Below are a few different articles and sources regarding the BRICS Summit taking place from 8/22 to 8/24. – Natylie
BRICS summit aims to challenge Western hegemony
The BRICS summit will attempt to create a new play in the world order amongst the members of the Global South that can challenge the Western hegemony
By Ben Aris, Intellinews, 8/21/23
On the eve of the BRICS summit, which got underway in South Africa on Tuesday (August 22), Russian Foreign Minister Sergey Lavrov wrote in an article for the local magazine Ubuntu that the meeting would begin the process of expansion of the bloc in order to create “a just world”.
Many outsiders have scoffed at the idea of the BRICS bloc (Brazil, Russia, India, China and South Africa) becoming a potent political force in the world as its member countries have little in common, other than they are big and underdeveloped.
Jim O’Neill, the legendary Goldman Sachs analyst who coined the term in 2001, called the idea of a political bloc “ridiculous” in a recent interview with the Financial Times. BRIC as a political entity was founded in 2006 in an inaugural summit in Russia’s Yekaterinburg. O’Neill pointed out that his original criteria for being a “BRIC” included being a big country, have a big GDP and have a lot of people.
By this measure, he says that South Africa, which joined in 2010, should never have qualified, as it is dwarfed by its peers, but an expanded BRICS would make more sense if the Kingdom of Saudi Arabia (KSA) is included.
However, the one thing that does unite all the countries is they are developing fast and feel that the emerging world is under-represented in the global architecture, which remains dominated by the developed world, led by the United States.
In other words, they agree with Russian President Vladimir Putin’s complaints about the “unipolar” world run by Washington and want a “multipolar” world where they have their proper say in how the world is run, given the EMs now collectively are richer than the West (in PPP terms) and have more people.
The salient point here is that increasingly the EMs are not “emerging” anymore. Countries such as Russia and China have already emerged, albeit with a lot of work left to do before they can be called “mature”.
In this context, this BRICS summit is extremely important as its members are just starting to work on how they will cooperate to counter the West. And “counter” is what they are going to do as the West has made it clear it is not willing to “cooperate”; the West feels it’s entitled to rule the world rather than embrace the new world on equal terms.
Several things point to these rising tensions. US Secretary of State Antony Blinken’s first policy speech naming Russia a “threat” and China a “rival”. French President Emmanuel Macron’s attempt to mediate in Ukraine, by suggesting not that the European Union embrace East and West but emerge as a “third superpower” – in other words, the EU joins the US as a co-hegemon.
What Putin has been arguing for (rhetorically at least) is a truly global community of cooperation and mutually beneficial trade and investment that is governed by something like the UN. The political models are also very different, which is another source of tension. Russia and China have rejected the so-called Washington consensus, where individual freedoms lie as a foundation, and are pushing a Moscow consensus alternative which emphasises the state over the individual, among other things.
However, Putin is the only one that has crystallised this rivalry to the point where he was prepared to go to war with the West and break off relations completely. Putin assumes that he can build a future by doing business with the non-aligned countries of the world. And while there is plenty of business to be done in the Global South, he has also reduced Russia’s growth potential as a result of sanctions and many economists believe the Russian economy will stagnate in the long-term as a result.
Building blocs
The desire of the emerging Global South to have a seat at the world’s top table and Russia’s clash with the West have catalysed some frenetic global diplomacy as Western and Russian diplomats are travelling the world trying to shore up support.
China is playing a major role in promoting the BRICS, as bne IntelliNews reported. Although it is Russia that is in direct conflict with the West, China openly challenged the US role as leader of the world with a three-day trip to Moscow in March, when Beijing openly backed Russia in its conflict with the West. China also released a 12-point peace plan for Ukraine on the anniversary of the start of the war, seeking to position itself as an impartial mediator in the dispute.
Together with Russia, China is actively promoting the idea of a BRICS bloc that can be extended to a BRICS+ group that can stand up to the existing US-led Western hegemony.
Africa has become an important part of this way and is relevant in a way that it was never before, as bne IntelliNews described in a deep dive titled “Russia in Africa”.
The confrontational nature of what the BRICS summit is intended to achieve has also been highlighted by the fact that both France and the US, amongst other Western powers, applied for accreditation to attend the BRICS summit and were refused.
Against that South Africa bent over backwards to allow Putin to attend in person, but an International Criminal Court (ICC) warrant for his arrest for kidnapping children from Ukraine meant that Pretoria would have been forced to arrest him if he did attend. In the end, he will join by video link.
None of the other countries in the Global South are prepared to follow Russia into open conflict with the West and would prefer to maintain their good relations with the West. South African President Cyril Ramaphosa was explicit the day before the summit started, saying Pretoria “will not choose sides in a fractured world.”
The Global South agrees with Putin that the West needs to be challenged but at the same time they concede they are still behind the West on many counts, so they want to continue to cooperate. The upshot is at the BRICS summit the Global South members need to work out how they can better work together to improve their collective bargaining position in future negotiations, as well as to make the basic decision on what sort of organisation BRICS wants to be: a trade club or a political challenger to the existing world order.
It’s not for nothing that the main debate at the meeting will be on who else to let in and what are the criteria for admitting new members.
On August 21, Nelson Kgwete, a spokesman for the agency, told TASS that leaders from over 40 countries would take part in the BRICS summit from August 22-24 and a decision may be made to expand this club from its original five members. Some 23 countries have submitted official applications for joining BRICS, according to the South African foreign ministry.
Who gets in and what the criteria will be to judge applicants remains the main item on the summit’s agenda. There is currently no consensus on how to admit new members, nor even what sort of organisation they are trying to build.
The frontrunners for membership are Argentina, Saudi Arabia and Indonesia. Iran’s application is also making headway, Iran’s deputy foreign minister for economic diplomacy, Mehdi Safari, said on August 1.
Iran is suffering from the same pariah status as Russia and even if it doesn’t become a full member of the BRICS, Tehran will continue to actively expand its relations with the group which have already begun, Iranian Foreign Minister Hossein Amir Abdollahian said on August 8.
Algeria is currently doubling its efforts to join the BRICS group of emerging markets as the North African country’s President Abdelmadjid Tebboune pushed for the move during a four-day visit to China in July. Morocco formally submitted an application to join in August, and Brazilian President Luiz Inácio Lula da Silva has been championing membership for Venezuela, another victim of US sanctions.
Yaroslav Lisovolik, a well-known Russian analyst and founder of BRICS + Analytics, says that the inclusion of Indonesia and the KSA are the most compelling, as of all the candidate regions of the Global South, only the Middle East and Southeast Asia are not represented in the BRICS core group.
Ramaphosa said on the eve of the summit that his country supports the expansion of the alliance. “An expanded BRICS will represent a diverse group of countries with different political systems that share a common desire for a more balanced world order,” he said. According to Ramaphosa, “the value of BRICS goes beyond the interests of its current members.”
But Ramaphosa added a common caveat, saying that his country “will not be embroiled in rivalry between world powers”, and adding that South Africa remains committed to a policy of non-alignment.
While all the BRICS members are open to expanding the group, very basic questions on how to go about this remain unanswered. India and China, in particular, have very different visions of what the bloc should look like.
The key question is: should BRICS be a club that protects only the economic interests of developing countries, or should it become a real political force that openly challenges the West?
China, which has openly supported BRICS expansion, along with Russia, wants the bloc to be political and to challenge the West directly. India, like South Africa, prefers the first option of mutual respect and improved commerce, and will work to avoid conflict with the West. Brazil has real qualms about an expansion, arguing that adding too many members would dilute the power and authority of the group.
Amongst the ideas being discussed include strengthening economic cooperation through the New Development Bank (NDB), TASS sources reported: countries admitted to membership of the development bank will be able to participate in various formats of the BRICS group without formally joining the group. Another concept involves the direct acceptance of new countries as permanent members of the association based on sponsorship by existing members.
And even if the political model is not adopted, the economic argument is compelling in its own right. In 2023 the BRICS countries will provide a greater contribution to global economic growth than the G7 countries – 32.1% versus 29.9%, reports Bloomberg. According to forecasts, by 2040 the BRICS countries will account for half of world industrial production – twice as much as the G7 countries. The global centre of gravity is already moving inexorably eastwards.
BRICS currency
The process of building an alternative to the Western hegemony amongst the members of the Global South is right at the start and it will face many practical problems. None highlights the challenges better than the problem of setting up an alternative currency to the dollar for international trade.
Russia and China want to de-dollarise their economies and have already gone a long way towards switching their mutual trade to national currencies. But the BRICS members have called for a new “BRICS currency” to be introduced similar to the euro.
The idea is popular with many countries, particularly those that have found themselves under US sanctions. Russia and China are already settling increasing amounts of their mutual trade in their own currencies. And the Iranian government has backed the creation of a gold-backed currency to compete with the US dollar, IRNA reported on July 9.
One of the unintended consequences of the SWIFT sanctions that were imposed only days after Russia’s invasion of Ukraine in February is the rest of the world has been unsettled by the realisation that the US can arbitrarily freeze their international reserves as so many countries have invested these reserves in US treasury bills that were considered to be the safest investment in the world. That is no longer true, and while the dollar remains the dominate currency for settling international trade deals, its share in sovereign international reserves has already started to fall.
However, the issue of introducing a single currency is not on the agenda of the upcoming summit. As bne IntelliNews reported, introducing a BRICS currency still faces many major hurdles and won’t appear anytime soon. What will happen at the summit is that many BRICS+ countries will agree in principle to the more active use of national currencies in trade settlements among themselves.
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Putin’s BRICS Speech
Link here. Written transcript here.
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Putin’s Speech At The BRICS Business Forum Was Fair & Balanced
By Andrew Korybko, Substack, 8/23/23
President Putin delivered a fair and balanced speech at the BRICS Business Forum on Tuesday that can be read in full at the official Kremlin website here. It defied the Mainstream Media’s expectations by only mildly criticizing the West but not haranguing it, while some multipolar supporters might have been dissatisfied with his moderate vision of the alternative economic-financial system that BRICS is building, which avoided the hype that many have pushed. The present piece will elaborate on this and more.
The Russian leader’s criticisms of the West concerned its irresponsible fiscal policies during the pandemic, illegal sanctions, and other unilateral violations of “norms and rules that not so long ago seemed immutable.” As for his observations about the emerging order, he focused mostly on BRICS’ growing use of national currencies in intra-organizational trade and investments, its role in facilitating the Global South’s development, and Russia’s two new logistics corridors across Eurasia.
Before going any further, some clarifications are in order regarding the impressive statistics about BRICS that President Putin shared in his speech, which are republished below for the reader’s convenience:
“The figures speak for themselves. Over the last decade, mutual investments among the BRICS countries have increased six-fold. Their overall investments in global economy have doubled, and their total exports have reached 20 percent of the world exports.
As for Russia, the trade volume with our BRICS partners has increased by 40.5 percent, reaching a record of over 230 billion US dollars. In the first half of this year, it grew by 35.6 percent compared with the same period in 2022 and constituted 134.7 billion US dollars.
I would also like to point out that the share of the BRICS countries, with their population totaling more than three billion people, now accounts for nearly 26 percent of the global GDP; our five countries are ahead of the G7 in terms of purchasing power parity (the forecast for 2023 is 31.5 percent against 30 percent).
The objective and irreversible process of the de-dollarization of our economic ties is gaining pace. We are working to fine-tune effective mechanisms for mutual settlements and monetary and financial control. As a result, the share of US dollar in export and import operations within BRICS is declining: last year it stood at only 28.7 percent.”
All of this is true, but left unsaid is that it’s largely attributable to China’s outsized economic-financial role in each of the other four BRICS economies.
The six-fold increase in mutual investments among the BRICS countries and their doubling of global investments isn’t due to Brazil, Russia, India, or South Africa. Rather, it’s the direct result of China’s Belt & Road Initiative (BRI) investments in BRICS (except India) and the rest of the world in the decade since this series of global megaprojects was unveiled in 2013. The same can be said about de-dollarization, which is mostly driven by the growing use of the yuan in bilateral trade with China.
To be sure, the ruble is also being used more frequently nowadays in the 18 months since the start of Russia’s special operation and the West’s imposition of sanctions, as is the rupee when it comes to India’s unprecedented imports of its decades-long strategic partner’s newly discounted energy. Nevertheless, this recent trend alone doesn’t suffice for explaining the impressive de-dollarization statistic that President Putin referenced in his speech.
The reader should also bear in mind that BRICS’ 20% share of global exports, more than three billion people, 26% of global GDP, and high purchasing power parity is largely due to China and to a lesser extent India, which is now the world’s fifth-largest economy and the fast-growing major one worldwide. If China was removed from these calculations, not to mention India as well, then BRICS’ statistics would be a lot less impressive.
These clarifications aren’t to suggest that BRICS is dominated by China nor that it’s doomed to fail in its noble goal of gradually reforming the global financial system, but simply to point out the leading role that the People’s Republic has thus far played in leading the aforesaid process. The other members and the rest of the Global South are eager to do more since they have a shared interest in equally shaping the emerging Multipolar World Order at this unique historical moment.
Unipolarity has indisputably ended after the West failed to coerce the Global South into complying with its demands to sanction Russia and arm Ukraine, but multipolarity has yet to fully form. It’s in the midst of this global systemic transition that BRICS is holding its 15th summit, hence why many have such high expectations about this event, some of which are unrealistic and were clarified by Russian officials here and here. President Putin’s speech shed more light on how Russia envisages everything unfolding.
From the Kremlin’s perspective, it’s imperative to expand logistics cooperation with China and India via the Northern Sea Route and the North-South Transport Corridor (NSTC) respectively since these three Great Powers’ RIC format serves as the de facto core of BRICS. The latter initiative is especially significant since President Putin also foresees it “providing opportunities to increase cargo transportation between Eurasian and African countries.”
On that topic, the Russian leader also reaffirmed that his country will remain a reliable provider of agricultural products, fertilizer, and energy to Africa, with this of course being facilitated by the NSTC and future logistics projects on that continent itself. Altogether, President Putin’s approach to BRICS can be summarized as prioritizing logistics cooperation with the group’s RIC core, diversifying Russia’s commodities-driven role in Africa’s development, and supporting more de-dollarized South-South trade.
The last part is where BRICS as a whole can help the most if its other members begin scaling their multidimensional engagement with the Global South (primarily Africa) in parallel with giving these same countries a greater say in the emerging financial system by formalizing the group’s relations with them. India and Russia are leading efforts to gently diversify from BRICS’ present Sino-centricity in all respects while Russian geo-economic guru Yaroslav Lissovolik’s BRICS+ concept satisfies the second objective.
All told, President Putin’s fair and balanced speech at the BRICS Business Forum went a long way towards correcting the slew of false perceptions that many have of this group and Russia’s vision of its future. He essentially conceptualizes it as RIC+ in the sense that Russia, India, and China are coordinating their efforts to accelerate financial multipolarity processes with a view towards creating an inclusive South-South integration platform. It’ll take time to complete, but everything’s moving in the right direction.