BRICS is an informal grouping of emerging economies: Brazil, Russia, India, China, South Africa. It provides a platform for its members to challenge the global financial system dominated by the United States and its allies in forums like the G7, the International Monetary Fund and the World Bank. Sarang Shidore (The Nation, 8/17/23), director of the Global South program at the Quincy Institute and adjunct faculty at George Washington University, notes that many countries of the Global South are frustrated with the US dollar being the de facto world currency, because it leaves their
economies at the mercy of US interest rates and sovereign measures such as quantitative easing, and enables harsh US-led sanctions regimes. For the Global South, alternative pathways of both development financing and currency settlements are attractive ways to achieve autonomy, enhance economic growth and at least partly protect themselves against the extraterritoriality of sanctions.
Relatedly, the BRICS states appear to be seeking diplomatic autonomy, taking a variety of positions on the war in Ukraine that are at odds with Washington’s preferred view (The Nation, 6/27/23) and not always in perfect sync with that of the “R” in BRICS.
In August, BRICS invited six new members to join: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates. More than 40 countries expressed interest in joining BRICS, while 23 formally applied to become part of the club (Al Jazeera, 8/24/23).
China too big?
Dozens of countries are trying to join BRICS, but clearly they don’t read Bloomberg (8/18/23).
The prospect of a group of nations almost entirely from the Global South working together to advance independent development sent the Bloomberg news service into attack mode. The outlet ran an op-ed by Howard Chua-Eoan (8/18/23) headlined “BRICS Is Broken and Should Be Scrapped.” His argument:
The big trouble with the BRICS is that China (with its still enormous economic clout) dominates the group—and Beijing wants to turn it into another global forum to echo its denunciations of the US and EU.
The assertion that China “dominates” BRICS is misleading. Three scholars (Conversation, 8/18/23) from Tufts University’s Rising Power Alliances project, which studies the evolution of BRICS and its relationship with the US, found that
the common portrayal of BRICS as a China-dominated group primarily pursuing anti-US agendas is misplaced. Rather, the BRICS countries connect around common development interests and a quest for a multipolar world order in which no single power dominates.
For instance, the authors note:
China has been unable to advance some key policy proposals. For example, since the 2011 BRICS summit, China has sought to establish a BRICS free trade agreement, but could not get support from other states.
Similarly, Shidore (The Nation, 8/17/23) points out:
In 2015, the five [BRICS] states founded the New Development Bank, with infrastructure financing and sustainable development as its focus. Although China’s GDP is more than twice that of the rest of the BRICS states combined, it agreed to an equal partnership on governing the bank and an equal share of subscribed capital of $10 billion each.
‘US economic leadership’
Bloomberg (8/29/23) blames the rise of BRICS on “the US turn away from economic leadership.”
In another article, Bloomberg’s editorial board (8/29/23) worried that BRICS’ expansion “could weaken existing channels of cooperation at a time when collective action on global threats has never been more urgent.” For the authors, the BRICS countries are “sidelining the existing institutions” of “global governance,” thereby making “genuinely multilateral cooperation harder.”
The editorial’s concern is not with developing international “cooperation” or “collective action on global threats” per se; its concern is with maintaining the current global system. The root of the threat to the status quo, the editorial maintained, was lack of US leadership:
It’s no coincidence that the BRICS-11 arrives following the US turn away from economic leadership—accelerated by Donald Trump’s administration and affirmed by Joe Biden’s. The IMF and World Bank are increasingly rudderless. The WTO is all but defunct, as good as shut down by US obstruction. The organizing principle of US policy is no longer global prosperity but “Made in America.” Emerging economies can be forgiven for seeking alternatives to a global order that seems to put them last.
The timing of this shift couldn’t be worse. Higher interest rates are adding to the financial stresses confronting many low- and middle-income countries. If a new global debt crisis lies ahead, the damage won’t be narrowly confined. The costs of climate change are mounting, and the efforts of the once-and-future BRICS in containing them will be pivotal. These challenges are unavoidably global and demand a cooperative global response.
All this makes the fracturing of the multilateral order truly dangerous. Prodded by the BRICS enlargement, the US and its partners should work urgently to repair it.
The editors are wildly misreading BRICS’ appeal. As Martin Wolf put it in the Financial Times (5/23/23), “What brings its members together is the desire not to be dependent on the whims of the US and its close allies, who have dominated the world for the past two centuries.” Likewise, Shidore (The Nation, 8/17/23) wrote:
The multiple failures of the US-led world order to substantially support two core requirements of Global South states—economic development and safeguarding sovereignty—are creating a demand for alternative structures for ordering the world.
Astrid Prange made a similar point in Deutsche Welle (4/10/23):
In 2014, with $50 billion (around €46 billion) in seed money, the BRICS nations launched the New Development Bank as an alternative to the World Bank and the International Monetary Fund. In addition, they created a liquidity mechanism called the Contingent Reserve Arrangement to support members struggling with payments.
These offers were not only attractive to the BRICS nations themselves, but also to many other developing and emerging economies that had had painful experiences with the IMF’s structural adjustment programs and austerity measures. This is why many countries said they might be interested in joining the BRICS group.
Contrary to the Bloomberg editorial’s claims, it’s not the US’s so-called “turn away from economic leadership,” or the stalling of the IMF, World Bank and WTO, that makes BRICS attractive. It’s precisely that the “multilateral order” Bloomberg refers to is US-led, and that the US has used its stranglehold on these institutions to exploit and control poorer nations.
The democracy problem(s)
Bloomberg (8/28/23) criticizes BRICS for lack of democracy; meanwhile, at the IMF, countries with 14% of the world’s population get 59% of the votes.
Bloomberg (8/28/23) also ran a piece by Giovanni Salzano, headlined “BRICS Enlargement Is Going to Worsen Its Democracy Problem.” The piece comments that, of the six states invited to join BRICS,
only Argentina can be considered a democracy—albeit a flawed one. That means the enlargement would leave the group dominated by non-democratic countries, with seven of them headed by hybrid or authoritarian regimes.
Leaving aside the “democracy problem” of states at the core of the US-led world system—such as Canada and the US itself—Salzano offers an overly narrow conception of democracy. He exclusively focuses on the internal political systems of the BRICS nations, ignoring whether BRICS might help address the dearth of democratic procedures in existing international organizations.
For example, as Al Jazeera (8/22/23) pointed out:
The five BRICS nations now have a combined gross domestic product (GDP) larger than that of the G7 in purchasing power parity terms. In nominal terms, the BRICS countries are responsible for 26% of the global GDP. Despite this, they get only 15% of the voting power at the International Monetary Fund (IMF).
BRICS countries account for roughly 40% of the world’s population (Reuters, 8/24/23) while the G7 is home to just 10% (FT, 5/23/23). Jason Hickel (Al Jazeera, 11/26/20) of the London School of Economics observed:
The leaders of the World Bank and the IMF are not elected, but are nominated by the US and Europe…. The US has de facto veto power over all significant decisions, and together with the rest of the G7 and the European Union controls well over half of the vote in both agencies. If we look at the voting allocations in per capita terms, the inequalities are revealed to be truly extreme. For every vote that the average person in the global North has, the average person in the global South has only one-eighth of a vote (and the average South Asian has only one-20th of a vote).
It’s too early to say whether BRICS will help countries in the Global South to develop on their own terms. But Bloomberg’s opposition to the group is probably a good sign.
