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The failure of the WTO talks in in Cancún last year was seen as a major setback for the developing countries since they failed in
their efforts to get a better deal from the developed nations as far as the international economy was concerned. That failure, however, forced developing countries – at least some of them – to greater collaboration among themselves. The hope is that such collaborations will lead to the formation of blocs, which would have sufficient clout in future trade negotiations.
While some of these negotiating blocs are essentially regional, others are between more advanced – and economically more powerful – of the developing countries. One such is IBSA comprising India, Brazil and South Africa. Such groups are increasingly being recognised as those sharing not only common social and economic challenges, but also common goals in international trade negotiations. And, like other nations, these nations are realising that the chances of achieving these goals increases if they act together. The trilateral meeting between Foreign Ministers of India, Brazil and South Africa in Brasilia not too long ago, set the tone for this global initiative, which will eventually include Russia and China to make it G-5. As Brazil’s President Luiz Inacio Lula da Silva said, India, South Africa and Brazil plus China and Russia must band together to get the attention of G-8 nations preoccupied by the US-led war on terror and global economic weakness.
The three countries, which form the IBSA Dialogue, were all part of the G20 Plus developing countries group. The success of the developing countries in Cancun provided the impetus to another item: representation in the Security Council.
It would be worthwhile to consider the fact that a successful foreign policy of a resurgent India must have a vision and be driven by pragmatism. The claim for a permanent seat in the UN Security Council must, of necessity be ensured by the perception in world capitals that India’s stand on issues is backed by solid economic power and diplomatic weight. Economic diplomacy, therefore, has become the new buzzword in South Block and it has become the bulwark of India’s strategic vision.
India’s position as an emerging economic power has been recognised. The Indo-ASEAN and Indo-European Union summits reflected this reality. India must take this economic diplomacy further. It is against this background that the recent initiatives must be considered. The idea behind the neighbourhood economic policy is that trade, investment and technology must play a major role in diplomacy. In many cases this will provide the basis of India’s relations with other countries. The other initiative is global in its reach and IBSA has set the tone for this global initiative, which will eventually include Russia and China to make it G-5. (Officials involved in the talks were reported to have said that they would prefer the grouping to be known as IBSA rather than the Group of Three or G-3. The G-3 designation confuses the forum with the partnership between Germany, the UK and France.)
The forum, which was formally launched by the Presidents of the three countries in September at the opening of last year’s United Nations (UN) General Assembly session, aims to promote reforms to the world trade system, the World Bank, the International Monetary Fund and the UN Security Council. The three governments are also intent on promoting stronger trade links between each other’s economies. They are likely to encourage an increase in the number of air flights and shipping routes connecting the three countries.
New incentives
Agreements in the past have been little more than pieces of paper. They were signed very readily but the want of political will stopped the effective implementation. Today, all that is changing. Most of the new agreements are grounded in real social and economic needs. There is also widespread belief that these needs can be seen in different countries. Also, it has been understood that one country can learn productively from the experience of another.
Such underlying concerns have provided new agreements significance and urgency that those of the past lacked. Take, for example, the question of the complex relationship between indigenous knowledge and patent rights. Each of the three countries is rich in both biodiversity and cultural traditions, making them targets for those wanting to marry traditional knowledge with new medicines. Each country has been finding out ways to protect traditional knowledge, which is compatible with the intellectual property rules of the new international knowledge economy. Naturally, there is a strong desire to share experiences and solutions. This is what India offered South Africa when it set up an electronic database of traditional knowledge comparable to the one established by the Centre for Scientific and Industrial Research (CSIR) in Delhi.
Take the case of genetically modified (GM) crops. In each country, there is a groundswell of opinion on how to tackle the environmental impacts of such crops with such strong social and economic forces favouring them. When Indian Science and Technology Minister Murli Manohar Joshi visited Brazil in July 2001, he spent a lot of time discussing the issue at the Agency for Agricultural Research in Brasilia.
Many of the challenges currently facing the South – HIV, malaria, infant mortality, to name only a few – are of little interest to the developed countries. In such areas, there is a need for developing countries to be self-sufficient, not only at the scientific level, but also perfect the ability to put science to appropriate social and economic use.
The other more important issue of cooperation is in trade. Trade between India and South Africa has increased over the years but it is still low. South Africa is a good market and can serve as an effective production base for exports to Latin America. India can also take advantage of South Africa’s Customs Union Agreement with its neighbouring countries. Brazil and India account for 6.15 percent of the world’s real GDP and that is more than Germany’s. New Delhi has made it quite clear that it wants to do serious business with Brazil while South Africa has stated that it will not only be a major partner of India, it will also act as a collaborating bridge between Asia and Latin America.
In the long term, South Africa, for example, will stand to gain considerable strategic and economic advantage from cultivating strong links with the far more populous Brazil and India, simply because both countries are expected to be among the world’s largest six economies within the next 10-15 years.
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