BRICS: A symptom of the emerging multipolar world?
The BRIC concept was first introduced by Jim O’Neill in 2001. Goldman Sachs economist predicted that four developing countries (Brazil, Russia, China and India) will replace the world’s six largest economies (US, Japan, UK, Germany, France and Italy) by 2050. The idea behind this analysis was that the aging populations of the G7 countries in the coming decades would lead to much more moderate economic growth over time. Given the size of their populations and workforce, these developing countries are likely to produce a much higher productivity and growth rate than developed economies.
These states then joined forces and coordinated their efforts to propose an alternative to the current architecture of international organizations that emerged from the Bretton Woods agreements. In 2006, on the sidelines of the United Nations General Assembly, Russia, China, Brazil and India formed a Cooperation and Exchange Group. Since 2010, together with South Africa, the five BRICS countries now account for almost a quarter of the world’s wealth. The total population of BRICS countries is 3.24 billion and their total national income is 26 billion dollars.
China, the world’s second largest economy, is the principal banker of BRICS. Without its economic leadership and financial guarantees, BRICS would have no real organizational form. BRICS-led financial institutions include, in particular, the New Development Bank and the BRICS Reserve Fund. Six countries from Africa, the Middle East and Latin America are expected to join the organization as new members next year.
This is expected to strengthen the financial capacity of the BRICS organizations, with investments restricted following international sanctions imposed on Russia. From January 2024, BRICS plus six will account for more than 30% of global GDP. The planned participation of Saudi Arabia and the United Arab Emirates, two of the world’s largest oil and gas exporters, is expected to give the group prominence in the geopolitics of the global oil market.
In addition to Saudi Arabia, other Middle Eastern countries have distinguished themselves by their willingness to implement the financial dictates of the BRICS, especially in terms of ” de-dollarization “, even before applying for membership. On May 14, authorities in Baghdad banned Iraqis from trading in US dollars. This move is even more surprising given that the Iraqi monetary system has been based on a fixed exchange rate between the Iraqi dinar and the US dollar since the US invaded the country in March 2003. It is claimed that a significant slowdown in dollar deliveries to Iraq in recent months, aimed at preventing illegal dollar transfers from Iraq to Syria and Iran (which are subject to US sanctions), is behind this decision. As a result, the Iraqi dinar lost value, creating a particularly harmful financial situation for the Iraqi people.
The war in Ukraine saw the international system take another step towards a more multipolar and multicultural world. It confirmed the desire of the rising powers of the international system to develop strategies of differentiation from the West. Since the Russian aggression on 24 February 2022, India, Brazil and South Africa (IBSA) have demonstrated their determination to remain distant or equidistant from the two warring parties, Moscow and Kiev, and the latter’s Western allies. Despite Russia’s violation of core principles of the United Nations Charter, IBSA has proliferated signs of defiance: rejection of Western sanctions, calls for a ceasefire on existing positions despite Moscow now controlling a fifth of Ukrainian territory, and purchases of Russian oil and gas.
While Brazil, India and South Africa refuse to align with Western positions, China has mounted a much broader challenge to become the undisputed power of the international system. A few weeks before the Kremlin decided to launch its aggression against Ukraine, Xi Jinping signed a sixteen-page joint declaration with Vladimir Putin during side events of the Beijing Olympics aimed at overthrowing the liberal international order. Since then, Beijing has continued to belligerently verbally challenge the rules-based system.
This year, the Chinese President presented to the National People’s Congress a new foreign policy doctrine that departed from China’s previous strategy and was summarized in the phrase “Dare to fight.” This new doctrine reflects China’s new, assertive strategy on the international stage and contrasts with its traditional tone of caution and reserve. According to Xi Jinping, the world has entered a “new era” full of turbulence and challenges that the old global governance system, overly elitist and dependent on American financial institutions, cannot overcome. This is why Beijing offers alternatives to current models in terms of economic development and regional and global security.
However, a turning point may emerge that could have an impact on BRICS integrity. This shakeup is likely to occur between India and China. New Delhi does not want to allow Beijing to restructure the BRICS as it wishes and present itself as the leader of the South. India still remembers its strategic defeat against China in the Himalayan plains in 1962, which enabled Beijing to control a large part of Ladakh, which it renamed “Aksai Chin”. The effects of this defeat are still felt today, as 2020 saw deadly clashes in Ladakh’s Galwan valley that claimed the lives of twenty Indian soldiers and four Chinese.
Over the past three years, the two armies have significantly strengthened their positions, deploying more than 60,000 troops on both sides of the Line of Control and a large number of new villages, including at least four new villages built by the Chinese, in Arunachal Pradesh, where Beijing claims sovereignty. built infrastructure. A dozen places in Arunachal Pradesh – towns, rivers and mountains – have been renamed in Chinese and Tibetan. Politically, the negotiations have been hampered by Beijing’s military intransigence, leading to frequently tense exchanges between the two delegations.
Expect Sino-Indian relations to remain at odds in the short to medium term. India wants existing institutions to be reformed so that the developing world is better represented; Its participation in BRICS is part of this perspective. China, on the other hand, aims to dethrone the US dollar in order to get rid of the extraterritoriality of US law and replace the International Monetary Fund (IMF) and the World Bank with the New Development Bank and BRICS Reserve Fund in the economic development of the Global South countries. These two institutions do not require any political reciprocity by recipient governments.
The BRICS expansion project has also revealed points of disagreement between Beijing and New Delhi. The question of enlargement is a critical point for the Chinese because they see in it the possibility of opening the organization to other countries and creating a counterbalance to the pro-Western institutions that exist today. Therefore, the latest move to expand the organization is a real victory for the Chinese President, who is the organization’s most ardent supporter. In March 2017, Foreign Affairs Minister Wang Yi became an outspoken advocate of Xi Jinping’s proposal to expand the BRICS organization to include other major developing economies under the name “BRICS-Plus”. India did not want BRICS to take an overly anti-Western turn: The future membership of Venezuela and Iran in January 2024, both subject to US sanctions, proves China’s desire to make the group a platform to counter the US-led international liberal order.
Therefore, the increasing diversity of interests between the two largest BRICS economies may reduce the group’s ability to take concrete action and achieve real success in defending the Global South. It will be interesting to see how this fragmentation of interests will affect the integrity and effectiveness of BRICS as an organization in the medium and long term.