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BRICS: Economy to dominate agenda in shaping a new world order

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Picture: Stock image – Over the past several years, despite the creation of the New Development Bank and some of the initiatives to boost economic ties between BRICS members, there has been a sense that BRICS, in a post-Covid world, needs a more profound programme to attract nations from the Global South, the authors write.

By Ashraf Patel and Mikatekiso Kubayi

BRICS and its “promise” enjoys significant attention today for the extent to which discourse on the global financial architecture and on changes in the global order has captured the imagination.

Chinese President Xi Jinping is said to have exclaimed that “what the world is seeing today has not been witnessed in the last 100 years”. Of course, the BRICS bloc has expanded its agenda since 2009 to include more than 70 co-operation mechanisms.

However, this year’s BRICS summit brings into sharp focus two much-anticipated issues: BRICS expansion and a payment system.

“We will widen the circle of friends of the BRICS and turn it into the most influential platform for South-South co-operation in the world,” declared Wang Yi, China’s foreign minister.

The first, perhaps more symbolic of a changing “global political order”, holds the potential to bring together even states that have been at logger-heads with each other to a table in an endorsement of a different way of approaching global issues. It is said that even some European states are among the more than 40 to have expressed an interest in joining BRICS.

The Department of International Relations and Co-operation confirmed that 23 states have formally applied to join. This introduces the possibility of states from the Middle East and additional African, Asian, Eurasian, and South American states joining the bloc.

The second is more representative of its original mission, that of contributing to reforms of the global financial architecture and global economic governance, modernising and democratising them, and giving more meaning to the terms “participatory” and “equitable”, particularly for voices from the Global South. This has the potential to open more possibilities and opportunities for trade. And this trade is encouraged to use local currencies, develop local currency capital markets and aid localisation of production.

But BRICS emerged because some- thing was fundamentally problematic with the global system. The global financial crisis that began in 2008 and its lasting consequences provided urgency to a process that had already been under way since about 2006.

The inequities sharply exposed by the global response to the Covid-19 pandemic, such as vaccine nationalism, inequities sharply exposed by the global response to climate change, such as the pursuit of the meaning of the word “just” in the just transition, give more urgency to the deliberations to take place at the Sandton Convention Centre next week.

Over the past several years, despite the creation of the New Development Bank and some of the initiatives to boost economic ties between BRICS members, there has been a sense that BRICS, in a post-Covid world, needs a more profound programme to attract nations from the Global South.

So, BRICS emerges not out of nothingness but out of material conditions that require such a response, as seen by the growing list of interested states. To some extent, these are material conditions that continue to be predicated on the hegemony of the Global

North and/or Western economic powers over the governance of the global economic order. These conditions have lasted epochs, with each epochal crisis leading to a rethink by international think tanks. These material conditions included a narrative environment that did not consider this development significant.

Many dismissed its argument, not because of any inferiority but because of the gargantuan nature of its undertaking and the muscle behind resistance to its agenda. However, the group of five states continued as it does today, to not only posture and project its growing strength and determination but proceed with actual operational arrangements in the form of economic and financial institutions and a growing list of NDB-funded development projects.

Intra-BRICS cultural, academic, business, and other integration-biased initiatives (transnational civil society), such as frequent conferences, scholarly collaborations, investments, and trade continue to grow.

As it happens with the growth of the global significance of the BRICS bloc, authors, and commentators in international relations, have, since the financial crises of 2008, made their contributions to the consistently growing reviews of the dominant global economic paradigm, the Washington Consensus. Some suggest that the crisis was just the opportunity for the emergence of new powers from the Global South, spurred by poverty reductions and higher economic growth in “uncertain” times. The exposure by the financial crisis of the significant fallibility of the neo-liberal finan- cial system brought questions of its credibility as a mantra for economic success to the fore.

Today, many African nations face the worst debt crisis in decades, even worse than the 1980s debt burdens that destroyed African economic capacity and plunged millions into poverty. Of course, once again, the most brutally affected were the less developed economies already battling seemingly endless challenges and needing assistance from developed economies.

Ironically, one of the significant challenges facing developing economies, particularly in Africa has been the illicit financial flows, pouring out of the continent at sums even more significant than the value of aid to the continent. Today, the continent forges ahead in its quest to develop a regional value chain to withstand global shocks, to be prepared for any eventuality of a new pandemic, build industry for the creation of jobs for its growing population of young people, and to re-establish its rightful place among the significant contributors to humanity that the African renaissance is poised to deliver. BRICS is a committed partner to this quest and its reform and development agenda is popular for it.

Indeed, an expanded BRICS offers challenges and opportunities. Challenges would include questions about the impact that an increased membership would have on the bloc’s internal protocols premised on consensus and equality regardless of the size of economy of members. Members come with their own world views, national interests, histories, and cultures, as well as a variety of already concluded relations with others. Challenges would also include questions on whether these varieties would impact the reform and agenda of the bloc and to what extent.

The inclusion of South Africa in 2010 has had a positive impact on its agenda. And this is despite the many comments and analyses criticising its inclusion based on the size of its economy, influence in the world, military and so on. Over the past several years South Africa’s status as

“Africa’s lead economy” has been slipping, with Egypt, a potential BRICS member, now Africa’s top economy, and many nations such as Nigeria, Kenya, Rwanda and Senegal playing more influential roles on the continent.

According to Russian economist Yarislav Lissovak: “The first thing to realise about the uniqueness of BRICS is that each member is also a leading economy in its continent or sub-region within a regional integration arrangement: Russia in the Eurasian Economic Union, Brazil in Mercosur, South Africa in the South African Development Community,India in the South Asian Association for Regional Co-operation, and China in the Shanghai Co-operation Organisation, in the China-Asean Free Trade Area and the prospective Regional Comprehensive Economic Partnership.”

While the BRICS members seem capable of navigating these challenges, they are incentivised by the potential opportunities that an expanded bloc would bring. These would include an addition to the size of the land mass, size of its population, size of its collective economy, size of its resource pool, knowledge and so on. An expanded BRICS offers an increased market, particularly in lieu of its trade and integration efforts. The NDB stands to potentially benefit from additional resources and reach to impact in the affirmative the reform and development agenda.

In years gone by, global progressives rallied against the IMF and World Bank austerity and the Thatcherite diktat – “There is No Alternative” and developed their own slogan “There must be an Alternative!”. BRICS Plus is fast becoming that alternative.

*Kubayi is a researcher at the Institute for Global Dialogue and Patel is a senior research associate at the IGD.