The Road to Brazil

In April, the conferences of two international groupings – BRIC (Brazil-Russia-India-China) and IBSA (India-Brazil-South Africa) – brought some of the world's highest-profile heads of state to Brazil. Amidst all the fanfare, Brazilians reserved their heartiest handshakes, and largest front-page news spreads, for Prime Minister Manmohan Singh. It is no secret that business between India and Brazil is booming. Both governments recently committed to doubling bilateral trade to USD 10 billion in the near future; and with Indian firms sinking serious money into ambitious long-term projects in Brazil, such as offshore drilling, that number is looking attainable.

Of late, India and Brazil have been poking into each other's ambit in several interesting ways. The letters i and b have been popping up in several new acronyms floating to the top of the alphabet soup of geopolitics: in addition to BRIC and IBSA, there are now rumblings of a BASIC (Brazil, Africa South, India and China). Beyond the high-profile conferences and photo-ops, however, it is worth examining the basis of genuine partnership, what each constituent really stands to gain from these new alliances, and whether these groupings of vastly different countries are cohesive enough to last. BRIC, the most prominent of the bunch, was the brainchild of a Goldman Sachs economist writing on emerging economies in 2001. In its early days, the primary purpose of the grouping was for investment bankers interested in buying into emerging markets. This was a nifty marketing ploy, since it meant that risky investments, such as those in oil-price-dependent Russia, could be bundled into a palatable package.