Modi hosts BRICS leaders as bloc beset by economic woes

NEW DELHI — Prime Minister Narendra Modi will look to reinvigorate the BRICS group of emerging nations at a summit this weekend with India seen as a bright spot in a bloc whose clout has been undermined by economic woes.

BRICS — a club made up of Brazil, Russia, India, China and South Africa — was formed in 2011 with the aim of using its growing economic and political influence to challenge Western hegemony.

The nations, with a joint estimated GDP of $16 trillion, set up their own bank in parallel to the Washington-based International Monetary Fund and World Bank and hold summits, rivalling the G7 forum.

But the countries, accounting for 53 per cent of the world’s population, have been hit by falling global demand and lower commodity prices, while several have also been mired in corruption scandals.

Russia and Brazil have fallen into recession recently, South Africa only just managed to avoid the same fate last month while China's economy — the recent engine of world growth — has slowed sharply.

India by contrast is now the world's fastest-growing major economy in an otherwise gloomy environment and its GDP is expected to grow 7.6 per cent in 2016-17.

Indian foreign ministry official Amar Sinha said the leaders would debate "global growth prospects, the role of BRICS in leading this global growth and our contributions to it".

China's Vice Foreign Minister Li Baodong said the leaders would "exchange in-depth views on BRICS cooperation and other global and regional issues", according to state news agency Xinhua.

Some of the more substantive talks are expected at bilateral meetings, on the sidelines of the summit in the tourist state of Goa, with Modi expected to separately meet China's President Xi Jinping and Russia’s president.

Brazil's new President Michel Temer, who replaced impeached Dilma Rousseff, will look to such meetings to boost trade ties and help drag his country out of its worst recession in half a century.

The summit comes amid some scepticism about the future of BRICS, especially given India's efforts to reach out to the US and Europe since Modi — a one-time pariah of the West — came to power in 2014.

'Reduced potency' 

Eswar Prasad, professor of trade and economics at Cornell University in the United States, said BRICS had been weakened by its collective burdens.

"The economic troubles faced by many members of the BRICS group have reduced its potency and influence in the world economy," he told AFP. 

Prasad said BRICS needed to focus on a global issue such as pushing back against mounting anti-globalisation rhetoric to stay relevant.

"Given its sheer size and continued significant contribution to global growth, this group could have some clout if it acted in concert in dealing with issues of global governance and the international monetary system."

Geethanjali Nataraj, currently at the Brookings Institute India, agreed the summit needed to focus on areas of common concern, warning India against pursuing contentious issues with regional rival China. 

"India needs to tread with caution and avoid all controversial issues that would lead to friction," Nataraj wrote in the Financial Express.

Taking place at the same time in Goa is a meeting of heads of a seven-nation grouping called BIMSTEC loosely based around the Bay of Bengal.

Myanmar's Aung Sang Suu Kyi, Bangladesh Prime Minister Sheikh Hasina as well as the leaders of Thailand, Sri Lanka, Bhutan and Nepal are set to attend for talks focused on trade.