Some countries like Pakistan might have got ruined economically as it nurtured this Frankenstein monster. It is really unfortunate that the media had condensed the 109 paragraphs Goa declaration into what the member countries said on terrorism. The 11-page Declaration has said a lot on economic issues but sadly only a few paragraphs that talked of terrorism have been highlighted, dissected and analysed in the country. This is partly understandable as the summit was held few weeks after the Uri attack by terrorist followed by successful surgical strike by India across LoC to neutralize terrorists nurtured by Pakistan.

BRICS comprising Brazil, Russia, India, China and South Africa accounted for nearly two thirds of the over Six Billion humanity in the World. Rightly the Goa declaration has come up with some far-reaching economic cooperation that would help in boosting sustainable development and uplift of the poverty stricken humanity to a new high level. It would have been better for India and the region if the spotlight had been building the economies and bringing prosperity in the region and the grouping.

In the face of Indo-Pak tension, India’s inclusion of BIMSTEC (The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) bore even thicker geo-strategic connotations. As India invited all countries in the region except Pakistan, it in effect has isolated it in the region. Holding BIMSTEC outreach programme in tandem with BRICS Goa summit made a major difference for India. BIMSTEC comprise Bangladesh, Sri Lanka, Thailand, Myanmar, Nepal and Bhutan. The BIMSTEC outreach programme has not only isolated Pakistan in the South Asian region but a significant step in promoting trade in the region. Hitherto it was not happening as South Asian Free Trade agreement remained a non starter because Pakistan was dragging its feet all along. Now the regional economic cooperation will flourish, that too China extending its helping hand through BRICS.

The decision to cooperate in the areas of renewable energy, gas-based development, small scale industries, pushing up intra-trade, nuclear energy, telecommunication, infrastructure and labour, are critical for pushing India’s growth story. India may be on a sweet spot economically, but it had several weaknesses, which needed to be corrected for it to become a developed nation in decade or two. Furthering economic cooperation among the five-member BRICS would help in this direction, particularly when the advanced economies are tottering.

One significant development on this economic front is the operationalisation of the New Development Bank (NDB) and of the Contingent Reserve Arrangement (CRA). This bank will contribute greatly to the global economy and the strengthening of the international financial architecture. The BRICS bank, headquartered in Shanghai in China with India’s K. V. Kamath at its first Chairman, has already approved its first set of loans for renewable energy projects in BRICS countries. This is important particularly for countries like China and India. While China has set up largest manufacturing capacity in solar photovoltaic panels, India is likely to become one of the largest solar energy generating countries in the World with its plan to install one lakh MW of solar power by 2022. This is not an impossible task as solar energy is fast catching up with per unit cost coming down to almost equivalent of thermal power. Also India has sunshine for almost 300 days in a year in most parts of the country.

The Goa declaration expressed satisfaction over the issuance of first set of $3 billion equivalent green bonds in Chinese currency RMB. This will be helpful to India as well for imports for solar panels from China. The Contingent Reserve Fund of $100 billion will help in providing global financial safety net. At present the safety net is provided only by IMF to tide over balance of payment crisis through structural adjustment loans.

Welcoming the adoption of the UN 2030 Agenda for Sustainable Development, the Goa declaration said the people-centric and holistic approach enshrined in the Agenda and the overarching focus on poverty eradication, lays an equal and balanced emphasis on the economic, social and environmental dimensions of sustainable development. It demanded that the developed countries honour their Official Development Assistance commitments to achieve 0.7% of Gross National Income to developing countries.

Meeting at a time when the global economic recovery is progressing but weaknesses still persisting, BRICS voiced its determination to use all policy tools – monetary, fiscal, and structural, to achieve the goal of strong, sustainable, balanced and inclusive growth. BRICS also believed that this will promote economic expansion through enhanced trade, commercial and investment linkages besides the need to push multilateral trading system under the WTO rather than increasing protectionism as practiced by advanced economies

Apart from emphasising the importance of BRICS cooperation in order to help stabilise the global economy and to resume growth, it welcomed experts exploring the possibility of setting up an independent BRICS Rating Agency based on market-oriented principles to strengthen the global governance architecture.

The summit helped India to make a forceful plea to evolve a mutually acceptable mechanism among BRICS nations to prevent multinationals from dodging taxes. This will part of the groupings efforts to curb black money generation. The declaration also hightlighted the need to come out with norms to check black money and bringing to book those accused of corruption and tax evasion.

Because of complex international tax architecture, many global companies, which have presence across borders, end up paying no tax anywhere. They shift their profits circumventing tax laws. With Prime Minister pushing this issue, the key ideas agreed to by BRICS is that taxation should happen at the point where the activity takes place rather than where companies registered headquarters are or where their main subsidiary or the holding company is. This move help companies setting up shell companies in tax havens to avoid tax. This will go a long way in checking this major white collar crime.

In sum, the BRICS summit has yielded tangible results in economic cooperation that will help in reversing the sagging growth in the region as well in BRICS grouping accounting for two-thirds of the humanity in the World. (IPA Service)