Diary: Durban, Gandhi and the BRICS bank

Sheela Bhatt, who traveled with Prime Minister Manmohan Singh to the BRICS Summit in Durban, gauges the buzz ahead of the event that begins Tuesday.

As an Indian it is a nice feeling to think that the Father of the Nation, then plain Mohandas Karamchand Gandhi, arrived in Durban 120 years ago at the invitation of a fellow Gujarati, Seth Dada Abdullah, to help in a legal case. The rest is rich history for Durban, Indians and lovers of peace worldwide.

Durban is an indelible part of every Indian who values history and human values. The city, a pivotal point of the struggle for human dignity, has remained etched in the hearts of most Indians.

Without Durban, we may not have heard of Satyagraha.

Understandably, Durban, a former British colony, is growing as a modern city beyond its legacy of Gandhi and its admirable fight for racial equality and justice.

***

The newspapers in Durban say consumer giant P&G will invest more than Rand 1.6 billion (Rs 934.4 crore/Rs 9.344 billion) in the manufacturing sector in South Africa. There is a struggle going on against corruption here too.

The Indian media delegation, accompanying Prime Minister Manmohan Singh, is staying at the Coastlands Hotel, whose CEO Saantha Naidu is a well-known financial success story in Natal province. I encountered him briefly on our arrival in the elevator. Dr Singh and his delegation, including Finance Minister P Chidambaram, Commerce Minister Anand Sharma and National Security Adviser Shivshankar Menon, are staying at the awesome Fairmont Zimbali resort.

***

There is much talk about the proposed BRICS bank. Federation of Indian Chambers of Commerce and Industry officials are also buzzing about a BRICS Business Forum.

The highly ambitious BRICS bank, one hears, is at least a year away. On Tuesday there can be an agreement in principle, but all the paperwork is still not complete.

The issue of the bank’s 'ownership' pattern is not yet spelt out. The BRICS meeting has before it questions like whether the proposed bank should lend money only to the government or if it should operate like a normal bank.

The three issues of paid-up capital, membership and governance are tough, where members have genuine differences. But it is not as if it cannot be sorted out.

If the bank is established amongst China, Russia, India, Brazil and South Africa, who should invest money, and how much to begin with?

Who should have control, how, when and why?

What kind of equity should be given?

If say South Africa has less money to put on the table, can China pick up its share?

The bigger question is: Should China be allowed to pick up the share of a weaker partner?

If China does, then will China be to the BRICS bank what America is to the World Bank?

What should the form of the bank's governance be?

Should the bank lend money at concessional rates or should it behave in a commercial manner to ensure better results?

Talks are on about the initial capital corpus: Should it be $50 billion (Rs 27,1700 crore) or $100 billion (Rs 54,3400 crore)?

Finance Minister Chidambaram and his counterparts will meet on Tuesday, March 26. The expert group's report will be submitted and some formal debate may take place.

A source privy to the developments revealed to me that another issue is where the BRICS bank headquarters should be located.

India has not even asked for it!

With Chidambaram around, India will be represented with clarity when the birth of the international bank is being discussed by a Latin American, an African, a South Asian, an Asian and a Russian.

The idea of the bank is to handle infrastructure projects.

Another sticky issue, my source says, is about the inclusion of the developed countries as members in the BRICS bank.

Will enough growth be possible without their money, he asks.

The domination of China in the proposed bank is the hidden anxiety that India will not spell out, but that feel is certainly in the air.