BRICS Confusion is Rather Evident

Well, though still in the weekend, I must admit this Post is a bit late, though still available, I hope, for an enjoyable weekend read.

So, I was not planning to target the BRICS South Africa gathering a second time in this Alan’s Newsletter Post, at least not quite this soon. However,  the decisions taken, or not taken in some cases at this most recent BRICS Summit in Johannesburg South Africa was too ‘juicy’ to ignore.  As pointed out by Rajiv Bhatia of India’s Gateway House now, more than ever the diplomatic balancing act for the new and enlarged BRICS presents an even more dramatic challenge for this Leaders’ Summit:

As BRICS heads into its 18th year, [the South Africa Leaders’ Summit is the 15th] its success and way forward will depend on the members’ ability to tackle the principal challenge of retaining its internal solidarity while balancing expansion and its impact and influence in the world.

And that central point – retaining its internal solidarity while balancing expansion – is hard to foresee. There is confusion over who was chosen to add and indeed whether they have agreed to join, and what conditions; there is confusion over the choices themselves; and there is confusion over what the enlargement is likely to mean for this Leaders’ Summit.

It is evident that the enlargement has added heft to an already significant leaders’ group. As Bhatia points out:

As a grouping of five nations, BRICS represents 27% of the world’s land area, 42% of the population, 16% of international trade, 27% of global GDP in nominal terms, and 32.5% in PPP terms.

Now the group, according to, Bhaso Ndzendze in The Conversation , is:

The enlarged grouping will account for 46.5% of the world population. Using IMF GDP data, we can deduce that it will account for about 30% of global GDP.

On a PPP basis apparently, it will represent 37 percent of global GDP according to James Kynge in the FT.

So, six countries were identified as joining the BRICS come January 2024: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and Iran. JIm O’Neill, formerly of Goldman Sachs,  who has been tagged for creating the BRICS acronym suggested this about the enlargement:

… I have questioned the organization’s purpose, beyond serving as a symbolic gesture. Now that the BRICS has announced that it will add six more countries – Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates – I pose the question again. The decision, after all, does not appear to have been decided on any clear objective, much less economic, criteria. Why, for example, was Indonesia not asked? Why Argentina and not Mexico, or Ethiopia and not Nigeria?

All good questions. Now the list, I would suggest, seems to reveal that China and Russia prevailed in the choices agreed to. Why, I suspect that is, is the BRICS enlargement includes Iran. As the NYTimes pointed out in its article on BRICS expansion:

The inclusion of Tehran — which has antagonistic relations with China’s chief rival, the United States — suggests that Chinese and Russian pressure had succeeded over the qualms of members like India, Brazil and South Africa, which maintain friendly ties with the West.

It is not unreasonable to suggest that adding Iran can only heighten the geopolitical tensions between the BRICS and others – most notably the G7, and most particularly the US with its many Iran sanctions.

Nevertheless, the hosts and commentators as quoted in the NYTimes again, tried to put the best face on it:

… South Africa, sought to put a hopeful spin on the enlargement decision in any case.

Anil Sooklal, South Africa’s representative in the BRICS negotiations, told reporters that the group needs to change with the times. “This is what BRICS is saying, let’s be more inclusive. BRICS is not anti-West,” he said.

And then of course there is the boosterism from the South Africa President, Cyril Ramaphosa as well (FP):

BRICS has embarked on a new chapter in its effort to build a world that is fair, a world that is just, a world that is also inclusive and prosperous,

As for Indonesia, an obvious choice for the BRICS to draw closer to ASEAN and Southeast Asia more  broadly. Why was it not part of the enlargement group? It would seem that Indonesia has not yet decided whether it wants membership. It has not submitted, apparently, a letter of intent. Also, it appears, notwithstanding the announcement that the UAE, in fact, has not decided whether to accept the BRICS invitation, though I suppose in the end it will.

And then there is – Argentina.  Argentina remains mired in a dreadful economic crisis. If in the end new members will be asked to contribute capital to the most important BRICS creation, in my opinion, the New Development Bank (NDB), Argentina is far more likely to ask for support than to be able to contribute support. In the end, I suspect it was Brazil and its current president, Lula that pressed for membership to be extended to Argentina.

As just noted, the most notable significant BRICS achievement, in my opinion, has been the creation of the NDB. There  was some indication that the expanded members would all be required to contribute to the NDB.  And that still may occur.  Still, it is disappointing that not more was mentioned of the NDB by the current announcements.

There was, also, a fair bit of reporting, and loud statements prior to the conclusion of the Summit, that suggested the BRICS might well take steps to create some form of common currency, or steps at de-dollarization by the BRICS. But as was pointed out by Henry Poenisch in OMFIF:

declaration released at the gathering in Johannesburg on 24 August made no mention of a common currency and instead focused on bilateral clearing – the second-best option. It stressed the importance of ‘encouraging the use of local currencies in international trade and financial transactions between Brics as well as between their trading partners.’

Yet, it seems to me the enhanced use of local currencies, except possibly the Chinese renminbi, is a rather questionable proposition. Using some of the local currencies available, and then holding the surplus for future use doesn’t seem a rather appealing course of action.

Finally, what most commentators failed to point to in their descriptions of the enlargement of the BRICS is that two of the six new members – Argentina and Saudi Arabia – are already members of the G20, as of course are all of the original BRICS. Rather than contemplating the consequence of the enlarged BRICS for global policy progress, it strikes me targeting the efforts, and today’s evident hardships in advancing global governance in the face of rising geopolitics by focusing attention on the G20 might well be a more fruitful avenue of inquiry if one was examining global summitry and the efforts to advance global governance. Looking again, at Jim O’Neill he turns, not reasonably, in this direction:

What the world really needs is a resurrected G20, which already includes all the same key players, plus others. It remains the best forum for addressing truly global issues such as economic growth, international trade, climate change, pandemic prevention, and so on. Though it now faces significant challenges, it still can reclaim the spirit of 2008-10, when it coordinated the international response to the global financial crisis. At some point, the US and China will have to overcome their differences and allow the G20 to return to its central position.

This was originally posted at my Substack ‘Alan’s Newsletter’ You can view there and you are free to subscribe as well.
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Image Credit: France 24

Puzzling over BRICS Enlargement

As Global Summits go, and besides the leader-led summits, G7 and the G20, there is nothing with greater presence, and possible impact in international relations, than the BRICS. As noted by Ndzendze, Bhaso, Siphamandia Zondo (2023) in their recent article in The Conversation on the state of the BRICS: 

What began in 2001 as an acronym for four of the fastest growing states, BRIC (Brazil, Russia, India and China), is projected to account for 45% of global GDP in purchasing power parity terms by 2030. It has evolved into a political formation as well.

It is the political impact that is most interesting and, I would say, somewhat puzzling. For the BRICS club – Brazil, Russia, India, China and South Africa – all are members of the G20.  Like the G20, and for that matter the earlier created G7, the BRICS represent a ‘leaders club’ that is a leader-led global summit that has an annual meeting of those leaders – the centerpiece of the year-long hosting by one member or another. In some respects the BRICS are unique in what the group is not. That is, unlike the G7, the BRICS members have no  evident ideological dimension – neither democratic nor autocratic. Instead it appears to see itself as focused on opposition to US hegemony in the current global order and they appear to demand a greater development focus and attention to the Global South. Again, as pointed out by Bhaso and Zondo: 

Crucial to this was these countries’ decision to form their own club in 2009, instead of joining an expanded G7 as envisioned by former Goldman Sachs CEO Jim O’Neill, who coined the term “Bric”. Internal cohesion on key issues has emerged and continues to be refined, despite challenges. … Ever since, the grouping has taken on a more pointedly political tone, particularly on the need to reform global institutions, in addition to its original economic raison d’etre. 

Now, it is not that there haven’t been efforts to enlarge these informal leader-led institutions  – to draw in the systemically important Global South players – China, India, Brazil – and other regional powers, Turkey and Indonesia for instance.  Obviously, the G20 is the evident case. Still, it would seem that the BRICS members resisted absorption in the G20, indeed, just at the G7 members – Canada, France, Germany, Italy, Japan, UK and the U.S., and also the EU, failed to wind up the G7 and ‘live’ in an enlarged G20 after the Global Financial Crisis (GFC) in 2008. Though there has been constant academic and expert discussion over absorption, enlargement and continuing separation, there continues to be both a G20 and a G7 a G20 and a BRICS. Again my SOAS colleagues focussing on the BRICS suggest: 

Some may even bring destabilising dynamics for the current composition of the formation. This matters because it tells us that the envisioned change in the global order is likely to be much slower. Simply put, while some states are opposed to western hegemony, they do not yet agree among themselves on what the new alternative should be.

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The Shanghai Cooperation Organization: “Symbolically significant”, for now

The Shanghai Cooperation Organization (SCO) leader-led summit was held in Samarkand in this September. It brought global attention to the group first established by Beijing at the start of the 21st century. Not only was it Xi Jinping’s first trip outside the country since January 2020, with the ongoing war in Ukraine, but the meeting was also an opportunity for a sit down between Xi and Putin on the margins of the summit. That meeting was the immediate point of interest for the global media. In Samarkand, India’s PM Modi was openly critical of Russia as he tried to carve out a leadership position for the South Asian republic. While commentators noted that PM Modi did not hold a bilateral with President Xi indicating that the warmth of 2018’s Wuhan Summit between the two has not yet been rekindled.  Iran participated for the first time with the group now representing 40 percent of the world’s population and nearly a third of global GDP and all of which, barring India, are decidedly illiberal regimes.

While the SCO has more than two decades of existence, the summit is of interest not just because of the high-level leader diplomacy but on the peculiar qualities of a multilateral institution that is often neglected by Western scholars and analysts.

The SCO was established in 2001 by the People’s Republic of China (PRC) with the intention of providing stability to the former Soviet Central Asian spaces with a particular focus on cooperation to combat what the members called the ‘three evils’ of terrorism, separatism and religious extremism. This initial motivation reflected China’s broader concerns about counterterrorism and Islamic extremism in the early 2000s as well as long term anxieties Beijing has had about the threat to the Communist Party of China (CPC) rule at the peripheries of the China.

The initial work of the SCO focused on coordinating the members’ security policies and sharing information, as well as conducting regular military exercises. The group added narcotic trafficking to its counterterrorism agenda and began to talk about economic collaboration and had periodic rhetorical flourishes about global governance and international order. From its initial membership of: Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, the SCO has expanded to include India and Pakistan in 2017and now Iran.

While the SCOs public diplomacy has been wide ranging, the group was, and remains at its heart, interested primarily on matters of international and transnational security. Yet as many analysts point out, Beijing and the members often appear disinterested in many quite obvious regional security matters, the most immediate example of which is the deadly clash between Tajikistan and Kyrgyzstan taking place barely 200 km from the current Summit which elicited neither comment nor action from individual leaders or the group as a whole.

Multilateral institutions often serve both symbolic and substantive functions. With the former, symbolic functions provide the opportunity to signal intent, represent collaboration and more broadly to perform statecraft. But substantive functions can provide the means to advance actual policy coordination and, in their more advanced forms, bind members into strict policy commitments, most famously exemplified by the EU and WTO. Most initiatives provide a blend of performance and policy as well as offering a platform at which ad hoc diplomacy can take place, such as the China-Russia meeting this year.

The SCO today is, however, a grouping that is long on symbolism and short on substance. At first glance it appears to be a good example of institutional balancing, that is when states use international institutions to balance against the influence of major powers. In this case the intention is to use the SCO to ensure that the US and its allies’ influence on the geopolitical dynamics in the Eurasian heartland is blunted. From this perspective bringing India into the fold was intended to hedge against Delhi’s growing alignment with Washington.

More broadly, it also represents a desire for a more multipolar and multimodal international order in which the North Atlantic powers have less influence; and liberal values are diluted as well.

While the symbolism is strong, and in the current moment it has particular salience given the Ukraine war illustrating starkly the clash between authoritarianism and democratic systems, there is little sign of the SCO making any meaningful progress on the substantive side of the ledger. One might be tempted to view the SCO as a nascent Central Asian NATO, yet the preferences of the key SCO powers remain low on concrete commitments as well as exhibiting not inconsiderable tensions between various members. At least for now, it is unlikely that the SCO will take any steps to move beyond the symbolic.

It is tempting, therefore, to write off the SCO as another example of shallow diplomacy in which grand statements of intent and photo opportunities are confused for actual statecraft. That is certainly true right now, but in the building of the foundations for collaboration among  influential and illiberal states in a geopolitically crucial zone of world politics, the members in general, and China in particular, have established a solid platform from which members may ultimately make good on their very real ambitions to transform the principles and practice of the regional order and possibly the international order.

Image Credit: YouTube

Biden, Suga, Xi and Yes, Others – the New Mix Reshaping Global Order Relations

 

The current state of the international system. That is what I hope RisingBRICSAM can tackle in the next set of posts. While I remain the named blogger here at RisingBRICSAM,  I shall not be undertaking this task alone. Nope. I have been fortunate enough these past weeks to be working with a great set of recent, or near MGA graduates from the Munk School of Global Affairs & Public Policy, University of Toronto.

And all of us in various ways have had  opportunities to examine in some detail aspects in the evolving global order. In addition, many of these same researchers have joined in the China-West Dialogue (CWD) research and online meetings. But more on that in a moment.

 

There is as you will see a host of significant influences shaping the global order and its politics. Probably the most immediate has been Covid-19. The waves of the virus have had a significant influence on all the major and minor actors in the global system.

The global public health crisis has also underscored the growing array of new actors in the global order. Of course the many states – leading powers, major powers, emerging and developing powers, and also the international organizations both formal and the often forgotten but in fact critical informal institutions.

The array of these state actors have been significantly supplemented during the pandemic by sub-state actors – whether regions, networks or local actors and even more dramatically non-state actors such as foundations, public and private corporations.  The pandemic has underscored the growing role of technology and digital organizations. One of the envisaged posts will focus on the global developments of Agenda 2030 – the 17 Sustainable Development Goals (SDGs) – and the threat that the Covid-19 pandemic has posed to achieving these critical global development goals by the end of the decade.

The virus has been dramatic globally. But then as well has been the replacement of the Trump Administration and its ‘America First’  foreign policy in the United States with the Biden Administration’s autocracy versus democracy and build back better world (B3W). Both administrations grappled with, or amplified, the reemergence of geopolitics with the intensifying rivalry between the United States and Xi Jinping’s China. Even in these early months, the Biden Administration has represented a highly different domestic and diplomatic effort from the often chaotic years of Trump policies though it appears the Biden Administration has moved slowly on revising aspects of American foreign policy including with China. Some of the early and continuing analysis and research at the Global Summitry Project (GSP)  on US and US-China foreign policy has been undertaken by the China-West Dialogue Project (CWD) co-chaired by Colin Bradford, non-resident senior fellow from Brookings and myself. For almost two years we have met largely virtually with thought leaders – former officials, policymakers, academic experts – from around the globe to build a narrative that can accommodate competition, avoid confrontation and vitally permits collaboration – an approach that counters the ideological divisions that have emerged with rising US-China tensions.

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The ‘Great Dismantler’ – Can A Liberal Order Be Rebuilt after the ‘Age of Trump’

It has become clear where Trump’s policies are taking us – or as clear as one can be when it comes to interpreting Trump policy.  Trump is breaking the structures and  policy frameworks of America’s existing domestic and foreign policies.  The question is less whether he can accomplish some measure of this, then what will  it take future US leaders, assuming they are willing, to rebuild the institutions and policies that have been constructed over the past seven decades.  As Tom Friedman of the NYT recently declared:

Moreover, when you break big systems, which, albeit imperfectly, have stabilized regions, environments or industries for decades, it can be very difficult to restore them.

The litany of destruction by this President is now  all too familiar.  In his first day in office after his inaugurated, Trump withdrew from the Trans-Pacific Partnership.  He now appears to be targeting for destruction the NAFTA before the rather hapless Mexican and Canadian leaders.  And the South Korea-US free trade agreement appears to be next for the chopping bloc, notwithstanding the need it would seem to maintain close alliance support in the face of the North Korea’s nuclear and missile ambitions and US efforts to force DPRK denuclearization.

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N-11 and the Global Financial Crisis

 Late in 2005, Goldman Sachs (GS) introduced the concept of the N-11. As described by Dominic Wilson and Anna Stupnytska in the GS Global Economics Paper, No. 153  (March 28, 2007), “The N-11: More than an Acronym.”*

The N-11 appeared to be a GS effort to introduce a further tier of emerging economies and determine whether the next group of large developing countries with large populations had the potential to become ‘BRIC-like.’  Their summary conclusion:

 

“The diversity of the N-11 makes it difficult to generalise. But our projections confirm that many of them do have interesting potential growth stories, alongside reasonable scale, although their prospects vary widely and some face much greater challenges than others.  …Of the N-11, only Mexico, Korea and, to a lesser degree, Turkey and Vietnam have both the potential and the conditions to rival the current major economies or the BRICs themselves. Other N-11 economies – Indonesia and Nigeria in particular – have the scale to be important if they can deliver sustained growth. But while the rest of the N-11 may not have a BRIC-like impact any time soon, the Continue reading