South Africa is set to host the upcoming BRICS summit on August 22. This significant gathering will bring together leaders from Brazil, Russia, India, China, and South Africa. It comes at a critical juncture, amidst heightened tensions between the United States and its formidable rivals, China and Russia.
However, another aspect to consider in this meeting is the growing significance of the Global South, which has become particularly evident through the nuanced responses from Asia, Africa, and Latin America regarding the Ukraine war.
Following Chinese President Xi Jinping’s emphasis on expediting the BRICS expansion process during the 14th BRICS Leaders’ Meeting in Beijing in June 2022, both Iran and Argentina have officially submitted their applications to join the group.
In June 2023, the BRICS Foreign Ministers’ Meeting welcomed the participation of foreign ministers from Kazakhstan, Saudi Arabia, Argentina, Egypt, Indonesia, Nigeria, Senegal, the United Arab Emirates, Thailand, and other guest countries for the first time. This notable gathering signifies the accelerating expansion of BRICS.
However, despite the ambitious expansion plan of BRICS and the proposed idea of a common BRICS Currency aimed at de-dollarisation, there are concerns about the relevance of BRICS for India. Some argue that the group is leaning towards China and risks becoming an anti-west platform that primarily serves China’s interests, often to the detriment of India.
This article explores both viewpoints in-depth, providing a comprehensive analysis from multiple angles.
What Is BRICS?
Jim O’Neill, an economist at Goldman Sachs, coined the acronym BRIC to underscore the robust growth prospects of these nations and their potential to wield global economic supremacy by 2050.
In the early 2000s, Russia, India, and China (RIC) initiated a dialogue, expressing their shared goal of transitioning from a unipolar to a multipolar world. Their aim was to establish a more compassionate global governance system.
The acronym RIC transformed into BRIC in 2009 when Brazil joined, and further expanded to BRICS in 2010 when South Africa was included.
Since then, the group has convened annually, bringing together heads of government, foreign ministers, national security advisers, and senior officials. These meetings serve as a platform for high-level discussions and facilitate coordination among the participating nations.
The BRICS, consisting of five major countries, collectively represent approximately 41% of the global population, 31.5% of the global GDP (based on purchasing power parity in 2022), and account for 16% of the global trade. In terms of market prices, their combined GDP amounts to $25.913 trillion, in contrast to the G7’s $43.766 trillion (World Bank, 2022).
The BRICS has garnered significant political and economic influence, attracting approximately 40 developing countries eager to join its ranks. Among these nations are Argentina, Venezuela, Nicaragua, Iran, Saudi Arabia, the UAE, Algeria, Ethiopia, Senegal, Guinea-Bissau, Nigeria, Kazakhstan, Bangladesh, Thailand, and Indonesia.
Achievements Of BRICS
The BRICS has made significant strides since its inception. It has made impactful contributions in the areas of infrastructural development, financial stability, and international summits. The key achievements of BRICS are summarised as follows:
It Becomes An Important Voice For Global South
One crucial element contributing to the group’s achievements is its ability to navigate internal disagreements and prioritise common goals. The group remains steadfast in its dedication to creating a fair and balanced global order, reforming the governance system to ensure inclusivity and representation, fostering sustainable development, promoting economic decentralisation, and upholding a rules-based multilateral trading system.
Establishment Of NDB
Established the New Development Bank (NDB) in 2015 with an initial commitment of $100 billion, funding an array of projects such as the Mumbai Metro rail, the Delhi-Meerut Regional Rapid Transit System, and several renewable energy projects in its member countries.
Contingent Reserve Arrangement
Instituted the Contingent Reserve Arrangement in 2015, another commitment of $100 billion, to shield their economies from financial instability and currency speculation. China, Russia, India, Brazil, and South Africa have made significant contributions to this initiative.
Demonstrates A High Level Of Commitment
Demonstrated a high level of commitment to the organisation, conducting summits annually without fail since 2009. In contrast to other organisations, no leader from any member country has ever missed a summit.
Despite differences, diplomatic and economic ties have grown stronger:
- The BRICS nations possess unique characteristics that set them apart.
- While Brazil and Russia are known as commodity exporters, China stands as commodity importer. Democracies thrive in Brazil, India, and South Africa, while China and Russia adhere to autocratic systems.
- When it comes to nuclear weapons, Brazil and South Africa do not possess them, unlike China, India, and Russia.
Furthermore, there is a pressing concern regarding a border dispute between China and India. - Despite these disparities, the BRICS nations have successfully forged strong diplomatic and economic ties, showcasing their ability to overcome differences.
Two Different Views About BRICS
BRICS often evokes contrasting perceptions among foreign policy experts. Some critics question its significance, going as far as suggesting its termination. On the other hand, some idealise BRICS as a revival of the historical unity of the South, reminiscent of the Bandung Conference in the 1950s or the New International Economic Order of the 1970s.
Let’s delve into these two perspectives on BRICS and explore their implications.
View 1: The importance Of BRICS Is Self-evident
BRICS Can Reshape World Politics And Become The Voice of the Global South
- Many nations, predominantly from the global south, are eager to join the BRICS as they strive to break free from perceived Western dominance. It has been reported that more than 40 countries, including Saudi Arabia, Belarus, Ethiopia, Argentina, Algeria, Iran, Mexico, and Turkey, have expressed their interest in becoming a part of this alliance.
- The BRICS bloc, aiming to broaden its global partnerships, is increasingly seen as a counterweight to the US and its allies. The latter are frequently criticised for meddling in the internal affairs of other nations, especially in Global South countries.
- Many of the countries interested in joining BRICS are motivated both politically, by the desire to counter US dominance, and economically, by the potential access to funding from the BRICS’ New Development Bank. This is particularly relevant in the post-COVID era, as many economies struggle to recover. Iran is an example of a country with both these motivations.
- The present global financial system is predominantly controlled by the US dollar and the US Federal Reserve.
- The common use of the dollar simplifies international trade for many nations. Nevertheless, this system subjects countries to the impact of US monetary policy changes, such as interest rate fluctuations and sovereign measures like quantitative easing.
- This setup also empowers extensive US-led sanctions regimes.
- For emerging economies in the Global South, exploring other options for development financing and currency settlements is appealing.
- These alternatives could provide a degree of autonomy, bolster economic growth, and offer some protection against the extraterritorial reach of sanctions.
- BRICS is well placed to offer an alternative economic and financial order, one that could reduce the dependence of many nations on the West.
- The BRICS and the Shanghai Cooperation Organization (SCO) are important reactions to these shortcomings. They are encouraging cooperation between eastern and southern countries, where the US and its main allies often find themselves unwelcome.
- The proposed BRICS common currency poses a significant challenge to the dominance of the US dollar and sets the stage for a shift away from dollar dependence, commonly known as dedollarisation.
- New members of BRICS would likely use their membership to negotiate more effectively with Western countries.
BRICS Holds Great Appeal For Global South Nations
- Global South nations find BRICS (Brazil, Russia, India, China, and South Africa) and the SCO (Shanghai Cooperation Organisation) appealing due to their desire for alternative structures to help achieve their primary goals. These goals typically include economic development and maintaining sovereignty.
- Forming a coalition with Russia and China provides these nations with the leverage they need in their interactions with the Western world, which is primarily led by the United States.
- The association with BRICS and SCO also assists in the creation of a more multipolar world, a long-standing ambition of the middle powers in the Global South.
- There is a widespread perception among Global South nations that the Western agendas, including promoting democracy and human rights, are inconsistent and often serve their interests. These nations, many of which are not fully democratic, view these agendas as potential threats.
- Aligning with China and Russia, both of which are authoritarian states with little interest in the Western precepts of democracy and human rights, provides a protective shield for these Global South nations. This helps guard against the intrusion of these norms and the potential threats they pose to regime stability.
Potential Barrier To BRICS Becoming Stronger
- BRICS, often misunderstood as a South-South initiative, is more accurately an East-South grouping.
- A major obstacle to the strengthening of BRICS is the tension between the two key Asian members, India and China.
- The conflict in 2020 between India and China, causing numerous casualties, has led to a high-altitude military standoff. This situation has only been partially mitigated over the last three years.
- The BRICS meetings offer a platform for diplomatic dialogues between India and China in a safer, multilateral context.
- For BRICS to continue thriving and increase their influence, the members don’t have to have close relations but rather align on common interests.
- Despite the discord between them, no BRICS leader has ever been absent from the annual summits, even during the COVID-19 pandemic when meetings were held virtually.
- Rather than undermining the group, these challenges have fortified diplomatic and economic bonds among BRICS countries. Membership in BRICS is now an integral part of each member’s foreign policy identity.
Counterview: The Diminishing Importance of BRICS
Many experts in both Western countries and India downplay the importance of BRICS and what it stands for. They emphasise that, up until now, the impact of BRICS has been primarily symbolic rather than substantive.
Some of the arguments raised by critics against BRICS include:
BRICS Fail To Live Up To The Hype
- The BRICS acronym was created by Goldman Sachs economists around the year 2000.
- It initially suggested that Brazil, Russia, India, and China would surpass the G6 economies in total size by the middle of the century.
- This concept seemed plausible for about a decade but has since been disproven.
- By 2001, China had the sixth-largest economy and India was not even in the top 10. However, both are now among the five largest economies.
- Brazil and Russia, on the other hand, haven’t lived up to expectations. Russia is no longer in the top 10 economies.
India, while among the top five, exhibits significantly lower per capita income compared to the other three countries.
Logic Of Geography And Demography No Longer Exists
In 2001, the BRIC countries (Brazil, Russia, India, China) were among the six most populous and the seven largest in terms of land area. This gave additional weight to the BRIC acronym, based on geography and demography.
Nevertheless, there have been some changes that have taken place:
- Pakistan and Nigeria have now surpassed Russia and Brazil in population.
- The original economic rationale of the group faded when South Africa, with an economy only a tenth of India’s, was admitted as a fifth member.
BRICS Has Lost Its Relevance As Economic Grouping
- The BRICS economic group is no longer as relevant.
- This is due to differing long-term economic trends.
- China and India’s economies have performed better than expected in the last 20 years, while Brazil, Russia, and South Africa have underperformed.
- Stable pro-growth policies in China and India have increased their influence in the global economy.
- The weaker performance of Brazil, Russia, and South Africa means that BRICS is not a threat to the G7 group.
De-dollarisation Is Unlikely To Take Off
- It would be difficult for India to support a currency arrangement that is mainly influenced by China’s economic activities.
- The concept of de-dollarization presented by the BRICS nations may not succeed.
- Shifting currency sovereignty might entail complex issues.
- Given China’s significant economic influence in the BRICS group, India remains cautious.
- The prospect of India participating in an alternate currency arrangement has already been rejected.
- South Africa also shows little support towards the concept.
- The concept of exploring alternatives to dollar-based trade remains primarily a subject of discussion rather than a practical policy.
The Illusion Of BRICS As A Counter To Western Power
- The perception that BRICS (Brazil, Russia, India, China, and South Africa) could establish a new global order opposing Western dominance is expanding.
- This idea has attracted the interest of over 40 developing nations who wish to join BRICS.
- Despite the growing interest, it’s unlikely that BRICS will succeed in this venture.
- This belief is based on the historical precedent of the G-15, a similar group of leading developing economies.
- The G-15 strived for the same purpose for 25 years, but it ceased to be a major global force now.
BRICS May Become A Vehicle For Chinese Diplomatic Thrust
- The future role of BRICS is uncertain, especially since China and Russia do not fit the traditional notion of developing economies. Their main similarity seems to be their opposition to the West.
- BRICS has the potential to serve as a tool for China’s diplomatic aspirations. In Asia, China’s current allies are limited to North Korea, Cambodia, and potentially Myanmar. As a result, broader diplomatic support from BRICS would greatly benefit China.
- It is evident that China, with its strengthening ties with Russia, influence in Africa, and recent developments in the Gulf, is advocating for an increase in BRICS membership. This could transform BRICS into a platform to challenge the dominance of Western powers.
- Interestingly, BRICS has started engaging with another group led by China, the Shanghai Cooperation Organisation.
- This situation could complicate matters for India, considering its strained relationship with China. India has been taking measures to limit imports and investments from China and to restrict access to its market for Chinese technology.
BRICS’s Anti-West Stance May Affect India Negatively
- India’s stance on various developmental issues, including climate change, often differs from that of developed countries.
- However, India is aligning more with Europe and the US regarding defence supplies, technology transfer, and people movement.
- Compared to China and Russia, India has a more open political system.
Risks Associated with BRICS’s Anti-West Sentiments:
- BRICS often promotes a non-Western view of the world which sometimes becomes anti-Western.
- With the escalating conflict between the US and China, the ongoing Russia-Ukraine dispute, and the emerging rivalry between the West and Russia in Niger, BRICS’s anti-Western tendencies could become more prominent.
- These tendencies could negatively affect India.
Lack Of Support For IBSA In BRICS
- India is disappointed that China and Russia in BRICS did not support the IBSA countries’ (India, Brazil, and South Africa) bid for permanent membership of the UN Security Council.
- Efforts to achieve this will continue, but success is doubtful due to the current tense relations between China and India.
India Has Less To Gain From A Diluted Club
India expresses concerns over the expansion of BRICS. The reasons behind this apprehension are:
- India gains less if smaller powers join the BRICS group, resulting in a diluted club.
- The inclusion of new members might decrease India’s influence within the group.
- These new members are likely joining with an eye towards gaining easier access to China.
- As a result, there is a possibility that BRICS could shift towards a more China-centric approach, potentially compromising its neutral stance on various contentious issues involving the US and other major Western countries.
BRICS Overshadows IBSA And BIMSTEC
- China’s prominent role in BRICS allows it to assert the most influential voice of the Global South, often overshadowing India in the process.
- China has the largest GDP among all BRICS countries (Brazil, Russia, India, China, South Africa). This creates an informal hierarchy.
- South Africa joined BRICS in 2010, a move led by China. This strengthened China’s influence in Africa.
- Entry of South Africa within BRICS overshadowed the IBSA group (India, Brazil, and South Africa) which represents three large democracies in the global south.
- Through this, China demonstrated that discussions about the future of the global south cannot happen without its presence.
- India must pay urgent attention to the workings of the IBSA initiative and BIMSTEC (Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, Thailand).
- IBSA promotes South-South Cooperation (SSC), representing Asia, South America, and Africa. It plays a key role in encouraging closer collaboration on global matters.