The full text of Delhi Declaration, i. e. the BRIC leaders’ declaration of Thursday, can be found on the Indian Ministry of External Affairs’ website.
It describes a number of international trends, including the Eurozone crisis:
The build-up of sovereign debt and concerns over medium to long-term fiscal adjustment in advanced countries are creating an uncertain environment for global growth. Further, excessive liquidity from the aggressive policy actions taken by central banks to stabilize their domestic economies have been spilling over into emerging market economies, fostering excessive volatility in capital flows and commodity prices. The immediate priority at hand is to restore market confidence and get global growth back on track. We will work with the international community to ensure international policy coordination to maintain macroeconomic stability conducive to the healthy recovery of the global economy.
No matter if American quantitative easing in recent years, or the European sovereign debt crisis, low interest rates in these countries usually lead to flows of money into emerging markets, seeking better investment conditions, i. e. interest rates there. However, Anand Shankar, a researcher at the Department of Economic and Policy Research, argued late last year that FII (foreign institutional investment) inflows to India had actually fallen after the November 3, 2010 announcement of the American central bank of quantitative easing 2, but attributes this to factors that do not refute the general rule of capital flows from low-interest-rate regions into emerging markets’ equities.
In China’s case, according to an undated paper (including early 2011 data) by Zhang Liqing and Huang Zhigang of the Central University of Finance and Economics, empirical results show that the effect of hot money on both stock price and housing price is insignificant, and the key factor to fuel asset bubbles is the monetary aggregate*). “Hot money” had, however, been an important contribution to foreign reserve increase. That problem, however, at least according to Michael Pettis, is at least as much China’s responsibility as it is America’s.
The Delhi Declaration basically states that it is the low-interest-rate regions’ responsibility to address the problem, and leaves it there.
The mention of goals like peace, security and development in a multi-polar, inter-dependent and increasingly complex, globalizing world are essentials, but not news – nor are calls on advanced economies to adopt responsible macroeconomic and financial policies, avoid creating excessive global liquidity and undertake structural reforms to lift growth that create jobs. The G20 is determined as the premier forum for international economic cooperation, global governance institutions like the IMF are urged to reform themselves more quickly, the possibility of setting up a development particularly for projects in BRICs and other developing countries was considered on the summit, the Doha Round and global trade get a mention, so does all international, political mega-news, particularly Afghanistan, Iran, Syria, and terrorism.
Fortunately, there’s an action plan, too. Or, rather, an appointment diary for the coming fifteen months or so.
Such touch-on-everything statements seem to be the rule at BRIC meetings – at least Stefan Wagstyl, the Financial Times‘ emerging markets editor, doesn’t appear to see anything unusual in it. They “made the right noises”, he wrote in a blog post on Thursday, but missed the opportunity to back a common candidate for the World Bank presidency from the developing world, even though there is a first-class contender in the race, Nigerian finance minister Ngozi Okonjo-Iweala.
The [wo]man would probably still lose, writes Wagstyl, but the point was that the divisions among the Brics are as significant as their common interests – details there.
Maybe this is the most interesting bit within the declaration:
We welcome the conclusion of the Master Agreement on Extending Credit Facility in Local Currency under BRICS Interbank Cooperation Mechanism and the Multilateral Letter of Credit Confirmation Facility Agreement between our EXIM/Development Banks. We believe that these Agreements will serve as useful enabling instruments for enhancing intra-BRICS trade in coming years.
The master agreement, explains IANS news agency,
is aimed at reducing the demand for fully convertible currencies for transactions among BRICS nations, and thereby help reducing the transaction costs of intra-BRICS trade
Russia had made similar suggestions in 2008, in its business with Belarus and Vietnam, plus the increased use of both Ruble and Yuan for mutual Russian-Chinese trade.
South Africa, by now the event’s fifth member, but not represented in its four-letters household name, keeps a low profile in the global summit coverage. But president Jacob Zuma isn’t unhappy:
Africa feels, through the participation of South Africa in BRIC, we have reached, indeed, the mainstream of the global issues. The fact that our independent development banks have signed an agreement to support our projects of BRIC which include those in the continent of Africa brings hope to the African continent, to one billion people who have been, in the main, excluded from the mainstream positive developments abroad.
[Update, December 23, 2012: soundfile removed. Please contact me by email or comment if you are interested in the soundfile - JR]
Wagstyl, being a Financial Times editor (see this post, further up), likes the Delhi Declaration insofar as it makes the right noises – this most probably refers to its call on the advanced economies to undertake structural reforms to lift growth that create jobs. But he also points out BRIC’s weaknesses, using the World Bank presidency issue as a case in point: The truth is that the divisions among the Brics are as significant as their common interests.
In Huanqiu Shibao‘s words, quoting the China News Service:
Chinese state chairman Hu Jintao met with Indian prime minister Manmohan Singh in New Delhi, on March 29. Singh said that India neither is neither intending nor in a position to participating in any strategies to contain China. India acknowledges that the Tibet Autonomous Region is part of China’s territory and doesn’t allow Tibetans to engage in anti-China activities in India. India hopes to work together with China to protect peace and tranquility on the two countries’ border regions, and to properly solve the border issues through friendly negotiations.
And in real-world terms, outside the diplomatic phrasebook:
There are border issues (with two Indian divisions wanting to die on or near what China thinks is her territory), India hosts Tibet’s government in exile (and will probably continue to do so), and it is, above all, noteworthy that there is a need to state that India won’t participate in containing China, even though there seem to be different interpretations about basically every sensitive issue the two sides keep discussing.
Anyway, many among the Huanqiu commenter public aren’t buying the diplomatic achievement. 说一套，做一套 (they say one thing and do another), one of them wrote today, and 其实银度也是老美的一颗棋子 (in fact, India is just America’s chess piece), another recalled.
That said, Sandip Roy, the First Post‘s editor in Calcutta, anticipates trouble for New Delhi, when it comes to its role as a host for Tibetan clergy, officialdom, and refugees:
Jamphel Yeshi burned himself alive to protest Chinese President Hu Jintao’s visit to New Delhi. Hu is in Delhi, impassive as ever. The Chinese brushed this off as just another nefarious plot by the Dalai Lama.
The country that really loses face is India. Tibetans were once the feel-good symbol of India’s democratic munificence. Now they have become India’s democratic headache, the inconvenient poor relation who refuses to stay discreetly out of sight. India wants the BRIC summit to go off without a hitch, the interactions with Hu Jintao to be photo-op perfect.
But instead an unemployed Tibetan refugee grabs the international media spotlight, dying with 98 percent burns and leaving behind a handwritten call to action.
These restless Tibetans, a part of India, yet apart, put New Delhi in a fix. “I think India is playing the Tibet card consciously. But it should not allow it to burst. This kite-flying is part of our diplomacy,” Indo-China expert CP Bhambhri told The Telegraph.
The same phenomenon as in Dharamsala and around can be observed among Tibetans in China, and worldwide: the older they are, the more they seem to be horrified by the ongoing series of self-immolations, and – one may suppose – worried about the repercussions they may have on how Tibetan concerns will be viewed by a global public, too.
Tsering Woeser, currently under house arrest in Beijing, wrote in a statement published online on March 8 that such self-destructive measures did nothing for the cause of Tibetan rights, and called on influential Tibetans, including monks and intellectuals, to help end the self-immolations. Gade Tsering and Arjia Lobsang Tupten also signed the statement.
Staying alive allows us to gather the strength as drops of water to form a great ocean,
Previously, on January 25, Woeser had extensively quoted her husband, Wang Lixiong, in an editorial for Radio Free Asia. Woeser and Wang show due respect for the self-immolators, but also note that
No matter how brave and devoted the self-immolaters are in sacrificing their lives, it will make people think that it is mainly an act of desperation. Any act of self-immolation while doubtlessly instigating emotional turmoil, is also always a sign of helplessness and loss.
Wang tries to formulate a sketch of a Tibetan civil society (without using the word):
Village autonomy can be implemented only through the participation of every single common villager; this will turn the people into initiators and they will no longer have to passively wait for long and inconclusive negotiations by leaders; if this is not done, they will demonstrate under gunpoint and even go up in flames as self-immolators to give pressure to the “game” played at a high-level.
*) Monetary aggregates comprise monetary liabilities of MFIs [monetary financial institutions] and central government (post office, treasury) vis-á-vis non-MFI euro area residents excluding central government, according to a ECB definition (see “background” there).
» All India Radio Press Review, Aug 21, 2011
» Teaming up for Copenhagen, Dec 6, 2009
» Thich Quang Duc,app. SMSU, ca. 2000