Who would have expected that the BRICS nations could rise as the potential rival of the G7 countries? But that once seemingly distant possibility now has real prospects which could change the political equilibrium of world politics.
BRICS is an acronym for Brazil, Russia, India, China and South Africa. It was supposedly coined by the Chief Economist of Goldman Sachs in 2001, as a reference to the world’s emerging economies. It was then known as BRIC, with the ‘S’ added later, when South Africa formally joined the group in 2010.
BRIC’s first official summit took place in 2009. Then, the discussion seemed largely abstract. However, not until 2014 did BRICS begin taking serious steps towards greater integration, when the nascent alliance, now including South Africa, launched the New Development Bank with seed money of $50 billion.
This decision meant that the group was now ready to take its first practical steps in challenging the dominance of the West over international monetary institutions, namely the World Bank and the IMF.
Driving force behind the expansion
The geopolitical global conflict, thus shifts, resulting from the Russia-Ukraine war, however, proved to be the driving force behind the massive expansion underway at BRICS, especially as financially powerful countries began showing interest in the initiative. They include Argentina, UAE, Mexico, Algeria and, particularly, Saudi Arabia.
Recent financial reports suggest that BRICS is already the world’s largest gross domestic product (GDP) bloc in the world, as it currently contributes 31.5% to the global GDP, ahead of the G7, which contributes 30.7%.
One of the greatest opportunities, and challenges, facing BRICS now is its ability to expand its membership base while maintaining its current growth. The issue of helping new members maintain economic and political independence is particularly vital.
The IMF is sometimes questionable for stipulating their monetary support of countries, especially in the Global South, on political conditions. This position is often justified under the guise of human rights and democracy, though is entirely related to privatisation and opening markets for western investors.
As BRICS strengthens, it will have the potential to help poorer countries without pushing a self-serving political agenda, or indirectly manipulating and controlling local economies.
A political struggle
As inflation is hitting many western countries, resulting in slower economic growth and causing social unrest, nations in the Global South are using this as an opportunity to develop their own economic alternative. This means that groups like BRICS will cease being exclusively economic institutions. The struggle is now very political.
On March 30, Brazil and China announced a trade agreement that would allow them to use the two countries’ national currencies, the yuan and the reais, respectively. This step shall prove consequential, for it will encourage other South American countries to follow suit. But that move was neither the first, nor will it be the last of its kind.
One of the main decisions by finance ministers and central bank governors of the Association of Southeast Asian Nations (ASEAN) following their March 30-31 meeting in Indonesia is to reduce their reliance on the dollar. They agree to “reinforce financial resilience … through the use of local currency to support cross-border trade and investment in the ASEAN region.” This too is a game-changer.
The BRICS countries, in particular, are leading the charge and are set to serve as the facilitator of rearranging the world’s economic and financial map.
While the West remains wary of the changes underway in the Global South. Washington and other western capitals are worried. Following a meeting between US President Joe Biden and 40 African leaders at the White House last December, it was clear that African countries were not interested in taking sides in the ongoing war in Ukraine. Consequently, US Vice President Kamala Harris flew to Africa on March 26 to meet African leaders.
To argue that BRICS is a purely economic group is to ignore a large part of the story. BRICS’ expansion, the discourse of its members, potential members and allies indicate that BRICS has become the South’s new platform for geopolitics, economy and diplomacy.
Though some western politicians and media insist on downplaying BRICS’ role in shaping the new world order, the change seems to be real and irreversible.
Dr Ramzy Baroud is a journalist, author and editor