Building BRIC by BRIC

At first glance, the planned BRICS expansion seems unlikely to radically reshape the geopolitical status quo. But against the backdrop of the Russia-Ukraine conflict and mounting tensions between China and the US, the move may well have wider implications for the existing global order, writes Rachel Richards.

The tectonic plates of global politics are forever shifting. Sometimes, those changes are almost imperceptible, while others are much more seismic. “The world is changing,” the South African President Cyril Ramaphosa said in his closing remarks at the annual BRICS summit in Johannesburg. “These realities call for a fundamental reform of the institutions of global governance, so that they may be more representative and better able to respond to the challenges that confront humanity.”

The three-day summit confirmed what had been anticipated for some time – that the BRICS group would be expanding its membership. With six new members joining its ranks as of January 2024, the bloc is more than doubling in size, giving a growing group of emerging economies a much louder voice on the global stage. Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates will be the first wave of new additions joining forces with the group’s core members of Brazil, Russia, India, China and South Africa. More will follow in years to come, as the newly beefed-up alliance looks to expand its influence ever further. Over 40 countries expressed an interest in joining the group ahead of the Johannesburg summit, demonstrating a growing desire among middle-income economies to move away from a western-led global order.

China’s Xi Jinping – the most vocal proponent of the group’s expansion – welcomed the move as a “new chapter of solidarity and cooperation” across the alliance. And while the wider membership certainly shows ambition, the expansion is not without its challenges. Already regarded as a somewhat disparate and divided group, the BRICS bloc is unlikely to become any more cohesive once its new members are brought into the fold. Far from being politically, economically or ideologically unified, the new entrants are a largely disjointed group, each with their own aspirations and burdens. With new agendas to accommodate and diverging interests to uphold, the newly-bolstered BRICS group may soon find that less is more.

Losing momentum

The BRIC acronym was first coined by Goldman Sachs chief economist Jim O’Neill in 2001, in an effort to capture the rising economic importance of Brazil, Russia, India and China. The transformation from academic idea to geopolitical institution began in earnest in 2006, with a meeting of the foreign ministers of the four founding BRIC states in New York City. The Russian city of Yekaterinburg played host to the first BRIC summit in 2009, with South Africa joining the group one year later – providing the ‘S’ to make the BRICS complete.

In the 2000s, the BRICS nations had one key ambition – to ensure a greater role for emerging economies in global affairs. There was palpable optimism surrounding the growth of developing countries in the first decade of the 21st century, with the BRICS nations in particular pipped for an astronomic economic rise. Led by China and its staggering and sustained growth, the BRICS nations largely met or exceeded economists’ predictions in the early 2000s, with their economies outpacing those of other advanced nations (see Fig 1). But, in the wake of the global financial crash, the BRICS economies started to lose momentum. By the late 2010s, Russia, Brazil and South Africa had experienced significant economic slowdowns, with China and India emerging as the two remaining bright spots in the BRICS bloc.

The group’s multilateral lender, the New Development Bank (NDB), has also achieved muted success since its launch in 2015. Touted as an alternative to the western-dominated IMF and World Bank, the NDB was created with ambitions of financing much-needed sustainable infrastructure projects across the global south. A worthy cause, certainly, but the NDB has been able to pay out just $33bn in approved loans since its creation almost a decade ago. The World Bank, by way of contrast, committed $104bn in 2022 alone.

Individually and collectively, the BRICS nations have somewhat underperformed in the past 10 years, with the notable exceptions of China and India. But that’s not to say that the BRICS bloc is insignificant on the global stage – far from it. Before the expansion, the group already represented 40 percent of the world’s population and more than 25 percent of global gross domestic product. There is no doubt that the alliance is a major force in global affairs – so why has it struggled to capitalise on its collective potential?

An uneasy alliance

Since its very inception, the BRICS group has been made up of seemingly strange bedfellows. Its founding members have little in common politically, economically or culturally, and internal tensions have left the bloc divided on a number of key issues, including the very question of expansion. While China has long backed the addition of new members, India, Brazil and South Africa have been less enthusiastic about throwing open the BRICS door, and have their own concerns over the bloc’s increasingly anti-US stance.

Indeed, while the six newest BRICS members may seem like a disparate and miscellaneous group on early inspection, a closer look soon reveals China’s influence. Newcomer Iran has been forging strong ties to Beijing in recent years, and signed a 25-year cooperation agreement with the superpower in 2021, committing the two nations to “political, strategic and economic” partnerships over the next quarter of a century. Fellow Middle-Eastern joiners Saudi Arabia and the United Arab Emirates have historically been allied with the US, but have been seeking to recalibrate their relationship with the west and establish themselves as global powers in their own right. This has drawn both nations closer to China, their largest trade partner. Similarly, Egypt and Argentina have strengthened their financial and trade ties to China in recent years, while Ethiopia is a key site for China’s ambitious Belt and Road initiative, receiving approximately $16bn in Chinese investment between 2000 and 2020. With tensions between the US and China at an all-time high, the decision to admit a string of countries with ties to Beijing may well increase the BRICS’ geopolitical tensions with the west in the months to come.

Along with potentially stoking external tensions with the G7-led west, the BRICS expansion could lead to further divisions within the group itself. Iran and Saudi Arabia are longstanding rivals, only recently restoring their diplomatic ties after a seven-year severance. While this tentative rapprochement is certainly welcome, the tense history between the two nations may make it difficult for the group to unite on shared goals moving forward. More members ultimately means more voices in the room, each with their own interests to uphold. And in the BRICS organisation, all decisions are unanimous, meaning that each and every member must agree before a motion can be passed. More seats around the table will likely make it more difficult to reach unanimous decisions – especially when there are already internal divisions at play.

An amplified voice

So far, the BRICS has demonstrated lofty ambitions but limited impact. But its expansion comes at a time of heightened geopolitical instability, with Russia’s invasion of Ukraine marking a new chapter in 21st century international relations. The outbreak of war in Europe has seen notable shifts in geopolitical alliances, as Russia and Ukraine seek to gather support from allies old and new. While Russia has become something of a pariah state in the western world, Moscow has received significant support from its BRICS partners. China and India have both ramped up trade with Russia since the invasion, with India’s imports alone surging by 400 percent since Russian troops entered Ukraine. This uptick in BRICS bloc trade has allowed the Moscow military machine to press on despite unprecedented western sanctions on the nation, undermining the US-led support operation for besieged Ukraine.

Politically speaking, the BRICS core members have adopted a neutral position on the Russia-Ukraine conflict – with the exception of China, which voted against expelling its northern neighbour from the UN Human Rights Council in 2022. However, this neutral stance, coupled with an uplift in BRICS trade with Russia, has been interpreted by some critics as implicit support for the Kremlin’s campaign. Whether there is any truth to this or not, the Russia-Ukraine conflict has placed the BRICS in a more explicitly political position than ever before.

The group is no longer purely interested in promoting the economic interests of the developing world. Politics has seemingly risen to the top of the BRICS agenda, and with its upcoming expansion, the group’s sphere of influence is greater than ever before. While its internal divisions may initially pose a barrier to any meaningful collective action, the group’s growth shows that it is setting itself up to be a real alternative to the western geopolitical status quo. It is simply too large and too loud to be ignored any longer. And with a long list of developing nations looking to join the club, the BRICS group is certainly carving a space for itself on the global stage.

Source: www.worldfinance.com