The IBSA summit held in the second week of October in New Delhi dis played the resolve of India, Brazil and South Africa to work together to meet the challenges posed by global financial crisis and rising food and energy prices. Fixing a trilateral trade target of US$25 billion to be achieved by 2015, the partner countries signed seven pacts, including one to improve connectivity, which has been a major impediment in the realisation of their full trade potential.

The Delhi Declaration, which was adopted at the end of the IBSA summit, expressed grave concern at the global financial crisis. “The explosion of new financial instruments, unaccompanied by credible and systemic regulation, has resulted among others in a major crisis of confidence for which those responsible should be held accountable and liable,” it said.

India’s Prime Minister Dr. Manmohan Singh at a joint press conference with President Luiz Inacio Lula da Silva of Brazil and President Kgalema Petrus Motlanthe of South Africa, said, “We agreed on some ideas to tackle them and to collaborate closely as the international community grapples to find satisfactory solutions”. He also disclosed that they have decided to instruct their Finance Ministers and Governors of Central Banks to convene a meeting to establish a coordination mechanism”.

Brazilian president Luiz Inacio Lula da Silva was less charitable towards the rich countries for changing the world into “a gigantic casino”. He wanted the IBSA grouping to be “agile and efficient” and speak in one voice to be heard on global issues. South African president Kgalema Motlanthe also expressed concern at the crisis and called for changes in the current financial architecture. “The ill-conceived decisions of the few have brought the international financial system on the brink of collapse. There is a need for improving governance of financial markets and institutions,” he said

Targets of Trade

IBSA set a target of US$15 billion in trade and investment among themselves by 2010. In addition to the target of US$15 billion by 2010, IBSA leaders agreed to set a bigger target for trilateral trade of US$25 billion by 2015.

To formalise and institutionalise greater trade integration and multi-sectoral linkages, a Comprehensive Economic Cooperation Agreement and a Protocol on Trade and Business Facilitation were envisaged at the Summit. The Protocol will include major business associations of the three countries.

IBSA believes that cooperation, exchange and trade will not only reduce dependence on the North, but also will increase the productivity and competitiveness of the IBSA group of countries.

Social Agenda

Addressing the IBSA summit, Prime Minister Manmohan Singh said, “A good beginning has been made in evolving a Social Development Strategy for IBSA”. He noted that India has circulated a Concept Paper on the future of agricultural cooperation within IBSA.

The main Summit was preceded by meetings of IBSA Academic group, a Business Summit, meetings of Editors and Women’s Forums. These Forums represent outreach activity, considered vital for the steady development of IBSA.

At the IBSA Business forum summit, India’s Industry Minister Kamal Nath was characteristically assertive. “We are witnessing a global economic gloom due to developments in the drivers and engines of global economy, namely, the US and the EU. Brazil, South Africa and India are the new engines now,” Nath told the business delegations of the three member countries.

IBSA leaders were emphatic that the trilateral body should not regress into an exclusive club but extend their platform to multi-lateralism. Argued minister Kamal Nath. “The three countries have different but not divergent interests. For example at the WTO, South Africa’s problem is de-industrialisation, Brazil is concerned about subsidy flows in the advanced countries and India wants protection for the livelihoods of its 550 million farmers. These varied positions in a way represent the concerns of 120 countries in the developing world”.

Pranab Mukherjee, India’s External Affairs Minister, told the IBSA academic Forum, “IBSA represents an important milestone in the area of South-South Cooperation (SSC) bringing together three leading democracies in the developing world representing the three continents combining between them substantial developmental experiences.”

Speaking at valedictory session of the IBSA Summit, Anand Sharma, India’s Minister of State for External Affairs noted, “IBSA is in a position to make decisions on what is happening in the world today and what should be happening, including both political and financial issues”.

Nalin Surie, India’s Secretary (West) in the Ministry of External Affairs told newspersons at the pre-summit briefing, “IBSA is on its way to become a mature organisation. It presents a great potential for cooperation and opportunities.”

Besides the trilateral focus, in its wide-ranging activities as an international forum, IBSA will also assist other developing countries in attaining their development aspirations. Botswana, Burundi and Laos are some of the countries that will continue to receive assistance from IBSA.

Legacy of IBSA

IBSA Forum, created in 2003 to renew South-South cooperation, is oriented towards coordinating action to narrow global imbalances and accelerate trade and trilateral relations.

Besides boosting sectoral cooperation that is under way, the IBSA Forum has also boosted trilateral trade. The trade between Brazil and India has more than trebled since 2003, to US$ 3.1 billion dollars in 2007. Growth of trade between Brazil and South Africa has been slightly lower. India and South Africa represent only 1.9 percent of Brazil’s foreign trade, but that proportion has doubled since 2000, indicating there may be unexploited potential for further growth.

The three countries have made advances in sectors such as biotechnology and nanotechnology and, separately, in areas like biofuels and tropical agriculture in Brazil, and information technology in India.

Sixteen working groups are coordinating sectoral cooperation among the three countries, including public administration, energy, climate change and different social and economic areas. Other initiatives involve women, entrepreneurs, parliamentarians and intellectuals in specific forums that are attempting to broaden dialogue between societies that geography and history have set so far apart.

Preferential Trade Sought

The Business community from India in its report presented to the three heads of state made some concrete proposals. “In the light of MERCUSOR and SACU having concluded a PTA, India and MERCUSOR also having concluded a PTA, and India and SACU discussion on PTA gaining ground, it might be appropriate to consider a MERCOSUR-SACU-India PTA. To promote intra-IBSA trade, the three governments could consider reducing both tariff and non-tariff barriers on imports from each other,” the business community report said.

The chambers of Indian industry including the CII, FICCI and ASSOCHAM wanted IBSA to work towards establishing a global market for ethanol, wherein ethanol becomes a global commodity.

Within IBSA, the trans-border business profile of each country is different from the other. For instance, Indian companies like the Tatas, Jindals, Apollo Tyres etc have their presence in South Africa, but no South African company has invested in India till date.

However, Brazil is looking forward to Indian investments in the healthcare and skill development sectors.

The Summit focussed on the connectivity aspect. Prime Minister Manmohan Singh observed in his remarks. “We should also study some of the proposals made for enhancing connectivity and logistical linkages by encouraging private sector participation in IBSA routes. These include promotion of long term arrangements trans-shipment facility in South Africa to connect India and Brazil and strategic partnerships between the between shippers and carriers using incentives, development of a dedicated IBSA large domestic logistics operators of the three countries,” Dr Singh said after the conclusion of the summit level talks.

Dr. Singh rounded up with a call for renewed effort to reform institutes of international governance be it the United Nations or the G-8 and work purposefully towards the conclusion of the Doha round of trade talks promoting development and inclusive growth.

The leaders also adopted 50-point Delhi Summit Declaration expressing views on issues of global governance and regional focus. Expressing satisfaction at the outcome of the Summit, the leaders said they look forward to the Summit in Brazil on October 8, next year.