8/25/23, 11:11 AM BRICS to build new bloc, but challenges persist

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BRICS to build new bloc, but challenges persist

DM Editorial ⋮ 7-9 minutes ⋮ 8/25/2023

(From L to R) Chinese President Xi Jinping, Brazil’s President Luiz Inacio Lula da

Silva, South African President Cyril Ramaphosa and India’s Prime Minister India
Narendra Modi gesture during yesterday’s BRICS Summit session at the Sandton
Convention Centre in Johannesburg. Russian President Vladimir Putin took part in the
summit through a video link. (Photo by Marco Longari/AFP)

Is the BRICS, a group of five emerging economies, falling apart or strengthening its position
as a potential challenger to the G7, the Western-led alliance of the world’s most developed
countries?
Leaders of the BRICS nations—Brazil, Russia, India, China, and South Africa—wound up
their 15th summit yesterday in Johannesburg, South Africa, however, indicating that they had
resolved to make BRICS stronger and more meaningful so that it could wield greater clout in
shaping the world. In other words, they stressed that they wanted to be counted in deciding
the fate of the global economy.

BRICS has still not reached a level that warrants comparison with the G7—comprising the
United States, the United Kingdom, Germany, France, Japan, Italy, and Canada— which has
arrogated itself the right to decide on world affairs. Yet BRICS’ economic indicators paint a
seated colossus capable of towering over the G7 if it stands up.
This is because the BRICS contribute more to global GDP in purchasing power parity (PPP)
terms than the G7. The International Monetary Fund predicts that China and India alone will
account for about half of global growth this year. The BRICS countries also account for 40
percent of the world’s population and a quarter of the global economy.

However, some analysts say BRICS has a long way to go to catch up with the G7. They say
the G7 nations still have a higher per capita income, a bigger capacity for technological
innovation, and wield more military power and political clout than the BRICS countries. They

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8/25/23, 11:11 AM BRICS to build new bloc, but challenges persist

also point out that the G7 is politically more united than the politically diverse BRICS.
Besides, G7 countries also share common values and interests, such as democracy, human
rights, and free trade, while BRICS countries are a disparate mix of big and small economies
and democratic and authoritarian states. Yet BRICS nations share a collective desire to
challenge the Western-led global order, which they say does not serve their interests.
The West is not oblivious to the rise of the BRICS. Although the US and its allies believe that
the different political ideologies within BRICS will prevent it from becoming a unified bloc,
they will not allow BRICS to undermine their global clout.

The presence of China in BRICS is what makes the West jittery. Already, Western
hegemony, as epitomised by the G7 and the North Atlantic Treaty Organisation (NATO), has
been challenged by China and Russia, both BRICS members.
For the West, however, India’s presence in BRICS may offer assurance that the grouping will
not grow anti-West. This is probably one of the reasons why India is invited to G7 summits.
But the West is also cognizant of the fact that India charts an independent foreign policy,
always doing what serves India’s national interest best, regardless of its obligations to the
West. The day India sees that its national interest will be better served by improving political
and military ties with China than with the West, it will indeed be a paradigm shift in world
politics. In politics, nothing can be ruled out.

Political disunity is an obstacle BRICS needs to overcome if it is to emerge as a leader on

the global scene, like the G7.
These concerns aside, as many as 24 emerging economies are knocking on BRICS’ door for
membership. They include Saudi Arabia, Turkey, Iran, the United Arab Emirates, Argentina,
Indonesia, Egypt, and Ethiopia. These countries believe that by becoming BRICS members,
they too can have a say in bringing about a global order that upholds economic justice. Of
course, they will also benefit from BRICS partnerships, such as the Shanghai-based
multilateral New Development Bank.

Yesterday, BRICS leaders agreed to expand the club after an initial disagreement that saw
Brazil oppose the enlargement, China and Russia push for it, and India and South Africa sit
on the fence. Accordingly, Argentina, Ethiopia, Iran, Saudi Arabia, Egypt, and the United Arab
Emirates will become full members from January 1.
China, which represents about 70 percent of BRICS’ total GDP, sees an enlarged BRICS as
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8/25/23, 11:11 AM BRICS to build new bloc, but challenges persist

compatible with its Belt-and-Road Initiative (BRI), with which it has made inroads into the
world’s strategic ports and trade hubs. It also feels that BRICS is the right type of forum to
challenge US hegemony.
Addressing the BRICS summit on Wednesday, Chinese President Xi Jinping said that
expanding the bloc would “pool our strength and pool our wisdom to make global
governance more just and equitable.”

“Development is an inalienable right of all countries, not a privilege of a few,” he said.

What of India? India has spurned China’s invitation to join the BRI due to its suspicion that
China’s objective is not only trade but also military expansionism. India views China as a
hostile power following border clashes in the Ladakh region in 2020 and China’s suspicious
activities in the Indian Ocean. However, China remains India’s largest trading partner, with
trade between the two reaching a record US$136 billion last year.
India is a member of the pro-Western and China-focused Quadrilateral Security Alliance,
which also includes the US, Japan, and Australia. But India also maintains friendly ties with
the West’s chief antagonist -- Russia. It buys Russian arms and refuses to condemn
Russia’s invasion of Ukraine. India, along with China, is also one of the biggest buyers of
Russia’s sanctions-slapped petroleum products.

India’s Prime Minister Narendra Modi, who was in a jubilant mood on Wednesday after India
made history by becoming the first nation to land a craft on the moon’s south pole, told the
summit he supported opening the door to new members and “welcomes moving forward with
consensus”.
If BRICS expands with the inclusion of new members, in what way will it be different from the
G20, another global platform for economic cooperation and discussing global issues such as
climate change? The G20 includes all seven G7 countries and all five BRICS nations. India
will host the G20 summit in October. Unlike the G20, which is largely a talking shop, BRICS
is work-focused.

It has set up the multilateral New Development Bank, which offers its members unconditional
development aid, unlike the IMF, whose assistance is extended under tough conditions.
BRICS is also focusing on a new reserve currency to bypass the US dollar, as the de-
dollarisation of international trade is one of its objectives. The matter was discussed in
Johannesburg, but a decision was deferred until the complexities were sorted out. BRICS
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8/25/23, 11:11 AM BRICS to build new bloc, but challenges persist

nations, meanwhile, carry out trade in their local currencies through the BRICS Interbank
Cooperation Mechanism and the digital payment platform BRICS Pay.
These measures make BRICS relevant. In the global south, BRICS is being seen as a
beacon for developing countries, just like the Non-Aligned Movement, which championed
their cause from 1961 to the early 1990s before becoming defunct.

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