Brazil & IBSA:A Blueprint for Future South-South Cooperation

• IBSA, comprised of India, Brazil, and South Africa, has improved trade and cooperation among the countries since 2003.
• IBSA is notable for its South-South cooperation and anti-hegemonic rhetoric.
• However it is not necessarily an easy model for other Southern nations to subscribe to.

Brazil and IBSA: A Blueprint for Future South-South Cooperation?

The New International Economic Order (NIEO), a formal set of proposals put forth by means of a UN resolution in 1974, created a new push for Southern global influence during the Cold War. The resolution states that the signatories support a new economic order “based on equity, sovereign equality, interdependence, common interest and cooperation among all States, irrespective of their economic and social systems which shall correct inequalities and redress existing injustices.” However, in the antipathetic global political climate of the 1970s, the proposals were largely ignored, if not outright demonized as being too revolutionary.

Initiated in 1964, the Group of 77 (G77) is similar to the younger NIEO, but it has remained active into this century, including summits in 2000 and 2005. Ultimately, however, the group is crippled by the fact that the seventy-seven members are often economically divided into blocs amongst themselves. Countries in the upper echelon of the G77 have therefore developed intra-group relationships with increasing regularity in order to combat trade inequality. One such group, the IBSA Dialogue Forum, composed of India, Brazil, and South Africa, has demonstrated that an advantageous future exists for South-South cooperation, but that it is not necessarily a cure-all to counter Northern misuse of authority.

Origin and Practices of IBSA

The Brasilia Declaration was signed on June 6th, 2003, by foreign ministers from each IBSA country. It supported major global reforms, including a restructuring of the United Nations and the Security Council. It further called for greater equity in trade and sustainable practices, such as recognizing the importance of biological diversity in the environment and commodity price fluctuations. IBSA was intended to function as a forum where national delegates could present a united front to the issue of unequal economic development. Every twelve months a different member country and the country’s respective leader oversee a dialogue regarding new global developments. As the IBSA website notes, “IBSA keeps an open and flexible structure. It does not have a headquarter nor a permanent executive secretariat.” Instead, respective leaders act as the triumvirate head of the organization, with little bureaucracy underneath.

Though IBSA has little formal personnel structure, it does control various areas of coordination. Working groups have formed for “deepening mutual knowledge and exploring common points of interest on sectoral areas” that later provided for signed Memoranda of Understandings. The IBSA fund was created with the goal of supporting projects to help other developing countries come closer to achieving the Millennium Development Goals, which include infrastructure improvements in Cape Verde, among others. In recent years, the initial discourse has evolved into more formal agreements and the intensity of actions among the three countries, especially in trade, has amplified.

IBSA Effectiveness in Trade

After eight years of formal cooperation, intra-IBSA trade has increased tremendously. Within two years of the Brasilia Declaration’s implementation, Brazilian exports to India increased 105 percent, and exports to South Africa increased 86 percent. Most recently, Brazil and India have announced their goal to expand their trading partnership from USD 7.73 billion to USD 10 billion in the coming years. From a commercial standpoint, IBSA has been enormously successful in improving trade among the three nations, and Brazil in particular has benefited greatly. While some of the improvement can be attributed to general increases in the value of exports and the expansion in trade, IBSA’s actions have undoubtedly had a profoundly beneficial effect. The overall nominal value of Brazilian exports over the same period saw an increase of 62 percent, a lower rate of growth than the growth rate of exports to India and South Africa during the same period. Overall, IBSA has been effective at increasing trade cooperation among member nations, its primary goal as an organization.

Although trading within the bloc has increased, Brazil also has advantageously used their relationship with South Africa to intensify trade with the rest of the continent, adding another benefit to the trade relationship within IBSA. “By pushing forward bilateral cooperation with Pretoria, Brazil drives Argentina, its main regional partner, to negotiate through Mercosur with the Southern African Customs Union (SACU), which led to a 2004 preferential commercial agreement with Mercosur.” India, too, is in the process of reaching out to Mercosur countries Argentina and Uruguay for lines of credit and increasing investment projects. However, provisions within Mercosur might prevent growth in IBSA. According to a statement by a former Indian foreign minister, “the final objective of our three countries is a free trade agreement.” While Brazil is allowed to operate with some autonomy, free trade is not a necessarily welcome or ubiquitous phrase among Latin American nations, and this could even provoke greater rifts in a less than stable Mercosur as a result.

Security in IBSA

IBSA is primarily an economic forum, and movement towards collective security seems unlikely, given the varying defense concerns of each nation. The 2008 New Delhi summit declaration outlines the collective opinions of the three countries. Provision 26 described the need for “the goal of the complete elimination of nuclear weapons” and peaceful disarmament of existing arms. However, in section 27 the use of nuclear energy for safe practices is encouraged from an environmental standpoint. Perhaps more interesting are the provisions for nuclear non-proliferation; India is a member of the nuclear club and South Africa is a former member that can boast its voluntary disarmament. Brazil has flirted with nuclear technology with the Resende program, and possible nuclear capabilities in the future could come under scrutiny given the New Delhi agreement.

Further expanding their role, the new group also supports a “comprehensive and cooperative approach to eradicate terrorism.” With regards to Iraq, Afghanistan, and Lebanon, the trifecta largely promotes a return to peace and stability with the involvement of the United Nations, where the IBSA nations are often vocal. The idea of a unified policy towards peace keeping is a noble one, but does not have a clearly spelled out political future with IBSA. The statements on Iraq, Afghanistan, and Lebanon are striking in their blandness, as the individual countries have not yet been major actors in these conflicts. IBSA does promote itself from a foreign policy standpoint in a very notable way. “The IBSA nations have agreed to back each other up in their bids as regional representatives to the UN Security Council, with Brazil competing with Mexico and Argentina, South Africa with Nigeria and Egypt, and India with Pakistan and Indonesia.” While IBSA is not likely to become a major security operation, the individual states support each other in pursuing existing preferential positions in the international and regional structures of power.

Drawbacks of Trilateral Negotiation

When IBSA was first formed, BRIC was merely a term used to group the Big Four developing countries of Brazil, Russia, India, and China together, all of which were lodged on the cusp of economic preeminence. Today, BRICS, with the 2010 inclusion of the “S” of South Africa, is a formal group of the five countries, which has convened meetings of the respective heads of state, and a summit in 2009. While BRICS is relatively new, it has already shown influence on world markets. At the 2009 summit, BRIC countries called for “a stable, predictable and more diversified international monetary system,” an indirect attack on the U.S. dollar that sent its international value downward. While BRICS has not yet called for concentrated multilateral trade improvement, its seemingly greater influence could eventually make IBSA redundant.

Furthermore, IBSA is burdened by large differences among the three countries that may have resisted long-term effects. While all are hegemons in their respective regions, there are major differences and internal issues particular to each nation. For example, South Africa’s AIDS prevalence rate of 18 percent dwarfs India’s .3 percent and Brazil’s .6 percent. And while all three countries are facing environmental problems, Brazil’s deforestation of the Amazon could have debilitating effects on a much larger scale than the environmental issues faced by the other countries. India’s population of 1.17 billion towers above that of Brazil and South Africa. Ultimately, these wide differences between the three countries mean that collective action is less likely, and issues spelled out in joint agreements are nice ideas that are unlikely to come to fruition. While the IBSA fund has had success in financing projects, they are set up to function on a smaller scale than larger corporations. It is unlikely that ideas put forward on a larger scale by IBSA will witness a major impact on one of the larger powers, especially with no secretariat to implement the proposals.

The Future of South-South Agreements

While IBSA is considered a South-South trilateral agreement, it is important to note that the respective countries are hardly at the bottom of the global economic rankings. Brazil’s GDP is USD 1.6 trillion, India is USD 1.37 trillion, and South Africa is at USD 286 billion, 8th, 10th, and 31st in the world respectively. Much of IBSA’s success comes from the fact that it is made up of desirable trading partners. Therein lies the problem for future South-South trade agreements; one that involves Bolivia, Burkina-Faso, and Laos, for example, will not be as successful as IBSA. However, the idea of South-South agreements is a noble one in order to address terms of trade for lesser-developed countries. Therefore, it seems that a more correct term than South-South is Middle-Income trade, which has a viable future in attempting to improve terms of trade amongst rapidly developing countries. This could also open up Middle-Income-Low-Income trading blocs, where Middle-Income countries aim to improve trade relations and attempt to influence world policy with states of varying incomes; this would involve trade on a much smaller scale than defines the unwieldy multinational policy coordination involving the G 77.

IBSA has proven itself as a modestly successful trilateral forum. Trade among members has increased, but beyond this, little of consequence has been achieved. Documents signed by IBSA suggest that overall, this is the primary goal—policy agreements or aphorisms that carry little weight or say anything of significance. Therefore, while South-South agreements are seen as a counterweight in the global political arena, they may not be as radical as previously labeled due to their narrow focus. In the coming years, such differences may very well fade into the background as BRICS continues to institutionalize and IBSA becomes redundant. Ultimately, the founding principle behind IBSA is that the North has not helped poorer countries develop to their full potential. This idea is a proving to resonate as one that can unite IBSA and spark other South-South agreements in order to better improve the welfare of countries beginning to experience being a part of the global power structure.

ENDS

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