By: Our Correspondent

Hopefully the so-called BRICS summit, held in Durban, South Africa this week, will be the last of its kind. The efforts of China, India, Russia, Brazil and South Africa to show that they represent a viable common front against western interests and can further development is proving an embarrassment. It is also, if silently, viewed as an affront by the many large developing nations left out of this self-appointed group.

To have been born out of an acronym invented by Goldman Sachs, the epitome of western financial capitalism at its most exploitive, was bad enough in the first instance. Although they agreed at the meeting to create a development bank to challenge the World Bank, which they accuse of being biased to the west, in fact they failed despite endless discussion to come up even with a workable formula for a development bank, which makes them look doubly ridiculous. Supposed to help global financial stability by lending to countries in short to medium term difficulties, its resources at best would be puny compared with needs.

The likelihood that the bank notion would prove a fiasco was obvious enough from the start. How could it achieve any worthwhile size without being dominated by China? And how could India accept that? Not only is China’s economy larger than the others but it has vastly larger foreign reserves and is the only one with a sustained record of current account surpluses. It is also the only one not dependent on commodity exports.

There is simply no defining principle among the BRICS. Russia and China have common interests in some areas, such as countering Islamism in central Asia as evidenced by the Shanghai group. But beyond that there is much suspicion. Russian energy exports to China are a bond of sorts but Russians are protective of their manufacturing and worried about the inroads of Chinese products into their markets.

India, Brazil and South Africa are all in the same boat. With mineral prices tending to fall they increasingly worry that Chinese investment in mining while a short term gain presents a long term threat to their pricing power. Meanwhile their manufacturers – especially in Brazil and India – seek ways of stemming Chinese imports. The four countries have almost nothing in common if one looks at the structures or level of development of their economies. Russia cannot be described as a developing country, just a faded industrial one which has come to rely on energy exports.

Even worse for the BRICS concept is that it omits so many quite large developing countries which are probably in a better position to provide development assistance in expertise and trade as well as cash. South Africa was included simply to have an Africa nation, but Nigeria may be just as qualified if only because of population. Likewise countries such as Indonesia, Pakistan, Egypt cannot be ignored. The successful middle income countries of Asia such as Thailand with their records of industrial development, strong finances and trade openness could do more for global stability and development.

It is said that once the BRICS establish their bank, others may be able to join. But that by definition negates the notion that these five countries have anything to contribute as a group. As it is, China has far more at stake enlarging its role in the IMF and other global institutions, at the same time as playing a useful role with other east Asian countries in creating financial stabilization mechanisms, notably the swap arrangements involving China, Japan, Korea and the Asean group. This is a practical arrangement, not a product of political hot air.

As for the widespread belief in the developing world that the Permanent membership of the Security Council be increased to reduce western interests established decades ago, failure to make progress is as much due to China as anyone. India in particular frets that China is the main obstacle to enlargement because that would have to include India and Japan.

Being occasionally lined up against US interests, particularly on liberal economics, is scant basis for so narrow a group with no obvious positive purpose or goals. Far better if developing members of the G20, perhaps joined by others concerned about the impact of unregulated capital flows and volatile exchange rates, get together. The years of the non-aligned movement are long gone now that the world is not so divided between two blocs. But any chance that a group of middle rank power with common interests finding common cause to promote financial stability, freer and fairer trade and a more equal distribution of global influence is set back by the BRICS summiteering antics.

Better that they make common cause with like-minded G20 countries than clutter up the international agenda with this silly show.