Asad Mirza
BRICS nations concluded their annual summit in the Russian city of Kazan, resolving to deepen economic ties. Plans to deepen financial cooperation and develop alternatives to Western-dominated payment systems were also discussed, besides offering African nations a bigger say in the changing global order.
The BRICS group has become a major political force in the last two decades, building on its desire to create a counterweight to Western influence in global institutions. The group’s expansion in 2023 increased its heft. After Iran, Saudi Arabia and the United Arab Emirates (UAE) joined it in 2023,the alliance that initially referred to Brazil, Russia, India, China and South Africa has gradually become a bigger body.
Russian President Vladimir Putin at the BRICS closing session in the southwestern Russian city of Kazan said all countries joining the bloc “share similar aspirations and values and a vision of new democratic global order.”
The three-day summit, which ended on Thursday last, also provided a platform for member countries to discuss plans to deepen financial cooperation and develop alternatives to Western-dominated payment systems.
But at the same time, the summit also brought out new disagreements on issues such as Russia’s invasion of Ukraine. Russia’s 2024 leadership could intensify the bloc’s anti-West focus, including attempts to edge out the US dollar – though experts feel that it may be an uphill task.
Though there are assumptions that the bloc could undermine the Western-led international order, sceptics say its ambitions to create its own currency and develop a workable alternative to existing institutions face potentially insurmountable challenges.
In fact, BRICS is not a formal organisation, but rather a loose bloc of non-Western economies that seek to build an alternative to what they see as the dominance of the Western viewpoint in major multilateral groupings, such as the World Bank, the Group of Seven (G7), and the UN Security Council.
The group’s 2024 expansion comes with a range of geopolitical implications. It represents growing economic and demographic heft: the ten BRICS countries now comprise more than a quarter of the global economy and almost half of the world’s population. The group is poised to exert influence over the wars in the Gaza Strip and Ukraine, the shape of the global economic system, the competition between China and the West, and efforts to transition to clean energy.
BRICS’thematic priorities are, firstly, advocate for greater representation in global organisations. The group aims both to push for reform of existing institutions, and to form negotiating blocs within those institutions.
Secondly, coordinate a balanced economic policy. The 2008 global recession hit the BRICS countries hard, leading the group to emphasise economic coordination on issues such as tariff policy, export restrictions of critical resources, and investment.
Thirdly and most ambitiously, work out a new global payment system to reduce reliance on the US dollar. Increasingly disgruntled over the domination of the dollar in global transactions, which exposes them to Western sanctions, BRICS leaders have long advocated for de-dollarisation in favour of increased trade in local currencies or even a potential common BRICS currency.
And lastly, create an alternative finance system. The group’s New Development Bank (NDB) and Contingent Reserve Arrangement (CRA) are meant to mimic the World Bank and International Monetary Fund (IMF), respectively. BRICS members hope that alternative lending institutions can invigorate South-South cooperation and reduce dependence on traditional funding sources.
The BRICS countries have sought to reduce the primacy of the US dollar in international trade, primarily by increasing the use of their own currencies for trading, especially China’s Renminbi. There is also a push to introduce a new, BRICS-wide. Other monetary proposals laid out earlier included founding a new cryptocurrency or using a combined basket of BRICS currencies.
Meanwhile, the Western countries have largely downplayed the group’s growth. White House National Security Advisor Jake Sullivan said that Washington does not see BRICS as a geopolitical rival, while Treasury Secretary Janet Yellen has largely dismissed efforts to move away from the dollar. Similarly, German Foreign Minister Annalena Baerbock has downplayed growing ties between BRICS members.
Still, some European policymakers have cautioned that the anti-West sentiment is growing more confrontational. They see the expansion as the result of a lacklustre Western response to low-income countries’ needs. They say Western countries need to begin reforming financial institutions in earnest.
Indeed, this year’s Summit Declaration may offer little of substance. But there were a number of bilateral meetings before and in the margins of the gathering that are more indicative of the direction of BRICS. Perhaps most importantly, India’s Prime Minister, Narendra Modi, and China’s president, Xi Jinping, held their first face-to-face discussion in five years.
This is a remarkable change from just a few months ago, when tensions between New Delhi and Beijing were intense enough for Modi to cancel his participation in the summit of the Shanghai Cooperation Organisation in Astana, Kazakhstan. Yet, with a deal now reached over their countries’ longstanding border dispute, the two most populous and, in terms of GDP, economically most powerful members of BRICS have an opportunity to rebuild their fraught relations.
A warming of relations between China and India could generate more momentum for BRICS to deliver on its ambitious agenda to develop, and ultimately implement, a vision for a new global order. Implicit in this would be a shift of leadership in BRICS from China and Russia to China and India, and with it, potentially a change from an anti-Western to a non-Western agenda.
The summit also gave Putin the chance to push his own vision of BRICS as a counterpoint to the US-led West.
But this may be a view shared in the global east – Russia, China, and Iran, as well as non-BRICS members North Korea, Cuba, and Venezuela. But many in the Global South – particularly India and Brazil – are unlikely to go all in with this agenda. They will focus on benefiting from their BRICS membership as much as possible while maintaining close ties with the West.
India is the most significant player in BRICS when it comes to balancing between East and West. However, as the flailing expansion drive of the organisation indicates, there is also an internal battle in BRICS over its future direction. This, in turn, creates space and time for the West to exercise more positive and constructive influence in the ongoing process of reshaping the international order.
The Global East may be beyond redemption, but there is still a massive opportunity to reengage with-in the Global South, led by India.
(The author is a New Delhi-based senior commentator)
Follow our WhatsApp channel
