BRICS Gets Going Big

Loud and clear, dollar domination is fast diminishing. BRICS, which began with five founding members and added four more early this year, is set to rewrite history in the world economic and political landscape. Russia’s President Vladimir Putin was visibly pleased to host the October 22-24 BRICS summit in the Russian city of Kazan. One of the main reasons must be that 36 countries attended it, ignoring the US-led West’s sanctions on Russia and the International Criminal Court’s controversial arrest warrant against Putin. The Kazan event denied the US-led grouping’s attempts at isolating Russia internationally. 

Putin had reasons for additional satisfaction in that UN Secretary-General Antonio Guterres visited Russia for the first time after the Ukraine war started in February 2022. Whether BRICS maintains a power balance among sovereign nations will determine the actual substance of the anticipated changes in the existing world order. The outcome could mean a turmoil among the traditionally dominant power not witnessed in the past eight decades after World War II.  The joint statement issued at the end of the meet expressed concern over the “unlawful unilateral coercive measures, including “illegal sanctions” and “disruptive effect”. The European Union has frozen Moscow’s billions of dollars and imposed a series of fines. 

Gathering strength 

Set to rewrite history in the world economic and political landscape, the BRICS development has grabbed world attention and unsettled the bigwigs at IFM and World Bank. Putin presided over the closing session of the Kazan summit but not without lauding the organisation’s role as a counter-balance to the “perverse methods” the West applied, including “illegal unilateral sanctions, blatant protectionism, manipulation of currency and stock market.” The outcome within the next few years could be a turmoil and trauma not witnessed in the past eight decades after World War II.  These are hallmarks of a declining order giving in to a new one.

The Shanghai-headquartered grouping recorded a remarkable expansion in strength. On the summit eve, the IMF reported that BRICS accounted for 25 per cent of global export, 41 per cent oil production and had surpassed G7 in terms of GDP. The grouping advocates reforms for due voice and greater technological transfer. With it, the G7 monopoly of agenda setting is shrinking. It is no longer calling the shots as it did previously as a matter of foregone conclusion. 

More is yet to come. About 40 per cent of BRICS currency is being tied to gold. On China’s initiative, the grouping was launched in 2009, with Brazil, Russia, India and China as the founder members. A year later, South Africa joined it to form the five-alphabet acronym BRICS. In January this year, Egypt, Ethiopia, Iran and the United Arab Emirates got aboard. IMF and World Bank face a competitor as an alternative financial system. In fact, BRICS has called for comprehensive reforms at IMF and World Bank by way of better representation and higher accountability if the existing and emerging global challenges were to be effectively dealt with.

Multi-polarity is the new development. While the West clearly sees the growth of BRICS as a serious challenge, its mainstream media are quite reticent about giving the new scenario the coverage it merits. Nobel Prize winning economists are conspicuous by their tongue-tied position — by and large, deaf, blind or simply silent over the significant changes that the world is witness to. If cornered and for too long, a fight back is inevitable from independent states desirous of asserting their sovereign status and the rights that accompany it. The BRICS block has reiterated it, as underscored by the diminishing dependence on the greenback. The growth of BRICS is no surprise. Its timing was not accurately predictable, but the initiative was bound to strike remarkably. An era of greater economic independence is in the offing for a new, more balanced world order. G7 populations are not aware of the strength and depth of the new world order in the making and decline in the power and influence the US-led allies exercised in the past. 

Although the Association of South-East Asian Nations (ASEAN) began as a pro-Western organisation, it never lost its economic sense and probed possibilities for cooperation with countries that upheld opposing ideological persuasions. China-ASEAN trade stood at $40 billion in 2000, when it proposed a tariff free zone—something the US and its European allies had not come up. The electric effect today is that their trade has hit $1 trillion. China, Russia and India have made deep inroads into the market in Africa which is demanding a fair deal from past colonial rulers that are still eyeing the continent’s vast, rich natural resources whose profits are channelled in Western banks while African people live in poor conditions, millions of them facing regular famine.

Credible forum 

Freed from the constraints imposed by the gold standard, the US government lost its financial discipline and went on a decades-long spending spree. From 1971 to 2024, its national debt grew from $400 billion to $35 trillion. Ahead of Russia hosting the latest edition of the BRICS summit, Turkey’s application to join the group of major emerging economies gave a jolt to NATO members, of which Turkey is a member. While analysts say Turkey’s membership move was more about playing both sides than challenging its Western allies, some voice concerns that Ankara is moving away from the NATO alliance. In 2020, the Trump administration slapped sanctions on Turkey for a $2.5 billion acquisition of the Russian S-400 missile system, which is said to pose a risk to the NATO alliance and to US F-35 fighter jets. 

Despite the Russian missile deal, Ankara still has differences with the BRICS members and summit host concerning Moscow’s war with Ukraine. Tighter supply chain connections are expected between China and the 10-nation bloc of Southeast Asian countries, some of whose members are pushing for upgrading a landmark free-trade deal. ASEAN, which encompasses a 673 million population and several fast-growing economies, is “actively working” with China to upgrade the ASEAN-China Free Trade Area pact, according to the bloc’s Secretary-General Kao Kim Hourn. The brisk pace of BRICS gives the stamp of a confident competitor for due space in the global financial system and with it the supply chain instead of relying heavily on traditional pattern of functioning. 

(Professor Kharel specialises in political communication.)