled the US to walk away with major benefits including domestic job creation at India’s expense.

Still India persisted with a pro-West foreign policy within an apparently unipolar world with the avowed objective of securing the latest technology for its growing economy. Also factored in was a strategic move to win the trust of the West “in standing up to the emerging new giant, China in Asia.”

It is difficult to compute how much of advanced technology has come India’s way from the US and in exactly what sector. However, there has been no dearth of moral support and encouragement from the US-EU blocs in the matter of India squaring up against China from Doklam to the South China Sea – but again, and this is most important at the verbal level.

The US refuses to sell its latest F35 fighter jets to India, while Israel gets them. It warns India not to buy the dreaded SS 400 anti-missile defense system from Russia. And now, Trump has also increased the US tariff on a number of products from India to make US-based industries more competitive.

All this happens even as Trump and Modi hug each other publicly whenever they meet for the sake of photo ops. One also recalls how Modi had boasted that he used to call Obama by his first name. As a Kolkata-based analyst points out: “When the US describes India as its strategic partner in Asia, one wonders whether words and meanings have parted company.”

The question arises, what is it about the US that attracts Indian policy-makers and leaders, even when they know their country has been and will always be, short-changed on most matters.

One analyst, ex-diplomat MK Bhadrakumar, put the matter succinctly. India’s Western-educated, English-speaking elite who really decide policy always felt more at home in locations like London, Washington, Oxford ,Cambridge, Harvard — not for them the deep intricacies and subtleties of the Russian or Chinese history or cultures, the epic struggles in both countries to develop and grow stronger, challenging the might of the West.

Bhadrakumar points out that when leaders like Vladimir Putin articulated their objective to reduce their dependence on the use of US dollar in future transactions at BRICS gatherings, Prime Minister Narendra Modi always remained silent.

This, despite the common knowledge in India that but for the steadfast support of the old USSR in the UN Security Council on the Kashmir question, India might have found it extremely difficult to hold off the twin challenge posed by Pakistan and the foreign-backed Islamic mercenaries fighting for their independence. Even the highly respected BJP leader Atal Bihari Vajpayee, no admirer of the USSR otherwise, admitted this during a press conference in Kolkata some years ago.

However, India’s enduring obsession with the much richer, glamourous West need not be explained entirely as a continuation of its post-colonial political narrative. South Bloc-based foreign affairs experts admit that with 25% of the world’s GDP (the percentage is growing very fast thanks to China’s progress) and 40% of the world’s population, the five member BRICS grouping was certainly engaging the attention of a worried, divided West Bloc. As Putin has pointed out in PPP terms, the BRICS members and their immediate neighbours certainly are not very far behind the levels of affluence enjoyed in the EU the US.

It needs stressing that these figures are not up to date. However, with at least 12 more countries including Iran, Turkey, and South Korea keen to join, the present situation is far more positive for BRICS.

However, India’ s apparent ennui to engage wholeheartedly with BRICS endeavours could also be explained by the trade figures. At $25/30 billion annually, BRICS accounts for only 10/15% of India’s total export earnings. Massive trade deficits notwithstanding, the West remains India’s dominating trade and business destination by a long chalk.

For some time now, China and Russia, the dominant countries that drive the BRICS grouping, have been trying to replace/restrict the use of the US dollar in their financial dealings worldwide. For China, it ties in very well with its long term objective of displacing the US as the world’s leading economy. For Russia, less dependence on the US dollar would help it better to do business and trade with non-Western countries and beat the West-imposed sanctions.

Understandably, during the last BRICS summit, official pronouncements stressed the growing need for evolving new ways of doing trade and business among countries, seeking a reduction in the role played by the World Bank, the IMF, and the ADB. Towards this end, under Chinese leadership, the BRICS members have set up the new AIIB, as a small but significant counterweight to the World Bank.

To ramp up economic co-operation/integration among the expanding BRICS grouping, it has been suggested that members resort to greater use of their respective national currencies, circumventing the primacy of the US dollar. China currently uses the yuan instead of the US dollar with the local currencies with 16 countries now. India is also looking to revive if necessary its old rupee-rouble payment arrangement with Russia, to enable it to purchase in SS400 defense system.

Given the small size of the BRICS economies relative to overall world trade figures, it is not as though US/EU policy-makers will lose much sleep over the economic progress of Asian/African countries. Posing a counter to the US dollar in international trade too is easier said than done.

On the other hand, leaders and emerging countries like India and Bangladesh should appreciate that the concept of a unipolar world is already passé, and the times are a-changing.

 

 

 

 

 

Source:- Dhaka Tribune



from Indian Defence Update https://ift.tt/2MuGJn9
via IFTTT
How US policies are making BRICS Stronger How US policies are making BRICS Stronger Reviewed by Defense Alert on 00:33:00 Rating: 5

1 comment:

  1. eToro is the ultimate forex trading platform for newbie and full-time traders.

    ReplyDelete

Defense Alert. Powered by Blogger.