The Latest BRICS’ Expansion (But Probably Not the Last)
来源：www.iar-gwu.org;发表于:2024-04-10;人气指数:43
Wednesday, April
10, 2024
The Latest BRICS’ Expansion (But
Probably Not the Last)
By Kavin Pillai and Neeraj Tom Savio
On August 4th, 2023, the 15th annual
BRICS summit concluded in Johannesburg, South Africa. The headline of the event
was the group’s plan to expand its membership for only the second time in its
two-decade history. With Russia’s embroilment in the Ukraine war and China’s
increasingly strained relationship with the West, the decision to admit six new
countries to the group could not have been more consequential. In a move hailed
as “historic" by Xi Jinping, the leader of the world’s second-largest
economy and the driving force behind BRICS’ expansion, the addition of six new
members – most of whom are inching away from the West toward China – heralds
the beginning of a multipolar world.
For a long time, non-Western nations
such as China, Russia, and India have perceived institutions like the G7, the
IMF, and the World Bank as dominated by Western interests. Consequently, BRICS
Membership has emerged as an increasingly appealing option for the Global
South, with reports of 23 nations formally applying and an additional 40
expressing interest. This expansion represents the inauguration of an
alternative to the liberal international order and its attendant institutions,
one that would champion the interests of the developing world.
While there are no specific criteria for
BRICS membership, it is hardly a mystery. The inclusion of Saudi Arabia and
Iran, who recently normalized diplomatic relations in a historic China-brokered
deal, reflects the growing anti-Western posture that BRICS is quickly
acquiring. Joining alongside them are Argentina, Egypt, Ethiopia, and the
U.A.E., nations who have also grown disillusioned with the Western-led global
order. Argentina has since withdrawn its BRICS application as the newly
elected, libertarian Milei government has realigned itself with the U.S.
Ethiopia’s surprise inclusion reflects the nation’s recent fallout with the
U.S., which revoked trade benefits over the government’s conduct in the Tigray
War. Evidently, China is keen to exploit geoeconomic vacuums and draw countries
out of Washington’s orbit.
Geoeconomic interests were the prime
consideration behind the expansion. With Saudi Arabia and Iran joining the
table, two of the world’s largest petroleum exporters have partnered up with
India and China, two of the world’s largest importers of fossil fuel-based
resources. Given the divide between the Global North and South on the climate
agenda due to the complex logistics and high costs associated with a
progressive and necessary green transition, it is a struggle for countries in
the early stages of development to maintain a balance between energy security,
rapid economic development, and climate action. And so, the revamped BRICS
offers a potential platform for major resource exporters and importers to
collaborate on initiatives that address the unique needs of developing nations,
albeit at the expense of global efforts to combat climate change.
However, there is also a noticeable
pattern in BRICS expansion and geopolitical ambitions that go beyond economic
pursuits. Notably, each member has refrained from an outright condemnation of
Russia’s invasion of Ukraine, which in return provided energy at discounted
prices. By the second half of 2022, China and India’s purchases of Russian
energy resources accounted for 46.5% of Moscow’s total exports in the sector, a
21.5% increase from the year prior. Effectively isolated from global capital
markets, nations in Latin America, Africa, and Asia observed the comprehensive
sanctions regime imposed on Russia, fearing a similar fate might befall them
one day. With the U.S. dollar as the world’s reserve currency, Washington can
unilaterally exclude adversaries from international finance, as it did with
Iran and Venezuela.
Consequently, the “de-dollarization” of
the global economy has become a central theme in the BRICS agenda. Saudi
Arabia, China, India, and Iran have already experimented with this concept,
replacing the USD with the Chinese yuan and the Indian rupee in bilateral trade
of resources like oil, historically traded in USD, as part of their commitment
to the petrodollar economy. To take it a step further, Brazil’s President, Lula
da Silva, even floated a potential BRICS currency akin to the Euro, but several
members showed little interest, notably India, which is intent on bolstering
the rupee. South Africa’s Finance Minister went as far as to say that the idea
was not on the agenda. Moreover, there is skepticism over whether
de-dollarization is an attainable objective to begin with.
It is worth noting that not every member
appears entirely on board with this re-envisioning of BRICS. India and Brazil
maintain close ties with the West, their institutions, and particularly with
the U.S. Neither nation is pleased with the blatantly anti-Western optics,
which necessitates a delicate balancing act. India and China have frayed
bilateral relations, and Russia’s presence remains a contentious issue.
Internal discussions have indicated that Indian Prime Minister Narendra Modi
fears the bloc becoming an anti-American group.
The good news for the Modi Government is
that India has a significant policy opportunity within the BRICS+ bloc –
expanding the rupee’s use in bilateral and multilateral trade agreements.
Today, India benefits from an undervalued currency, making its exports more
competitive abroad. Nonetheless, its imports come with a hefty price tag, so by
trading in its domestic currency, India avoids the transaction costs associated
with currency conversion and foreign exchange. Furthermore, if members purchase
its goods and services in rupees, New Delhi can improve its trade balance with
its BRICS counterparts, especially its substantial deficit with China. With the
rupee’s increased circulation, India gains additional influence over the bloc’s
trade and economic policies. However, if New Delhi’s fears regarding Beijing’s
intentions hold true, then China will prefer to replace the U.S. dollar with
the yuan, opening the door to a potential clash.
However, BRICS members will inevitably
have to grapple with the lack of a coherent agenda and avoid the risk of policy
paralysis or a political impasse. Therefore, it is too early to say whether
this expansion will deliver on its promises. Abstract goals such as
representing “the voice of the Global South'' might make for splashy headlines,
but they raise questions of feasibility. Additionally, China’s vision for the
new world order likely differs from Iran’s or South Africa’s. What is certain,
however, is that America’s unipolar moment is over, and the emergence of BRICS
is a product of a changing balance of power that will define the coming
decades.
Kavin Pillai is currently pursuing a
Masters degree in Public Policy at the Graduate School of Public Policy under
the University of Tokyo, specializing in Public Management and International
Relations.
Neeraj Tom Savio is a Salzburg Global
Seminar Fellow and Master of International Affairs graduate from the Hertie
School’s cohort of 2023. He was also previously the Editor-in-Chief of The
Governance Post.
The International Affairs Review
Source: www.iar-gwu.org