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Sunday, June 23, 2024

Will more BRICs save the world or more global power struggle?

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By Almami Fanding Taal

The Atom Bomb ended World War II with the surrender of Japan’s imperial army in 1945. Germany and Japan the main protagonists against the Allied powers of UK, USA, France and USSR switched over soon after the war to the ‘western democratic model’ with pacifist constitutions. In the famous Churchillian phrase the ‘Iron Curtain’ bifurcated Germany dramatizing in brick and mortar the bipolar era of global capitalism and global communism led by USA and USSR respectively.

The Berlin Wall came down in 1989 ushering in the last decade of the 20th century which saw the rise of the so-called Asian Tigers economies that have modelled themselves after the western capitalist systems. India in the wake of the assassination of Rajiv Gandhi intensified economic reforms and opened up to world markets and trade liberalization.

China was firmly ascendant in global markets after opening up following the death Chairman Mao in the late 1970s. In the same decade Apartheid was on its deathbed in South Africa while the USSR was finally dissolved, and Russia was engulfed by political instability and economic turmoil.

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The 21st century began with the United Nations Declaring the Millennium Development Goals with a mission eradicate global poverty and in relative peace and security. The United States of America was the de facto sole superpower in the last decade of the 20th century with the full support of its allies in NATO and with bases in Japan and South Korea. It was undeniable that the 20th century was the American century.

This uni-polar world order was spectacularly challenged by flying planes into the twin towers of the World Trade Centre in New York City on September 11, 2001, by the terrorist organization Al Qaeda led by Osama Bin Laden a Saudi National based in Afghanistan. The war on terror has been raging since then costing millions of lives and trillions of dollars while the global economy continues to be more interconnected and more dependent on commodities from the developing countries of Africa South America and Asia.

The term BRIC was originally developed in the context of foreign investment strategies. It was introduced in the 2001 publication, Building Better Global Economic BRICs by then-chairman of Goldman Sachs Asset Management, Jim O’Neill. The foreign ministers of the initial four BRIC General states (Brazil, Russia, India, and China) met in New York City in September 2006 at the margins of the General Debate of the UN Assembly, beginning a series of high-level meetings. A full-scale diplomatic meeting was held in Yekaterinburg, Russia, on 16 June 2009.

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The BRIC grouping’s 1st formal summit, also held in Yekaterinburg, commenced on 16 June 2009, with Luiz Inácio Lula da Silva, Dmitry Medvedev, Manmohan Singh, and Hu Jintao, the respective leaders of Brazil, Russia, India, and China, all attending. The summit’s focus was on improving the global economic situation and reforming financial institutions, and discussed how the four countries could better co-operate in the future. There was further discussion of ways that developing countries, such as 3/4 of the BRIC members, could become more involved in global affairs.

In 2010, South Africa began efforts to join the BRIC grouping, and the process for its formal admission began in August of that year. South Africa officially became a member nation on 24 December 2010, after being formally invited by China to join and subsequently accepted by other BRIC countries.

The group was renamed BRICS – with the “S” standing for South Africa – to reflect the group’s expanded membership. In April 2011, the President of South Africa, Jacob Zuma, attended the 2011 BRICS summit in Sanya, China, as a full member.

There is poetic justice in the fact that the latest expansion of the group was announced at their recent summit held in South Africa. The Argentine Republic, the Arab Republic of Egypt, the Federal Democratic Republic of Ethiopia, the Islamic Republic of Iran, the Kingdom of Saudi Arabia, and the United Arab Emirates to become full members of BRICS. The membership will take effect from 1 January 2024. Already speculation is rife as to what the new acronym for the group will be.

CRIBS could have been the name of the group, but it is not as sexy as BRICS. I & S are part of the name of the group which leaves A E U for the new additions, but I suspect the name of the group will remain unchanged  considering the long list of  applicant states ready to join this consequential group of powerful nations.

Reports indicate that 40 countries have shown interest in BRICS’ membership, with 22 having submitted formal applications.  Since 2009, BRICS has met annually at summit level, and is backed by several ministerial and expert councils. It has spawned two major institutions – the New Development Bank (NDB) to provide development assistance and the Contingent Reserve Arrangement that supports countries facing short- term balance-of-payments pressures. The NDB has already financed 96 projects valued at $33 Billion.

So, beyond the acronym what unites these countries geographically dispersed around four continents? Apart from Argentina, Brazil Ethiopia and South Africa all the other members of the group are in the ‘East’. All four are accepted as leaders of the global south and functioning multiparty democracies. India is considered the world’s largest democracy and with South Africa are members of the Commonwealth.

It is important to note that all members of the BRICS group are also members of the G20 except Ethiopia Iran and UAE. China and Russia are permanent members of the UN Security Council. The Gross Domestic Product of BRICS is now 36 percent of global GDP and 47 percent of the world population. This invested in global affairs means the national interests of the BRICS bloc are aligned to a significant degree to justify establishing a new global grouping to navigate the troubled waters of the first quarter of the 21st century.

The major impact will be on the energy sector: out of global oil production of about 90 million barrels per day (mbd) in 2022, the earlier five BRICS members had accounted for 20% of global output; this will go to 42%. The new BRICS members will bring considerable geo-strategic value to the grouping. Those from West Asia are already closely tied to BRICS members: 35% of Saudi oil production goes to China and India; Russia, already a major oil supplier to China and India, is now looking at Brazil as a market.

Despite sanctions by the United States, Iran has increased oil production from a low of 400,000 barrels per day in the Trump period to 2.2 million barrel per day in August this year, most of it going to China. Egypt and Ethiopia are an important presence in the strategically important Horn of Africa and the Red Sea, while Argentina is the second largest economy in Latin America.

Rather than seriously consider the issues raised at BRICS’ summits and other meetings, some commentators have disparaged the grouping as having no shared vision and being a “talk-shop” with no worthwhile achievements. These criticisms have little substance. BRICS leaders have met over 15 years and every time have overcome their internal divisions and competitions to issue a consensual “Declaration”.  Over the years, the declarations have expanded in content, focused on specific deliverables, and have steadily expanded their areas of interest.

The global economic order that the post-World War II bequeathed seems to outlive its usefulness in the new century with the rise of non-European powers, but it would be simplistic to conclude that the BRICS bloc was formed to serve as a countervailing force against the broad European tribes scattered around the world as a result of colonialism. And led currently by the USA with hegemonic pretensions and having its currency the USD $ as the de facto global currency.

However, the recent expansion makes it crystal clear that the BRICS Bloc is united in its discontent with the Judeo-Christian leanings of the international institutions that had emerged after World War II – the World Bank, the International Monetary Fund, the United Nations, and its various bodies, particularly the Security Council, and more recently, the World Trade Organization. At the Johannesburg summit, the UN Secretary General António Guterres described them as reflecting “yesterday’s world”.  The United States has led the western alliance in both the political and economic areas.

Thus, it is fair to say that BRICS challenges this West-led world order: and focused on promoting intra-BRICS economic and political cooperation, building institutions outside western control, and asserts robustly for comprehensive reforms to accommodate the presence and interests of emerging economies. The Johannesburg Declaration positively asserts that the members’ “strategic partnership” will be directed at achieving “a more representative, fairer international order”.

In the Johannesburg Declaration, while several paragraphs call for wide-ranging reforms in international organisations, the bulk of the document focuses on intra-BRICS cooperation and outreach to other developing countries. Thus, members have agreed to “encouraging the use of local currencies in internal trade and financial transactions” between BRICS and other trading partners. The Declaration also reflects the shared views of its members on several political issues — the centrality of the United Nations; the problems in West Asia, i.e., Syria, Yemen, Palestine, the Arab peace Initiative, and the Iran nuclear agreement; the war in Ukraine and global terror. The new BRICS members, particularly those from West Asia, naturally fit into this political and economic framework.

From 2020, both Saudi Arabia and the UAE have shrugged off the U.S. yoke and shaped independent foreign policy paths for themselves. Saudi Arabia has pursued de-escalation and dialogue, ending the Qatar blockade in January 2021, engaging with Turkey, and opening interactions with Iran from April 2021. These regional engagements culminated in the China-brokered accord with Iran in March this year. The UAE has also normalized ties with Iran and is focusing on expanding its maritime footprint across the Gulf, the Gulf of Aden, the Red Sea, and the Horn of Africa.

While western writers continue to harp on the emerging global binary divide and the “new cold war”, the African trio and other BRICS members should reject this short-sighted view and insist on asserting their strategic autonomy in a multipolar world order, with member-nations demanding that their voices be heard, and their interests respected. It is not surprising, then, that a recent media report described the Johannesburg summit as a “turning point in modern history”.

In the era of “global boiling” as UNSG Guterres memorably described the global climate crises compounded by global pandemics one wonders if BRICS can save the world?  Only cooperation can help the planet in an age of poly crises. In the era of energy transitions win-win partnerships will light the way to a decarbonised future.

With nearly half of the world’s population living in the BRICS nations the other half must hope that the bloc succeeds in improving the living standards of their people because in the era of globalisation success in any part of the world can be exported to the remotest parts of our planet. YES, WE CAN!

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