BRICS and SCO: Russia’s Big Summit
A week before leaders from Brazil, Russia, India, China and South Africa are set to gather for the 7th BRICS Summit in Ufa, the New Development Bank (NDB), often called "BRICS Bank", dominates pre-summit discussions. Rightly so: The bank is the first institutional manifestation of the grouping long derided for being a mere talking shop. Setting up a joint development bank (and, to a lesser degree, a contingency reserve agreement) is a long-term commitment and will establish ties between governments on many different levels. Cooperation in the area of development finance is likely to increase the so-called "spillover effect" -- bureaucrats will gain greater experience in intra-BRICS cooperation and establish contacts in other BRICS countries, and may seek to make use of those ties once they have moved to another area of government. A similar effect occurred after 2009, when intra-BRICS cooperation expanded from the ministries of finance and central banks to other areas, such as health, education, national security, academia and statistics.
Yet what is perhaps even more interesting is to observe the remarkable number of smaller initiatives that have been articulated or implemented over the past weeks. India's Prime Minister proposed setting up a BRICS University, a BRICS Young Scientists’ Forum and a series of BRICS Language Schools. In addition, he has been the major proponent of a visa-waiver agreement between BRICS countries, though initially limited to business travelers (See also: The case for a BRICS visa waiver agreement). Last month, intra-BRICS parliamentary cooperation was enhanced after a high-level meeting in Moscow. In the past weeks, the Russian government organized the BRICS Academic Forum and the BRICS Civics Forum. These are laudable initiatives, even though both events suffer from a highly state-centric approach, thus excluding topics such as human rights and political rights. Particularly ahead of the yearly summits, ideas are launched that range from innovative, nitty-gritty to highly unusual, primarily in the Russian and Indian media.
Examples include the creation of a framework to regulate e-commerce, a BRICS-led alternative to SWIFT, a Belgium-based and globally accepted secure messaging system that facilitates cross-border financial transactions. Consistently discussed in the Russian media is the rather bizarre Russian proposal to invite Greece to join the New Development Bank, a move most likely intended as a cheap bluff to scare European policy makers. As argued before, Brazilian, Chinese, South African and Indian policy makers will rightly seek to avoid any such controversial moves that serve Vladimir Putin's interests, but provide no benefits to the other members. After all, Brazil is in the midst of a broad effort to restore ties with the United States after Rousseff's visit to Washington this week.
For Brazil, the meeting is a rare opportunity to engage with and learn more about the Shanghai Cooperation Organization (SCO), whose member countries will also gather in Ufa next week. In the same way, Russia jointly organized the BRICs Summit and the SCO Summit in Yekaterinburg in 2009. The progress both institutions have made since then is remarkable. The Shanghai Cooperation Organization is in the midst of a broad transformation as it has started dealing with economic issues, including the potential creation of an SCO development bank. All these topics will play a decisive role in the geopolitical future of Eurasia, a region that seems to regain its importance as Russia turns its back on the West, and as China is articulating its strategy to strengthen its presence in Central Asia and beyond. Provided that India and Pakistan will become member countries, all of the key players in China’s One Belt, One Road (OBOR) strategy will be part of the organization, making it an ideal negotiating platform for Beijing’s regional investment plans. Brazil's economic interests in OBOR can hardly be overstated, yet knowledge of the regional economic and political dynamics that shape it are limited among Brazilian policy makers and society. In this context, Brazil's decision to become the only founding member of the Chinese-led Asian Infrastructure Investment Bank (AIIB) from the Western Hemisphere is likely to generate tangible benefits in the long term.