Can BRICS create a new world order? (2023)

These are huge economies, with larger populations and bigger ambitions. Leaders of the BRICS countries (Brazil, Russia, India, China and South Africa) will meet for a three-day summit starting on Tuesday, which is expected to attract the attention of capitals around the world.

Russian President Vladimir Putin will not attend the August 22-24 secret meeting in Johannesburg, South Africa, but will participate via video conference to avoid Russia hosting an international hostile incident in Moscow, an arrest warrant for the head of the International Criminal Court (ICC). Ukrainian war. South Africa is a member of the International Criminal Court and under international law South Africa is obliged to arrest Putin if he visits the country.

But while the conflict in Ukraine and heightened geopolitical tensions between the US and China form the backdrop for the summit, the BRICS meeting is likely to highlight the group's growing status as a force challenging the long-dominant Washington-dominated world order. .

BRICS expansion is expected to be high on the agenda. This is a popular club. From Algeria to Argentina, at least 40 countriesshow interest in joininggrouping.

The group's central appeal is its growing financial influence. The BRICS countries are currentlycombinedIn terms of purchasing power parity, the gross domestic product (GDP) is higher than the G7. Nominally, BRICS countries account for 26 percent of world GDP. They only win though15 %Voting in the International Monetary Fund (IMF).

In addition to dissatisfaction with this imbalance, the countries of the southern hemisphere are increasingly worried that the US could weaponize the dollar through sanctions, as it did with Russia. This has led the BRICS countries to individually and collectively try to reduce their dependence on the US dollar while simultaneously increasing bilateral trade in their own currencies.

It is one thing to agree that something needs to be changed, and quite another to agree on working together. India and China have been in a tense border conflict since May 2020. Meanwhile, India, South Africa and Brazil want friendly relations with the West, just as they want with China and Russia.

So, will BRICS be an alternative economic and geopolitical pillar for the US and its allies? Or do their internal differences limit what the team can achieve?

Short answer:Analysts say BRICS' influence may grow, but the grouping is more likely to offer partial economic and diplomatic alternatives to the US-led global order, rather than fundamentally replace it. That could still lead to heightened tensions with the West as the group's leaders seek to tread an independent path in a changing world. But to remain effective, BRICS must manage the divergent priorities of its members - a challenge that is not easy for the group.

Can BRICS create a new world order? (1)

"Voices" of the Global South.

In his keynote address at the BRICS foreign ministers' meeting in South Africa on June 1, Indian Foreign Minister Jaishankar described the current concentration of economic power as "putting too many countries in place of a few".

The sentiment is echoed across the developing world, where veto power in the UN Security Council is still limited to just five countries under an agreement reached at the end of World War II in 1945.

In recent years, cracks in the US-dominated model have deepened. As the dominant force in the global economy and military power, China is testing the limits of Washington's influence. IranianMinister of Foreign AffairsHussein Amir-Abdullahian visited Riyadh last week and met with Saudi Arabia's Crown Prince Mohammed bin Salman, the latest step in a significant normalization of relations between the traditional rivals in the Middle East.with the mediation of China.

Russia's all-out invasion of Ukraine in 2022 and the subsequent strengthening of ties between Moscow and Beijing—despite Western condemnations—further accelerated the split. India, Brazil and South Africa have carefully walked a tightrope, refusing to join Western sanctions or other actions against Russia, while distancing themselves from Moscow's casus belli.

While the Western footprint is shrinking in parts of the world (Niger and the Sahel are the latest examples), new Asian powers in Africa, Latin America and India are increasingly calling for a reversal of the post-Cold War unipolar system.

Russia and China claim to be the champions of moving away from the US-dominated order, whose rules Washington itself routinely mocks in the eyes of the Global South.

In July, Putin launched an all-out charm offensive at a summit of African leaders and officials in St. Petersburg, referring to Nelson Mandela as well as Jamal Abdul Nasser and Patrice Lumon. Names of anti-colonial heroes like Pakistan.

"I think it's time to right the historical injustices against the African continent," he said, discussing proposals to reform the UN Security Council and add African countries to permanent membership.

India is also actively pushing for the seat of the African Union at the G20 summit to be hosted in New Delhi next month.

"There is definitely room for a new world order," said Vivek Mishra, a fellow at the Observer Research Foundation (ORF), a New Delhi-based think tank. He said that this space was created by two factors: the global South is looking for its own voice and countries that can defend its interests, while Russia and China "parted ways with the West in unprecedented ways."

But Mishra said it is important to understand that the two factors do not overlap, even if they currently serve the same interests.

India, for example, does not see China as the voice of southern hemisphere countries, he said. Instead, New Delhi sees China acting as "a developed country trying to influence the narrative of the global south".

Separately, Russia's war in Ukraine and the resulting disruption of energy and food supplies have also contributed to rising inflation in developing countries, most damaging to the countries Moscow claims to represent.

Yet the West's response to the Russo-Ukraine war - effectively cutting Russia off from the global financial system through crippling sanctions - has also spooked developing economies, fearing that the US could wield such power over all of them.

Can BRICS create a new world order? (2)

follow the money

Alternative financial systems are at the heart of BRICS' appeal.

In 2015, the New BRICS Development Bank (NDB) - then the BRICS Development Bank - was established in Shanghai to give BRICS countries greater control over development financing and to contribute to the IMF's institutions under led by the US, such as the International Monetary Fund and the International Monetary Fund offer alternatives. The World Bank was founded after World War II.

Sanusa Naidu, a senior fellow at the Institute for Global Dialogue, a South African think tank focused on China and Africa, said the move showed real intent and told the global South that it was possible to challenge the architecture of the global financial system. .

BRICS countries have also built "BRICS Payment" - a payment system that allows transactions between BRICS countries without converting their local currencies to US dollars. But eight years after its founding, the New Development Bank is heavily dependent on the dollar and has struggled to maintain it amid sanctions against founding member Russia. in the globe,USD accounts for 60%Foreign exchange reserves of the central bank.

talk about aValute BRICS-aThe issue has gained momentum in recent months, although South Africa has made it clear that it will not be discussed at the summit. Gustavo de Carvalho, senior fellow for Russian-African relations at the Institute of International Affairs in Johannesburg, South Africa, said the BRICS de-dollarization initiative as a whole is not to replace the dollar, but to create alternatives to promote bilateral trade with their currencies.

The idea and commitment to others who want to join or work with BRICS is simple. With the threat of US sanctions, over-reliance on the US dollar for trade or debt service can be costly when the dollar strengthens – as it almost always has during the global crisis the world has been experiencing since 2020.

There is another reason to reduce dependence on the US dollar, according to de Carvalho. It could increase the influence of developing countries, serving as a "complementary tool" when "major decisions are made on development financing and the role of institutions such as the International Monetary Fund."

To understand the true "common view" of the BRICS members, he said, we need to scroll down in their joint statement to the section that always refers to BRICS influence, or lack thereof, within the World Bank or the IMF.

He said it was very frustrating that these parts of previous BRICS statements showed "despite being very large and influential economies" seeing their influence as "limited".

A potential way to make the EU impossible to ignore? Turn a selected club of five into a team of more.

Can BRICS create a new world order? (3)

power in numbers

In July, Algerian President Abdelmajid Teboun said Algeria wanted to join BRICS and even committed $1.5 billion to the BRICS New Development Bank - essentially buying a ticket to BRICS. In June, Egypt also applied for admission. And in the past year,ArgentinaSaudi Arabia and the United Arab Emirates have also emerged as candidates for EU membership, along with Indonesia, the world's fourth most populous country, and Nigeria, Africa's largest economy.

China, firmly in the lead, has made it clear that it is willing to explore the idea. Russia, which needs international friends, has expressed its readiness to welcome new members to the club.

However, not all members are convinced that a bigger BRICS is necessarily a stronger BRICS.

Brazil is silent on the expansion for fear that its influence could be reduced. "Enlargement can transform the EU into other countries," a Brazilian official told Reuters in early August.

Naidu said India was not comfortable with the issue of enlargement, although it was unlikely to veto any step. Instead, New Delhi is pushing the group to come together to set rules and standards for potential new members.

More generally, Naidu said, India believes the group needs to sort out its internal order before considering new members. This includes a three-year conflict between India and China involving thousands of troopsstationed along the disputed borderin eastern Ladakh. Indian Foreign Minister Jaishankar has repeatedly stated that relations between major Asian countries are "abnormal".

But Mishra also said China had shown signs of softening ahead of the BRICS summit, where military leaders from both sides recently pledged "maintaining peace and tranquility' along the border.

It is not clear whether Indian Prime Minister Narendra Modi and Chinese President Xi Jinping will meet during the summit. How the two largest BRICS economies manage their relationship could determine whether the bloc thrives or falters.

Can BRICS create a new world order? (4)

Not "either-or"

After all, a key strength of BRICS - and one that its members keep citing - is that, unlike the West, it does not expect other countries to choose a fixed alliance.

For example, trade within the BRICS in local currencies or with the United States in US dollars is not necessarily "either-or," de Carvalho said. For many countries, it may simply be a mechanism that serves their interests better in some cases.

In short, BRICS seeks to offer countries a parallel set of economic and diplomatic opportunities, rather than actively trying to destroy the US-led model. At a time when "global politics is so divided," he said, such thinking could be difficult for some, especially Westerners.

But BRICS is no stranger to being misunderstood.

When the BRICS countries were formed in 2009, Western diplomats who attended their first summit expressed "contempt," de Carvalho recalls.

Western rhetoric has since evolved into the view that BRICS is simply a China-gravitating bloc driven by an anti-Western agenda. Analysts say they may have been wrong both times.

It may soon be time to listen and accept that BRICS simply represents a growing global mood: that other countries also want a seat at the negotiating table.


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