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What opportunities can the BRICS offer to the world?

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In June, French President Emmanuel Macron expressed interest in attending this year’s BRICS summit in South Africa. While not ultimately receiving an invitation, this action underscores France’s aspiration as a G7 member to break political barriers, strengthen cooperation with BRICS nations, and broaden its global influence. What makes the BRICS so attractive?

Boosting post-pandemic economic recovery

BRICS countries span across Asia, Africa, and Latin America, exerting significant regional influence. In recent years, bolstered by the collective ascent of developing nations, the distinctive status of the BRICS has risen prominently. These nations collectively encompass 26.46% of the world’s land area and represent approximately 42% of the global population.

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The economy of the bloc has undergone a substantial surge, rising from a mere 10% of the Group of Seven (G7), the world’s leading advanced economies, to an impressive 60% over the past two decades. Notably, the BRICS countries have demonstrated remarkable economic resilience throughout the pandemic.

Data compiled by Acorn Macro reveals that the BRICS now contributes 31.5% of the global GDP based on purchasing power parity, surpassing the G7, which has declined to 30.7%. With abundant resources and extensive land, the BRICS nations are emerging not only as stabilizers but, more crucially, as drivers of the global economy.

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Development has always been a central topic at BRICS summits. Despite the end of the COVID-19 pandemic, its lingering effects on the global economy will endure for years. Sluggish economic recovery, fiscal deficits, high unemployment, and inflation all pose significant challenges, demanding collective efforts to find solutions.

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One of the priorities of this year’s BRICS summit is to formulate a “BRICS Plan” that involves increased fiscal investment and monetary support, as well as packages of mutual assistance, to accelerate economic recovery and foster sustainable development.

Improving fairness in global economic conversations

While developing nations endeavor to establish their economic influence worldwide, global financial institutions have failed to keep pace with international developments.

Reforms in IMF’s governance are progressing slowly, with limited adjustments to quota shares that fail to match the expanding economic power of developing countries. In 2022, the collective GDP of BRICS nations reached $26 trillion, surpassing that of the United States. Nevertheless, their combined representation in terms of voting power and quotas at the IMF continues to be lower than that of the United States. The situation is even worse for other developing countries with very limited rights in expressing their own interests.

The existing international financial framework maintains its bias in favor of wealthy nations. United Nations Secretary-General Antonio Guterres noted that, amid the pandemic, the IMF allocated $280 billion to the affluent Group of Seven nations, with a total population of 772 million. In stark contrast, the least developed countries, encompassing a population of 1.1 billion, received slightly over $8 billion from the IMF during the pandemic. Guterres underscored that this reveals a disparity where the International Monetary Fund had prioritized the interests of richer nations over those of the developing world.

(Source: https://furtherafrica.com/2023/06/25/the-imf-and-the-world-bank-biased-against-developing-nations-un/)

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Given this context, it’s becoming evident that developing nations, notably African countries, are actively seeking alternatives to the Western-established financial system in order to push for a greater voice in the world economic governance. (See the comments recently made by the President of Kenya. Watch from around the 5th minute of the video: https://www.youtube.com/watch?v=ZNE1WaDdmwE)

BRICS nations strive to create a fair, representative global political, economic, and financial system. This commitment holds significant appeal for developing nations disillusioned with the current international order. Through institutions like the New Development Bank (NDB) and the BRICS Contingent Reserve Arrangement, BRICS offers financing to developing nations and emerging economies without imposing political conditions. Since the founding of NDB in 2015, the bank has approved 96 projects worth over $32 billion dollars for infrastructure and sustainable development projects across four continents. BRICS is emerging as a constructive force driving global economic growth and balancing power in the world economy.

Championing demands of developing nations and advancing global governance

Expanding membership tops this year’s BRICS summit agenda. Anil Sooklal, South Africa’s BRICS Affairs coordinator, cites over 40 countries eager to join, with 22 already applying. Why the surge? After all, the West is in theory more economically powerful in its ability to provide assistance to developing countries.

In fact, the United States was an early foreign aid provider and remains the world’s largest official development assistance contributor. Nevertheless, its aid efforts have often fallen short in effectively addressing recipients’ challenges. This is primarily because the provided assistance doesn’t align with the specific development needs of these countries.

Taking food aid as an example, research by 1998 Nobel laureate in economics, Amartya Sen, indicates a paradoxical link between food shortages in Africa and food assistance programs.

The arrival of shipments of food aid in assisted nations for people to purchase led to decreased incentive for local people to cultivate their land properly. Over time, aid funds were spent entirely on buying food, rather than developing local agriculture. This perpetuates dependence on aid rather than fostering self-sufficiency, ultimately hindering development.

In contrast, BRICS nations prioritize addressing the development needs of recipient countries, offering elements such as infrastructure development and advanced technology, which serve as tools for self-driven progress. Empowering developing nations for autonomous growth is the key to breaking free from the grip of hegemony and power politics, enabling genuine participation in global governance. The long application list for BRICS membership reflects the widespread recognition among developing countries of the need to champion for their demands of self-driven development.

Although the BRICS mechanism might not be fully mature on many fronts, its open, liberal, and equitable collaborative approach offers a viable path toward enhancing global governance, upholding multilateralism, and promoting world peace and development. Amid much turbulence and uncertainty, this year’s BRICS summit is expected to yield more significant results.

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About the author:

Jiawei Gao, a reporter and commentator with CGTN based in Beijing, covering China’s economic and foreign policy.

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