Next week’s BRICS meeting is set to discuss options for creating new customs cooperation initiatives which could pave the way for integration between the BRICS, the Eurasian Economic Union and the overarching goals of One Belt–One Road.
Russia which is a core member of both organisations currently operates a customs union within the single market of the Eurasian Economic Union (EAEU), a bloc which includes Armenia, Belarus, Kyrgyzstan, Kazakhstan and Russia. Indonesia has recently been in talks to either join the EAEU or develop a customs deal with the bloc.
While the EAEU is comprised of states with historic ties to the Russian Empire and Soviet Union, the BRICS is bloc focused on economic, monetary, trade and political cooperation between the leading economies of the so-called multi-polar world. BRICS members Brazil, Russia, India, China and South Africa represent the major hubs across several continents.
According to Russian Presidential aid Yury Ushakov,
“Documents to be signed after the meeting of the business council include an action plan for the BRICS countries on trade and economic cooperation, an action plan for cooperation in innovation, a strategic program for customs cooperation and a memorandum of understanding between the BRICS business council and the New Development Bank”.
This would have the de-facto effect of combining the material and geo-political assets of the BRICS with those of the EAEU, to create a potentially continent wide single-market underpinned by Russia’s membership of both institutions.
In addition to existing members of the BRICS, this year’s summit which begins on Sunday in China will also include the leaders of Egypt, Mexico,Thailand, Guinea and Tajikistan thus opening the possibility for the expansion of a would-be BRICS customs union to the Arab world, South East Asia and addition parts of Central Asia and Africa.
The opportunities implicit in such a product include the following:
–Easing trade regulations across a multitude of inter-dependent growing as well as booming economies.
–Harmonising product regulations across a more cohesive single market
–Easing the ability of investment banks to take advantage of a wide range of opportunities for growth across the world
–Easing the transfer of labour and business representatives across countries which at present have a wide variety of differing visa regulations
–Creating wealth and jobs throughout markets with young and educated labour forces
Most importantly utilising the BRICS in tandem with the EAEU could help to harmonise the trading and customs laws across important areas along China’s One Belt–One Road, the land and maritime trading logistics project through which China seeks to modernise the material mechanisms of world trade across, East Asia, South Asia Asia, Eurasia, East Africa, The Middle East and into Europe.
In this sense the advantages of mutual participants in the BRICS, One Belt–One Road and the EAEU could effectively mean that each body works to utilise its inbuilt strengths to bolster the desired outcome of each which in summary aims for the ever closer cooperation between countries of the wider ‘global east’ and ‘global south’ on trade, monetary policy, freedom of movement and goods, investment, security and political cooperation in the name of the greater collective peace.
According to Shen Yi, deputy director of the Center for BRICS Studies and an associate professor at School of International Relations and Public Affairs, Fudan University in Shanghai,
“The confidence of BRICS nations evolved over the years. Previously, they were all very cautious, especially China. They tried to focus mostly on reshaping the global economic order, specifically regarding to trade and investment. But political and security related agenda topped the proposed topics under discussion at the upcoming summit. It shows the BRICS nations have set their sight on global governance, instead of being limited to economic issues”.
There are of course obstacles to such an ambitious initiatives beyond the obvious efforts it would take to create anything on such a wide global scope.
While Russia and China, the two most powerful members of the BRICS have become key allies, India and Vietnam are two countries which while maintaining good relations with Russia, continue to exercise scepticism towards projects involving China.
In this respect, India is the greater worry. From June until the final week of August, India was involved in an active border dispute with China in the Doklam/Donglang region at the tri-junction of China, India and Bhutan. India claimed that China was building a road on Bhutanese territory which threatened India’s security while China has maintained that India illegally and provocatively moved its troops onto sovereign Chinese territory.
The dispute was at least temporarily resolved when India withdrew its troops on the 28th of August. Since then, China has reasserted its sovereign claims over the region and its right to build roads on that sovereign territory.
In many ways, the Doklam/Donglang dispute was more of an effect than a cause of tensions between New Delhi and Beijing. Under the leadership of Narendra Modi, India has charted a geo-strategic course which seeks to model India as an economic alternative to, rather than a partner of China. As part of this new scheme, Modi has become increasingly close to the United States in the military sphere. India has recently purchased expensive American weapons in a clear move to demonstrate India’s independence from the rest of the Asian world which is increasingly dominated by Chinese economic might.
As I wrote previously in The Duran, Modi’s strategy is largely a dead end due to circumstances above and beyond what happens inside India’s border.
“Of all the countries that were members of the Non-Aligned Movement, Cuba and India were the least ‘non-aligned’. In reality, Cuba was a prominent ally of the Soviet Union throughout the Cold War. The importance owed more to Cuba’s geographical proximity to the United States than its military might. While Fidel Castro remained loyal to the USSR throughout the Cold War, he saw the Non-Aligned movement as a means of linking Cuba with many countries engaged in post-colonial struggle throughout Africa and parts of Asia.
India’s relationship with both the non-aligned movement and the Soviet Union came about for inverse reasons. Unlike Cuba, India was never a Communist country nor was India ever a formal member of any Soviet led grouping world-wide. That being said, India was among the Soviet Unions most important Asian allies along with Vietnam.India’s first three decades of post-British independence witnessed a political balancing act between secular minded agrarian socialist policies balanced off by Hindu politics. During Jawaharlal Nehru’s period as Prime Minister (1947-1964), the course tended towards socialism while still informed by the Hindu traditions of the majority of India’s population.
In terms of Foreign Affairs, India was a firmly ally of the Soviet Union and relied of Soviet support in winning the 1971 war with Pakistan. Without Soviet support, India may well have lost the war.
Although India remained a stalwart of the Non-Aligned movement, New Delhi’s loyalties were clear and the United States realised this. Richard Nixon privately disparaged Indira Gandhi, once saying that she “suckered us”.
While Cuba was closed to American during the Cold War and indeed beyond, India was always open, but the relationship was largely a one way street. India’s loyalties were firmly with the USSR. Furthermore, while Cuba’s alliance with the USSR helped protect Cuba from NATO led ‘regime change’, India’s status as a Non-Aligned Soviet ally actually helped India to win wars and secure her independence during an era when many former British colonies continued to be molested by their former overlord; Egypt, North Yemen and Kenya being some famous examples.
Today’s post-cold war environment sees the Shanghai Cooperation Organisation (SCO) uniting many of the leading countries of the two Communist blocs as well as the non-aligned movement. In addition to China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, this year both India and Pakistan joined the SCO . Iran will likely join in the very near future.
The SCO goes a long way in streamlining a partnership between old adversaries, though at times it seems that India’s current Prime Minister Narendra Modi is still trying to use the old Non-Aligned card to play various sides against others, even when the formal existence of such sides no longer exists.
Modi’s recent visit to Israel is a prime example of this. Realistically, India offers Israel no more or less than it would offer any nation in the wider Middle East, Africa or Asia. Likewise Israel cannot offer India anything that its old ally Russia and new Shanghai Cooperation Organisation partner China cannot. In this sense Israel offers far less. Even so, India and Israel could have agreed to various bilateral trade agreements without the song and dance of Modi’s generally gushing and overtly politicised visit to Israel. Whether he is aware of this or not, Modi’s visit has been used by Israel’s well-oiled propaganda machine to demonstrate that Israel’s friends are not exclusively in North America, Europe and some parts of the so-called ‘White British Commonwealth’.
What the visit does accomplish is ruining a great deal of India’s prestige in the Arab world and even the wider Asian Muslim world. India’s priority should be solving its own tensions with Pakistan which would also mean working to insure the rights of Indian Muslims at the same time.
Forgoing India’s traditionally neutral position in the Israel-Palestine conflict at a time when India should be working on building bridges of cooperation and trust with Islamabad is not only a bad strategic move but it is one that trades an opportunity to reconcile with China and Pakistan simultaneously via the Shanghai Cooperation Organisation for little in return. India if anything could have been called on to oversee a future Israel-Palestine peace deal but under Narendra Modi whose visceral dislike of Islam is now infamous, this is now all but impossible.
At a time when Pakistan is becoming ever more tired of its relationship with the US which earns Pakistan little in material terms and even less in terms of dignity and with Russia and China leading by example as two former Cold War adversaries who now form the 21st century’s most important geo-political alliance, India under Modi is playing side-games when it ought to focus on the bigger picture which means reconciliation with both China and Pakistan for the long-term economic prosperity of all Indian people.
Modi seems to be a man guided by a lust for outsmarting the world. One often wonders if he is really only outsmarting himself. His anti-Muslim rhetoric which is now having violent consequences on the streets of India, combined by his public displays of political affection for both the United States and Israel is not in the interests of the Indian people, not even the Hindutva base he represents and riles up.
India’s future is with a combination of long time friends (Russia) and former adversaries (China and Pakistan). Her future never was in the west or its allies like Israel, although nothing is precluding India from trading with such countries minus the geo-political overtones that Modi tends to revel in and which countries like the US and Israel are all too willing and able to exploit. Nixon talked about being “suckered” by Indira Gandhi. By extrapolation, can we now say that Narendra Modi is suckering himself?”
In spite of these economic and contemporary geo-political realities, there is still little sign of movement towards cooperation on the Indian side. The forthcoming BRICS summit will be an important gauge to determine what path or paths India might take in respect of China and her allies.
Turning to South East Asia, while the traditional American ‘ally’ of Philippines is turning increasingly towards friendship and cooperation with both China and Russia, Vietnam remains increasingly distant from China on a geo-political level, even though at a level of trade, Beijing is Hanoi’s primary trading partner. With neither Philippines nor Vietnam are in the BRICS, both countries are crucial to the economic success of South East Asia that the BRICS is increasingly promoting.
With Turkey signalling a willingness to open up new trade ventures with Vietnam however, there is a possibility that just as Turkey is moving ever closer to China and Russia at a rapid rate, so too could Vietnam use its historically strong relationship with Moscow to ease tensions in China which would prove economically beneficial for the South East Asian nation.
As I wrote previously in The Duran,
“While Vietnam trades with China for clearly pragmatic reasons, in working with countries that already have good or growing economic and political relations with China, Vietnam may ultimately be convinced that as a thriving, young Asian economy, its destiny will lie increasingly with the countries that are either intrinsic to the wider Asian economy and other countries in Eurasia like Turkey whose young workforce represents and economy that is increasingly Asian rather than European in outlook and overall production capacity.
The other key Eurasian power is Russia. The Soviet Union’s closest Asian allies during the Cold War were India in South Asia and Vietnam in South East Asia. While under the Modi Premiership, India is pivoting itself into a corner by turning west, Vietnam remains close to Moscow as it always has been since achieving independence.
What has changed is that where Moscow once saw Hanoi as a means of containing China, now Russia and China constitute the world’s most strong and important alliance. With the weight of the Russian superpower combined with the magnetism of Turkey pulling Vietnam back to a uniformly Asian and Eurasian way of thinking, this could be the slow/gradual beginning of a much awaited rapprochement between Hanoi and Beijing.
China realised as early as the 2000s, if not earlier, that the US market will generally be a friendly place for Asian goods because the US needs them and apart from a fully-fledged trade war or a military conflict, there is little that any US leader can do to change this. This is something Donald Trump may be finding out the hard way. Luckily for Vietnam, Hanoi can still come to this realisation the easy way.
While sceptics will say that such rapprochement is next to impossible, one must consider how far Rodrigo Duterte has shifted the geo-political/geo-strategic alignment of Philippines in just over one short year. This has been accomplished in a country that is manifestly more difficult to govern than Vietnam due to a more confrontational political system, higher levels of corruption which stem from a more American style of governance and the ongoing/escalating conflict in Mindanao.
Turkey and Philippines are two examples of countries that have broadly changed their geo-political alignments in a very short time. Turkey and Philippines have both done so under circumstances which are far more confrontational than anything comparable in domestic Vietnamese politics. India too has altered its stance in this way, albeit in the other direction.
Thus, when all is said and done, the economic and pragmatic lessons of Asia and Eurasia’s economies means that anything is indeed possible, even when history might dictate the contrary”.
One solution to both of these potential problems lies in the final international body that will likely work alongside the BRICS, EAEU and the One Belt–One Road initiative. This is the Shanghai Cooperation Organisation (SCO), a group which focuses primarily on enhanced security cooperation between its members.
SCO members include: China, Russia, Kyrgyzstan, Kazakhstan, Tajikistan, Uzbekistan and India and Pakistan who joined this year.
Thus far, India has not taken advantage of the mechanisms present in the SCO to resolve lingering disputes with both China and Pakistan. Ultimately this will be to India’s disadvantage if this mechanism is not ultimately utilised.
In this sense, while many who seek to embellish disagreements between BRICS members tend to focus on foreign policy issues which transpire between BRICS members, in reality the summit is primarily concerned with economic, monetary and commerce issues. The SCO by contrast is the organisation in the wider global east which is equipped to deal with and resolve disputes in the realm of foreign affairs.
The BRICS summit in Xiamen presents the world with a great deal of opportunities in the medium and long term as well as challenges in the short term. The effects of each will likely come to the fore this week.