People's Democracy

IBSA SUMMIT

Good Beginning

K Krishnan

IBSA STANDS for India, Brazil and South Africa. It is a partnership of three large countries, across continents, with shared interests to protect themselves from the predatory nature of world trade, if only rich countries are allowed to come together with each other and run the agenda.

It is not a new thought. The three countries have been aligned and known they have shared interests even before the World Trade Organisation came into existence. But formally, according to Brazil’s President Luiz Inacio da Silva Lula, it was Thabo Mbeki’s idea that they all come together and stand as one to take on the united might of EU and the US on the world stage. The idea, according to newspaper reports, came to Mbeki when he was at President Lula’s victory rally shortly after Lula (of the Workers’ Party) became President in 2003. The first leftist President in Brazil – dominated by military dictatorships for the past few decades – in more than forty years. The Group of 20, or G-20 has also come into being recently at the initiative of the three IBSA countries to articulate as a group, the interests of developing countries pushing for the resumption of the stalled Doha dialogue at the WTO, hoping to swing things in favour of developing countries. (meeting of the G-20 held just before the IBSA Summit in Rio de Janeiro, on September 9 and 10, has pledged itself to ending the distortions and inequities currently there in the world trading system.)

Even in terms of United Nations reforms, where India is keen to secure a seat in the Security Council as a permanent member with veto rights, Brazil and India are partners, as a part of G-4. 

Economically speaking, all three countries have some shared areas of interests and activities; agriculture, as producers of raw materials, underdevelopment, poor populations, jumping on late on the technology bandwagon, a need for fuel to support the rates of growth they each aspire towards, an anxiety to ‘catch up’ with the rest of the world, trying to find new and common areas of strength. More than that, all three are large and are big players on their respective continents. What makes this partnership exciting is that the three have not been thrown together, but have chosen each other to form an alliance. 

As the Joint Declaration signed by the three countries last week describes, the “heads of state and governments had already met under the IBSA format in previous opportunities, such as the meetings in 2003 and 2005, in New York. Ministerial Meetings of the Trilateral Commission were held in New Delhi in 2004, Capetown in 2005and in Rio de Janeiro in 2006. Trilateral Working Groups were created in the areas of Agriculture, Culture, Defense, Education, Energy, Health, Information Society, Trade and Investment, Social Issues, Science and Technology, Tourism and Transportation.”

Yet, while it may look like a natural alliance in terms of shared interests, activities and a shared past as far as fighting the first world goes, there are problems in this as well. The first is the problem of being far apart, on separate continents, the links are not very good. The second, that often, commonalities can become competitive, on a global scale. And all three governments, while having a strong left of centre thrust, origin or like in the case of the UPA being supported by the left, are actually keen to be with the US etc as well, and there are strong lobbies operating in all countries to make sure that the deal between the three countries does not get so strong, that connections with the US/EU get overridden. All three countries also have a strong neo-liberal thrust, something which makes it easier to think of the first world as allies, and not so much the third world poor. The middle-class and the ruling elite in these respective countries will exert a lot of pressure to not let alliances within the have-not nations get stronger. To resist those lobbies may be difficult for these governments. 

At the one-day Summit in the Brazillian capital, Brasilia, the three nations signed 7 MOUs and 2 Agreements. The two Agreements are, first on Agriculture (technology transfer and even mergers of natural resources, Brazil for instance has agreed to allow its land to be bought and used by Indians – Brazil has vast amounts of excess arable land as it has a low population, and is keen to leverage that) and the other on Merchant, Marine and Maritime Transport. The Maritime Agreement would help to resolve the problems of connectivity between all three countries. A Taskforce on bio-fuels would be set up, that would see what alternatives each of the countries can offer the others with looking for options other than oil. While Brazil has achieved self-sufficiency in fuel, thanks to innovating and extensive use of bio-fuel, Ethanol - derived from sugarcane – India still imports most of its fuel requirements and spends considerable foreign exchange in doing that. It is hoped that the task force would help all three nations in diversifying their source of fuel.

Each of the three countries had carried large business delegations with themselves, and the effort was to make sure that private investors too see value in investing in other developing and not just hanker after a place in the US/EU markets.

For Brazil, a large country and now said to be recovering from the phase of instability that the indebtedness had introduced, this was a Summit held only a few weeks away from the general election there scheduled for October 1, this was an opportunity to reiterate itself as a country that was thinking big and one that did not simply end its search for partners in Washington. President Lula is the frontrunner in this election, and despite being in the line of fire by big industry for not being able to keep interest rates low (at 11 per cent, they are among the highest in the world, and they inhibit investment) and not raising growth rates enough (only just about 2.6 per cent per annum), he has been credited with having secured a 25 per cent raise in the official minimum wage, as well as creating conditions where the level of economic inequality is at its lowest ever in 30 years, something which even the Economist magazine acknowledges (in its article on Lula and Brazil, March 4).