IBSA began as an international dialogue forum between India, Brazil and South Africa. It represents three important geographic poles for galvanizing cooperation and greater understanding between three important continents of the developing world, Africa, Asia and South America. The forum provides a platform to engage in discussions in the field of agriculture, trade and defense among others.
After the failed Cancun Conference of the World Trade Organization (WTO), these leading countries decided to spearhead a new approach for South-South cooperation resulting in a trilateral India-Brazil-South Africa agreement. (see en.wikipedia.org/wiki/IBSA_Dialogue_Forum for more details).
(Brazil, South Africa, India – naval routes in red) (Manmohan Singh (I), Thabo Mbeki (SA), Luiz Inacio Lula da Silva()
These countries dominate their immediate neighborhood and are leaders in their continents. They bring unique and complementary strengths to IBSA; South Africa has enormous reserves of strategic minerals; Brazil is the dominant commodities producer in the world, in agricultural commodities and now in Oil. India, about to have the world’s largest domestic consuming population, is the world’s IT Hub and a major manufacturer.
Throughout history, sea routes have mattered more than land routes because they carry more goods more economically. Our red lines in the above map illustrate how IBSA countries can end up dominating the major sea lanes of the world. It is only natural for IBSA to begin playing an increasingly important role in the foreign policies of India, Brazil, South Africa. In fact, as Arvind Gupta, (India’s Institute for Defense Studies) writes “Though conceived as a dialogue forum, IBSA is rapidly moving into becoming a strategic partnership”. .
Brazil and India both explicitly desire permanent seats on the UN Security Council. South Africa, barred by its African Union obligations, sought and won a non-permanent seat in 2007. With such seats, the economic strengths of the IBSA countries, its commanding geo-strategic position and its leadership within the developing world, IBSA will be the alliance to watch for the next decade and beyond.
We are not surprised that most American commentators have not heard of IBSA or know very little about it. However, we are very surprised that most emerging market investors are equally unaware of it. This is one of our reasons for writing this comment.
The other reason is the recent article in Wall Street Journal Asia that analyzes the impact of IBSA on the world and especially on China. Titled “Look at Brasilia, not Beijing”, this article begins “.. a more compelling challenge to the current world order may be emerging from an unlikely trio of countries that boast both impeccable democratic credentials and serious global throw weight.”.
The author of this article is Bruce Gilley, an assistant professor of political science at Portland State University and co-editor of “Political Change in China: Comparisons with Taiwan” (2008). We encourage our readers to read this entire article at online.wsj.com/article/SB123912571625797593.html. Below, we include some excerpts from this article.
- “The quasi-alliance of these three powers has serious implications for the international system, and its major underwriter, the U.S., depending on how the challenge is handled. But an equally important, and quite unintended implication, is the sabotage of China’s great power ambitions. By robbing China of its claims to represent developing countries, this new cooperative trio could sideline China from the major debates in international affairs. That may be good news for domestic reform in China, which has long been stunted by the country’s great power ambitions.“
- “Democracy is not just about IBSA’s membership requirements; it bears on the very purposes of IBSA… In a strange way, IBSA is a community of democracies from hell — a group of countries with impeccable democratic credentials who are using that common identity to challenge rather than advance U.S. interests. International relations scholars call this “soft balancing” because rather than confronting the U.S., they are simply trying to restrain and reorient it. The reason this may work is that, as democracies, these countries have the moral stature in the international system to achieve those goals. Indian and Brazilian diplomats in particular, already among the world’s best, can advance the IBSA agenda because they share common ideals.”
Professor Gilley discusses three main reasons why China is likely to stay outside IBSA.
- “First, China is a U.N. Security Council permanent member which sets it on a collision course with the IBSA aspirations to expand that body to reflect the views of the world’s poor countries…..China, torn between its rhetoric calling for the democratization of international affairs and the reality that it would be a loser from this process, has decided to steer the self-interested course, to the detriment of its claims to represent the world’s vast unwashed.”
- “The third reason it stands outside IBSA is one that it cannot change: It is not a democracy. IBSA members note that they are “vibrant democracies” and Daniel Flemes of Hamburg-based German Institute for Global and Area Studies noted in a 2007 paper that “IBSA’s common identity is based on values such as democracy, personal freedoms and human rights.” Human rights, civil society, social empowerment and “gender mainstreaming” are central to their moral capital.”
Whether you agree with Professor Gilley or not, we urge you to learn more about IBSA if you are a serious student of emerging markets or of the world in general.
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