Saturday, April 20, 2024

BRICS’ Type of Multipolarity is Not a Solution for the Global South

The announcement of BRICS enlargement in August 2023 was met with excitement and enthusiasm by the Global South. As the expansion officially took place in the beginning of 2024, the news outlets throughout the developing world praised the expansion of the grouping as a step toward the multipolar world order. However, the excitement among new and aspiring members is premature. For now, BRICS remains an exclusive club, which hardly represents the Global South. Moreover, the expansion is likely to render BRIC less functional politically as consensus-based decisions would be much harder to achieve. Furthermore, even if the sole purpose of the organization revolves around the development of the alternative global order, the current membership composition of the states which are used to hedging their positions would not make BRICS a balancing mechanism against the Western-based global order.

The BRIC was founded in 2009, acronymized for Brazil, Russia, Indian and China, and became BRICS the following year with the admission of South Africa. The grouping was initiated by Russia, which, at the time, faced the first wave of isolation following its invasion of Georgia. Designed as an economic cooperation mechanism, BRICS remained on the margins of global politics during its earlier years. During the second decade of the millennium, as the regional powers had strong incentives to cooperate with the west, the BRICS continued soul-searching with little tangible results.

The recent 2024 enlargement took place amid renewed isolation of Russia and growing rift between China and the USA. After Argentina opted not to join, BRICS welcomed Iran, Saudi Arabia, Egypt, Ethiopia and the UAE. Admission of the actors who play key roles in their regions suggested continuity with the original BRICS composition. Furthermore, the presence of oil rich and labor deficient Gulf states should technically be beneficial for developing parts of the world, particularly South Asia. However, Saudi Arabia and UAE, with the 6th and 20th GDP per capita in the world, can hardly serve as equal representatives of the Global South.

Proposed in 2012, BRICS lending institution, the New Development Bank (NDB), began operating in 2016 and by January 2024 listed a portfolio of some seventy projects, only sixteen of which had been completed. Among the latter, COVID relief aid was counted as a separate project in each country and none of the remaining projects carried any serious economic, energy-related or infrastructural significance. In 2024, the NDB membership remained exclusive to its founding member states, and the projects in its portfolio, were implemented only in one of the five member states. In contrast, the Asian Infrastructure Investment Bank, which started lending the same year had a portfolio of over 300 projects dispersed through dozens of its members, clearly more representative of the Global South.

The NDB expansion has been discussed independently of BRICS expansion, and powerful economic players from distinct regions, UAE, Kazakhstan and Indonesia, had been considered for joining. However, each potential direction would detract from the NDB’s development function. The gulf region is capable of attracting investments from the local actors. Central Asia hosts other lending initiatives and has never been the region where major powers, particularly Russia and China, managed to cooperate on development. Similarly, South East Asia is where China’s and India’s interests often diverge, as despite the rhetoric of cooperation, both Asian giants often see their engagement in Indo-Pacific as a zero-sum game.

Aside from weak lending dimension, BRICS remained in nascent stages for developing any sort of alternative to already existing trade agreements between its members in their immediate neighborhoods. All of these initiatives, such as RCEP, MERCASUR, EEU, SAARC have had variable degrees of functional capacity. It is naive to assume that BRICS can serve as a viable alternative to the already established regional trade blocs. Moreover, despite multilateral rhetoric, economically BRICS is grounded in China, as trade relations of all the members with the world’s second economy remain dominant. China’s smallest total trade with South Africa (56.7 billion) is larger than the next largest trade relation in the grouping – between India and Russia. A trade agreement within BRICS would further tilt the scale on China’s side, which would defy the idea of the multipolar global order, so actively propagated by BRICS members. Aside from Russia, whose options for cooperation with economically developed liberal democracies have dwindled, other original BRICS members continues to benefit from cooperation with the rest of the world.

Finally, BRICS is not a threat to the US Dollar even if it further facilitates transactions between the members in existing currencies. The launch of digital payment system to serve as the alternative to SWIFT has been proposed to take place by 2025, but, in addition to political uncertainty, practical challenges make implementation highly questionable. Dollar remains the preferred currency for trade between the BRICs members. Brazilian and South American currencies, while relatively stable, have limited supplies even in each of the country’s immediate neighborhood. Indian Rupee’s vulnerability has prevented it to become a medium of exchange, so that even India-Russia trade utilizes dollars. Russian ruble is heavily impacted by the western sanctions. In theory, considering the size of Chinese economy and the volume of international trade, Chinese yuan is the only BRICS currency that has potential to develop high degree of convertibility, essential to serve as a medium of exchange between the third parties. Even though the use of yuan in certain transactions between China and other members increased, the use of yuan among the third parties is not practical. Chinese government control and regulation of the currency prevents convertibility and limited amount of RMB outside of China complicates practicality of its adoption.

Finally, economic disparity between the BRICS members is so wide, that any uniform direction based on development seems unrealistic. While China’s and India’s economies remain strong even despite economic cycles, South African and Brazilian economies have been fluctuating in downward protectory, and Russia’s economic performance is highly uncertain amid transition to the war-based economy and continuous sanctions. The enlargement brings a similar set of diversity, with solidly performing UAE and Saudi Arabia, uncertain Egypt and Ethiopia, and struggling Iran. The stronger economies may pull the weaker ones up, but they may also sink them further through asymmetric relationships of some sort of neocolonial nature. Both China and the Gulf states have not always maintained equal relations with their Global South partners.

Lack of clear and measurable economic incentives still allow for BRICS’ political functionality, but the grouping neither represents the Global South nor is able to serve as a unified political block. Before the expansion, the membership contained only regional powers. Each of them might be seen as a big brother in one’s respected neighborhood, except that the role of a big brother often comes with a role of a bully. There is a reason none of the BRICS major powers managed to create robust multilateral organizations in their traditional regions. The CIS that emerged after the breakup of the Soviet Union has become dysfunctional. The Eurasian Economic Community initiated by Russia had not been a story of success even before Russia’s invasion of Ukraine. The SAARC has had a less than impressive track record because of traditional distrust on the subcontinent. Sluggish and rigid bureaucracy prevents South African Development Community from achieving its ambitious regional integration goals. Northern East Asia does not boast functional regional organizations, but China’s East Asian neighbors hardly represent Global South to begin with. In South America, UNASUR has had a bumpy ride, where Brazil’s leadership has been inconsistent. Lack of success of these organizations is a clear sign of the smaller states’ apprehension of their big brother, and it is credulous to view regional powers as champions of the rights of their neighbors.

At the same time, new members bring the same type of baggage that had prevented BRICS from becoming more than just a forum. Consensus-based decision making based on, so called, lowest common denominator, does not work well with a group where each state harbors regional ambitions. Arguably, such style of decision-making began to work for ASEAN after decades of mutual reassurance. The same did not work for other loosely institutionalized regional institutions, such as the Shanghai Cooperation Organization which contains three of the BRICS members, Russia, China and India. In twenty years of existence the SCO failed to initiate a trade agreement, create a multilateral energy cooperation scheme, resolve regional water disputes or facilitate cross border movement. The SCO worked largely as a discussion platform even before India and Pakistan’s accession. BRICS could comfortably remain a discussion forum in its initial format, where regional hegemons’ dominance is not questioned. Nevertheless, the enlargement is likely to bring new challenges to the consensus-based decision-making process, the same way the SCO’s expansion undermined its coherence.

With the enlargement the lowest common denominator becomes higher, and the level of agreements becomes lower. As the new members joined BRICS seeking to enhance their interests through cooperation with non-Western major powers, their grievances with each other has not disappeared overnight. Just as well the nature of their economic and political relations with the west would not change immediately.

Original BRICS had only one relationship with non-reconciled differences, which is that between India and China. The two have territorial disputes in Kashmir and Southern Himalayas, do not see eye to eye on the Indian Ocean littoral presence, question the degree of each other’s engagement with smaller South Asian states and generally endure competitive relationship, which requires continuous careful management. These relations have been going through peaks and troughs from the early days of the two Asian giants statehood, from when the two celebrated third world non-alignment in Bandung in 1955, but then fought a brutal border war seven years later.

The new members will bring additional discontent to BRICS. Saudi Arabia and Iran have only recently re-instated diplomatic relations, but the baggage between the two contenders for regional dominance remain. Ethiopia’s intentions to recognize Somaliland, and UAE’s support of this move are strongly condemned by Egypt. The quest for leadership in the Arab world remains contested. Although the geographic nature of the expansion appears to bring BRICS’ focus to the Middle East, the recent increase in the volatility of the region would create even more difficulties to reach consensus among all the BRICS members. Furthermore, each of the great regional powers is likely to pursue and maintain its own channel to secure influence in the Middle East. Indian Prime Minister Modi’s recent trip to the region is just one of the examples.

Finally, the new grouping will have trouble delivering a unified front toward the multinational world order. As Russia and Iran are likely to remain outcasts of the west-dominated geopolitical system, and China is powerful enough to question it, the rest of the BRICS member, both existing and new still have strong interests vested in the relations with the USA and other liberal democracies of the G7.

In February 2024 new announcements suggested that BRICS would be expanded by some additional two dozen members at the end of the year. The ambition to turn into a neo-Non-Aligned Movement is neither practical nor functional. First of all, BRICS is far from non-aligned. The rhetoric of multipolar world order is just another way of phrasing the intention to shift the pole away from the West. Additionally, while NAM might have prevented polarization in South Asia and Africa, the movement did not stop multiple conflicts on the continents. As the risks of the spillover of regional conflicts in the Global South have become increasingly pertinent most recently, the focus on cooperation and peace-building is more critical than non-alignment.

Ironically, the Global South does not need a major grouping to influence global politics. Smaller states have consistently punched above their weight to meet their interests. Mascaraing alignment with non-western powers as non-alignment would neither strengthen their positions nor make the world a safer place.

Published by arrangement with South Asia Foresight Network.

 

Author profile
Peter Krasnopolsky

Peter Krasnopolsky is a scholar and an educator specializing in Eurasian politics. He received his degrees from Rutgers, Nanyang Technological University, and the University of Nottingham. He has published a book on major powers engagement in Central Asia. A Ukrainian-American, Peter had lived in Beijing for ten years. He had travelled extensively through China and Central Eurasia, maintaining a strong preference for unpaved roads.  This article is published as an SAFN Guest Essay and gives the views of the author, not the position of the SAFN.

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