BRICS Bank and MH 17 Crash- Some Implications

 

Two major international developments, though totally unrelated, have vital implications for each other.

One was the establishment of BRICS Bank at the just concluded BRICS Summit at Fortaleza in Brazil, with the laudable objective of facilitating infrastructure development in the member nations to begin with, as well as to provide extra forex to the member nations in the event of a crisis. It is also expected that the availability of funds by way of Contingency Reserves Arrangement to the tune of $100 billion, will help reduce market volatility in the member nations, as the US gradually withdraws its stimulus, besides of course facilitating better economic relationship among BRICS member states.

The second development, a tragedy which has shocked the world, is the downing of MH 17 in eastern Ukraine. Russia is a common factor in both these developments, for one being a member of BRICS, and secondly, being a principal player in the Ukrainian crisis. In the recent weeks Russia has been accused of transferring heavy weaponry to the insurgents- like the surface-to-air Bak missile system, thought to have brought down the MH 17.

As Russia now finds itself isolated and in the midst of an unfavorable world opinion, regarding its role (indirect of course) in the downing of MH 17, the BRICS leadership could be at crossroads regarding their respective positions in the international forums vis-a-vis Russia, with specific reference to the Ukrainian crisis. This crisis has revealed its disastrous potential for other unrelated players as well, through the MH 17 tragedy.

That an important member of BRICS could defy the well established international order, and arm the insurgents in a sovereign state to further its interests vis-a-vis that state, can by itself prove to be a huge dampener for the BRICS member nations, in their quest to forge mutual trust among each other, something which is a critical minimum foundation, on which the very edifice of BRICS Bank can sustain itself.

It would be worthwhile recalling that way back in 1979, when the erstwhile Soviet Union moved into Afghanistan, the US through its ally Pakistan, armed the insurgents in Afghanistan to enable them counter the Soviet forces. Two decades later, on Sept 11 2001, the world witnessed the worst possible terror strike in modern history, which had its repercussions in the world economy as a whole. The US was forced to actively intervene in Afghanistan to wipe out the epicenter of world terrorism, an outcome of proxy war played out in the early eighties. That the US is struggling to get out of Afghanistan is also worth observing.

This has important lessons for Russia as well, besides for the world community as a whole, which cannot be insulated from the side effects of the ill conceived actions in any part of the world by the superpowers, something which has been well established by now, with Iraq being another manifestation.

Now, how would the BRICS leadership respond to such a development in international geopolitics, and would the much required cohesiveness facilitated by a glue called 'trust' remain unscathed among the BRICS member states? It would be something to be curiously watched in the near future.     

 

That the ultimate implications of such developments would be on BRICS Bank as well, needs no further elaboration.