The BRICS Have Changed the Balance of Forces, But They Will Not by Themselves Change the World
Vijay Prashad
In 2003, high officials from Brazil, India, and South Africa met in Mexico to discuss their mutual interests in the trade of pharmaceutical drugs. India was and is one of the world’s largest producers of various drugs, including those used to treat HIV-AIDS; Brazil and South Africa were both in need of affordable drugs for patients infected with HIV as well as a host of other treatable ailments. But these three countries were barred from easily trading with each other because of strict intellectual property laws established by the World Trade Organisation. Just a few months prior to their meeting, the three countries formed a grouping, known as IBSA, to discuss and clarify intellectual property and trade issues, but also to confront countries of the Global North for their asymmetrical demand that the poorer nations end their agricultural subsidies. The notion of South-South cooperation framed these discussions.
Interest in South-South cooperation dates back to the 1940s, when the United Nations Economic and Social Council established its first technical aid programme to assist trade between the new post-colonial states in Africa, Asia, and Latin America. Six decades later, just as IBSA was formed, this spirit was commemorated by the United Nations Day for South-South Cooperation on 19 December 2004. At this time, the UN also created the Special Unit for South-South Cooperation (ten years later, in 2013, this institution was renamed as the United Nations Office for South-South Cooperation), which built upon the 1988 agreement on the Global System of Trade Preferences Among Developing Countries. As of 2023, this pact includes 42 member states from Africa, Asia, and Latin America, that are collectively home to four billion people and have a combined market of $16 trillion (roughly 20% of global merchandise imports). It is important to register that this longstanding agenda to increase trade between Southern countries forms the pre-history of the BRICS, set up in 2009 and presently made up of Brazil, Russia, India, China, and South Africa.
The entire BRICS project is centred around the question of whether countries at the nether end of the neo-colonial system can break out of that system through mutual trade and cooperation, or whether the larger countries (including those in the BRICS) will inevitably enjoy asymmetries of power and scale against smaller countries and therefore reproduce inequalities rather than transcend them. Despite the limitations of the BRICS project, it is clear that the increase in South-South trade and the development of Southern institutions (for development financing, for instance) challenges the neo-colonial system even if it does not immediately transcend it.
The Upcoming BRICS Summit
The upcoming fifteenth BRICS Summit (22—24 August) in Johannesburg, South Africa, has the potential to make history. The heads of state of Brazil, Russia, India, China, and South Africa will gather for their first face-to-face meeting since the 2019 summit in Brasilia, Brazil. The meeting will take place eighteen months since the beginning of military conflict in Ukraine, which has not only raised tensions between the U.S.-led Western powers and Russia to a level unseen since the Cold War but also sharpened differences between the Global North and South.
There are growing cracks in the unipolar international order imposed by Washington and Brussels on the rest of the world through the North Atlantic Treaty Organisation (NATO), the international financial system, the control of information flows (in both traditional and social media networks), and the indiscriminate use of unilateral sanctions against an increasing number of countries. As United Nations Secretary-General António Guterres recently put it, ‘the post-Cold War period is over. A transition is under way to a new global order’.
In this global context, three of the most important debates to monitor at the Johannesburg summit are: (1) the possible expansion of BRICS membership, (2) the expansion of the membership of its New Development Bank (NDB), and (3) the NDB’s role in creating alternatives to the use of the U.S. dollar. According to Anil Sooklal, South Africa’s ambassador to BRICS, twenty-two countries have formally applied to join the group (including Saudi Arabia, Argentina, Algeria, Mexico, and Indonesia) and a further two dozen have expressed interest. Even with numerous challenges to overcome, the BRICS are now seen as a major driving force of the world economy and of economic developments across the Global South in particular.
After Setbacks, BRICS Re-energises
In the middle of the last decade, the BRICS experienced a number of problems. With the election of Prime Minister Narendra Modi in India (2014) and the coup against President Dilma Rousseff in Brazil (2016), two of the group’s member countries became headed by right-wing governments more favourable to Washington Both India and Brazil retreated in their participation in the group. The de facto absence of Brazil, which from the outset had been one of the key driving forces behind the BRICS, represented a significant loss for the consolidation of the group. These developments undermined and hampered the progress of the NDB and the Contingent Reserve Arrangement (CRA), established in 2015—which represented the greatest institutional achievement of the BRICS to date. Although the NDB has made some progress it has fallen short of its original objectives. To date, the bank has approved some $32.8 billion in financing (in fact, less than that has been issued), while the CRA—which has $100 billion in funds to assist countries that have a shortage of U.S. dollars in their international reserves and are facing short-term balance of payments or liquidity pressures—has never been activated.
However, developments in recent years have reinvigorated the BRICS project. The decisions of Moscow and Beijing to respond to escalations of aggression in the New Cold War by Washington and Brussels; the return of Luiz Inácio Lula da Silva to the presidency of Brazil in 2022 and the consequent appointment of Dilma Rousseff to the presidency of the NDB; and the relative estrangement, to varying degrees, of India and South Africa from the Western powers have resulted in a ‘perfect storm’ that seems to have rebuilt a sense of political unity in the BRICS (despite unresolved tensions between India and China). Added to this is the growing weight of the BRICS in the global economy and strengthened economic interaction between its members. In 2020, the global share of the BRICS’s Gross Domestic Product (GDP) in purchasing power parity terms—31.5 percent—overtook that of the Group of Seven (G7)—30.7 percent—and this gap is expected to grow. Bilateral trade among BRICS countries has also grown robustly: Brazil and China are breaking records every year, reaching $150 billion in 2022; Russian exports to India tripled from April to December 2022, year-on-year, expanding to $32.8 billion; while trade between China and Russia jumped from $147 billion in 2021 to $190 billion in 2022, an increase of nearly 30 percent.
What’s at Stake in Johannesburg?
Faced with this dynamic international situation and growing requests for expansion, the BRICS face a number of important questions.
In addition to providing concrete responses to interested applicants, expansion has the potential to increase the political and economic weight of the BRICS and, eventually, strengthen other regional platforms that its members belong to. But expansion also requires having to decide on the specific form that membership should take and may increase the complexity of consensus building, with a risk of slowing the progress of decision making and initiatives. How should these matters be dealt with?
How can the NDB’s financing capacity be increased, as well as its coordination with other development banks of the Global South and other multilateral banks? And, above all, how can the NDB, in partnership with the BRICS’ network of think tanks, promote the formulation of a new development policy for the Global South?
Since the BRICS member countries have solid international reserves (with South Africa having a little less), it’s unlikely that they will need to use the CRA, instead, this fund could provide countries in need with an alternative to the political blackmail of the International Monetary Fund, which requires developing countries to enact devastating austerity measures in exchange for loans.
BRICS is reported to be discussing the creation of a reserve currency that would enable trade and investment without the use of the U.S. dollar. If this were established it could be one more step in efforts to create alternatives to the dollar, but questions remain. How could the stability of such a reserve currency be ensured? How could it be articulated with newly created trade mechanisms which do not use the dollar, such as bilateral China-Russia, China-Brazil, Russia-India, and other arrangements?
How can cooperation and technology transfer support the re-industrialisation of countries like Brazil and South Africa, especially in strategic sectors such as biotech, information technology, artificial intelligence, and renewable energies, while also fighting poverty and inequality, and achieving other basic demands of the peoples of the South?
Leaders representing 71 countries of the Global South have been invited to attend the meeting in Johannesburg. Xi, Putin, Lula, Modi, Ramaphosa, and Dilma have a lot of work to do, to answer these questions and make progress on the urgent matters in global development.
As these major countries of the South meet in Johannesburg, they will confront the vast inequities in South Africa. These fissures are the grist for the poems of Vonani Bila, whose voice rises out of Shirley Village (Limpopo) and reminds us of the long walk ahead, through the BRICS project and beyond:
When the sun recedes
into the Soutpansberg,
Giyani Block puts on a
black adder coat;
a mirror of death and despair.
Doctors and nurses stand on their feet.
They shall not rest when the workers’ strike
ignites its furious flame.
They’re on tiptoe, looking up,
wrestling the faceless, tailless monster.
(Vijay Prashad is an Indian historian, editor, and journalist. He is a writing fellow and chief correspondent at Globetrotter, and the director of Tricontinental: Institute for Social Research. He is a senior non-resident fellow at Chongyang Institute for Financial Studies, Renmin University of China. He has written more than 20 books. Courtesy: Tricontinental: Institute for Social Research, an international, movement-driven institution focused on stimulating intellectual debate that serves people’s aspirations.)
India, the Reluctant BRICS Traveller
M.K. Bhadrakumar
India became a beacon of hope for the Western media for a short while in the run-up to the BRICS Summit in Johannesburg — a potential dissenter who might derail the grouping’s acceleration toward a “de-dollarisation” process.
Reuters floated a rumour that Prime Minister Narendra Modi might not attend the summit in person, which of course was an excessive case of wishful thinking but called attention to what a high stakes geopolitical game BRICS has become.
Such paranoia was unprecedented. If up until last year, the Western game was to mock at BRICS as an inconsequential club, the pendulum has swung to the other extreme. The reasons are not far to seek.
At the most obvious level, there is great sensitivity in the Western world that the massive effort through the past 18 months to weaponise sanctions against Russia not only flopped but boomeranged. And this is at a time when the United States’ morbid fear of being overtaken by China peaked — burying the global hegemony of the West since the “geographical discoveries” of the 15th century.
The recent years witnessed a steady strengthening of the Russia-China partnership, which has reached a “no limits” character, contrary to the Western calculus that the historical contradictions between the two neighbouring giants virtually ruled out such a possibility. In reality, Russia-China partnership is shaping up as something bigger than a formal alliance in its seamless tolerance of the optimal pursuit of each protagonists’s national interests while concurrently supporting the core interests of both sides.
Thus, any format in which Russia and China play a lead role, such as BRICS, is bound to be in the US’ crosshairs. It is as simple as that. The New York Times called the BRICS expansion “a significant victory for the two leading members of the group, increasing China’s political influence and helping to reduce Russia’s isolation.”
It drew comfort that the group is heterogeneous and does not have a clear political course, “except for the desire to change the current global financial and management system, making it more open, more diverse and less restrictive.”
This is the whole point. The Indian analysts are missing the wood for the trees. The Russian Foreign Minister Sergey Lavrov disclosed to the media that behind closed doors, the Johannesburg summit had “quite a lively discussion” [read divergent opinions] but reached a consensus on the “criteria and procedures” of BRICS expansion, which he outlined as follows:
“The weight, prominence and importance of the candidates and their international standing were the primary factors for us [BRICS members]. It is our shared view that we must recruit like-minded countries into our ranks that believe in a multipolar world order and the need for more democracy and justice in international relations. We need those who champion a bigger role for the Global South in global governance. The six countries whose accession was announced today fully meet these criteria.”
Later, after returning to Moscow from Johannesburg, Lavrov told the Russian state television two important things:
- “We [BRICS] don’t want to encroach on anyone’s interests. We simply don’t want anyone to hamper the development of our mutually beneficial projects that are not aimed against anyone.” Western politicians and reporters “tend to wag their tongues, while we use our heads and [engage in] concrete issues.”
- There is no need for BRICS to become an alternative to the G20 now. That said, “the formal division of the G20 Group into G7+ and BRICS+ is taking a practical shape.”
Unless one is myopic, BRICS’ sense of direction is there for all to see. The grumbling and hand-wringing about the logic of BRICS expansion is complete nonsense. For, the unspoken secret lies here, as a leading Russian strategic thinker Fyodor Lukyanov wrote in the government daily Rossiyskaya Gazeta:
“We can hardly talk about an anti-Western orientation — with the exception of Russia and now, perhaps, Iran, none of the current and likely future [BRICS] participants openly wants to oppose themselves to the West. However, this reflects the coming era, when the policy of most states is a constant choice of partners to solve their problems, and there may be different counterparts for different problems.”
This is the reason why India, which carefully protects its line of “multi-alignment” — that is, cooperation with everyone — is also satisfied with a large and heterogeneous BRICS. Delhi is least interested in strengthening antagonistic sentiments within the BRICS community. The Indian commentators cannot grasp this paradox.
Indeed, the pragmatism in admitting three major oil producing countries from the Gulf region (Iran, Saudi Arabia and the UAE) only signals what Lavrov meant by the “projects” and “concrete issues” that BRICS is grappling with — principally, creating a new international trading system to replace the 5-centuries old system that the West created, which was geared to transfer wealth to the metropolis and enabled the latter to get fatter and richer.
Basically, this is today about tackling the phenomenon of the petrodollar, which is the pillar of the western banking system and at the very core of the “de-dollarisation” process that the BRICS is aiming at. Suffice to say, the curtain is coming down on the Faustian deal of the early 1970s that replaced gold with American dollar and ensured that oil would be traded in dollars, which in turn required all countries to keep their reserves in dollars, and eventually turned into the principal mechanism for the US’ global hegemony.
Put differently, how is it possible to roll back the petrodollar without Saudi Arabia being at the barricades? That said, it is also well understood by all member states, including Russia and Saudi Arabia, that while BRICS is “non-western,” a transformation of the BRICS into an anti-Western alliance is impossible. Quintessentially, what we are seeing in the BRICS’ expansion, therefore, is its transformation into the most representative community in the world, whose members interact with each other bypassing Western pressure.
This is enough for a start, as the reaction in the Western countries to the outcome of the Johannesburg summit testifies. The leading German daily Suddeutsche Zeitung noted that with this limited expansion itself, BRICS has gained “significant geopolitical and economic weight. The question now is how the West will react to this.”
A top official at the Konrad Adenauer Foundation, Caroline Kanter told the daily, “It is is obvious that we [Western countries] are no longer able to set our own conditions and standards. Proposals will be expected from us so that in the future we will be perceived as an attractive partner.”
France’s Le Figaro wrote that the “enthusiasm” of some 40 countries for BRICS membership “testifies to the growing influence of developing countries on the world stage.” The Guardian highlighted expert opinion that BRICS expansion is rather “a symbol of broad support from the global South for the recalibration of the world order.”
At the same time, the bottom line is that BRICS expansion is perceived in the West as a political victory for Russia and China. Nonetheless, despite its tensions with China, India did the right thing by trimming its sails accordingly while sensing the winds of change and anticipating a new dawn breaking for BRICS cooperation that could inject new vitality into the grouping’s functioning and further strengthen the power of world peace and development.
It is about time the government rethinks the viability of its strategy to holding the relationship with China hostage to the border issue. The BRICS Summit highlighted that China enjoys big support from the Global South. It is quixotic, to say the least, to act as a proxy of the US to contain China.
India will find itself in a cul-de-sac by dissociating itself from the issue of local currencies, payment instruments and platforms simply because China could be a beneficiary of a new trading system that is part of a more just, equitable and participative global order. India risks alienating the Global South who are China’s natural allies, by turning its back on the BRICS’ core agenda of a multipolar world order.
(Ambassador M.K. Bhadrakumar served the Indian Foreign Service for more than 29 years. Courtesy: Indian Punchline, the author’s blog.)
