On August 22, South Africa will host the next BRICS summit—bringing together leaders from Brazil, Russia, India, China, and South Africa—at a time of acute tensions between the United States and its great power rivals China and Russia. But another context for the meeting is the increased salience of the Global South, most sharply revealed by the nuanced reactions in Asia, Africa, and Latin America to the Ukraine war.
The multiple failures of the US-led world order to substantially support two core requirements of Global South states—economic development and safeguarding sovereignty—are creating a demand for alternative structures for ordering the world. The BRICS and the Shanghai Cooperation Organization (SCO) are two major responses to these failures. They are bringing the East and the South together in rooms in which Washington and its core allies are not exactly welcome—even when they invite themselves.
BRICS is often talked about in one of two ways. Some observers dismiss its relevance, even calling for its dissolution. Others take a romantic view of the BRICS being a revival of the hoary days of Southern solidarity—Bandung in the 1950s or the 1970s New International Economic Order. Neither is an accurate picture of what is really happening.
The current moment appears to be the next fork in the road for BRICS, after its foundational years of 2009–10 and the creation of its development finance entity (the New Development Bank) in 2015. Two key items are on the August summit agenda—first, finding a way to trade and invest with one another by circumventing the use of the US dollar and second, admitting new states to the club.
Developing Differently
The global financial system remains dominated by the US dollar and heavily influenced by the US Federal Reserve. Arguably, the wide use of the dollar allows nations to trade more easily. But it also puts their economies at the mercy of US interest rates and sovereign measures such as quantitative easing, and enables harsh US-led sanctions regimes. For the Global South, alternative pathways of both development financing and currency settlements are attractive ways to achieve autonomy, enhance economic growth, and at least partly protect themselves against the extraterritoriality of sanctions.
De-dollarization—even limited to trading between the five BRICS states—is an extremely ambitious goal, and significant progress is difficult to foresee. The preparation required to generate such a currency is formidable. This includes habits of much deeper coordination by the respective countries’ central banks, which do not yet exist. These will involve prickly issues of yielding a degree of sovereignty. There are also geopolitical barriers: India is wary of China playing the dominant role in any such arrangement due to its disproportionate economic heft in the grouping. New Delhi has already rejected being a part of any alternative currency arrangement. Nor is South Africa particularly supportive of moving in that direction. For now at least, creating alternatives to dollar-denominated trade remains more of a talking point than an achievable policy.
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Yet while de-dollarization may be a long way off, BRICS is taking significant steps to evolve alternatives to US-dominated financing institutions such as the World Bank. In 2015, the five states founded the New Development Bank, with infrastructure financing and sustainable development as its focus. Although China’s GDP is more than twice that of the rest of the BRICS states combined, it agreed to an equal partnership on governing the bank and an equal share of subscribed capital of $10 billion each. Membership in the NDB is open to all UN member states. Bangladesh, Egypt, the UAE, and Uruguay have already become members, and more states are likely to follow.
Though headquartered in China, the NDB is different from another similar multilateral institution, the Asian Infrastructure Investment Bank, in which China has clearly taken a majority shareholder position and the leading role. The NDB is even more distinct from Beijing’s Belt and Road Initiative, which remains a set of bilateral infrastructure financing deals in which China is even more dominant as sole lender.
To Expand or to Not Expand?
Expanding BRICS itself, however, is a different matter. There has been a deluge of interest from Gobal South states in joining the club. As many as 22 states have applied to join, according to South Africa. Even more have expressed interest. These are said to include Algeria, Argentina, Belarus, Bolivia, Egypt, Indonesia, Iran, Saudi Arabia, the UAE, and others.
Multiple states attended “Friends of BRICS” meetings in South Africa earlier in the year. South Africa has always stressed involving other African states in BRICS meetings as invitees. The focus on Africa will be even more on display this year.
However, there are differences on expansion within the grouping, with China pushing the hardest for enlargement with some Russian support. But India and Brazil are wary, wanting a much slower process in which expansion happens in stages and after an intermediate status of some sort being granted.
As Andre Pagliarini has written recently, Brazil’s resistance to expansion comes from its desire not to dilute its influence in what it sees as a key grouping in which it has major influence. India too shares some of these concerns. South Africa would like to preserve the five current BRICS states as core members and focus more on a BRICS+ type of a format, according to a senior government official.
Expansion, even in a two-tier format, would be a major step forward for BRICS. It would signal a much larger coalition and wider conversations about creating new pathways for solving common challenges. Naturally, a bigger grouping will make it more challenging for translating the work agenda into concrete actions—a classic trade-off between efficacy and size.
The Geopolitics of It All
It’s a misnomer that BRICS is a South-South initiative; rather, it can be characterized as an East-South grouping. And a potential barrier to BRICS becoming much stronger is the divide between the two Asian giants, India and China. After their 2020 clash that led to the death of at least two dozen of their troops, New Delhi and Beijing are locked in an armed standoff high in the mountains that has only partly been eased in the past three years.
However, it is notable that they have not allowed this deep distrust from significantly impacting their participation and conversations within BRICS agendas and formats. In fact, both India and China compete and converse within BRICS. At one level, each tries to ensure that the other does not become dominant in the grouping. But the BRICS meetings also provide opportunities for India-China dialogue in safer multilateral formats.
For the BRICS to remain viable and make an increasing impact, it is not necessary that its core members be close friends but that they see a common interest. Forming a coalition with Russia and China gives Global South states leverage in their dealings with the US-led West. It also helps generate a more multipolar world, long a goal of the South’s middle powers.
But Brazil, India, and South Africa are taking pains to also convey the message that BRICS is not hostile to the United States. “I don’t think we see BRICS as being pro-Russia or anti-Western. I think that would be extremely wrong” said Naledi Pandor, South African foreign minister. Brazil’s Lula has greatly appreciated the support from the Biden administration on strengthening democracy at home. India, of course, is a close US partner when it comes to Asian geopolitics and economic and people-to-people ties.
This, then, is the subtle but real East-South differentiation within BRICS. Whereas Russia and China are locked in a bitter military and economic rivalry with the United States, the Global South BRICS states see the grouping as a complementary way to create parallel structures of power and influence in a world in which Washington has often been a disappointment and sometimes a major barrier to some of their core interests. An issue-based coalition with the “Global East” is a logical avenue to take.
This is also true for India, perhaps Washington’s closest friend within BRICS. India is often disadvantaged by a global economic system that is found wanting when it comes to climate finance and equitable development, not to mention occasional US intrusions into what it considers sovereign matters of domestic politics. And the fallout from US sanctions does not spare even New Delhi. That was demonstrated by its eventual and reluctant alignment with Washington’s tough Iran sanctions under President Trump. New Delhi has also refused to join US-led sanctions regime against Moscow—in fact, greatly increasing its oil purchases from Russia.
Pressures are ever-present for Global South states not getting too close to Moscow and Beijing. The allegations of arms-to-Russia from South Africa are a good example of Washington’s propensity to come down hard on non-aligned states that are seen to become too aligned to its rivals.
The Hunger for Alternatives
BRICS is not the only grouping that has emerged from this East-South cooperation. The Shanghai Cooperation Organization (SCO) is another. Unlike BRICS, which originated across three continents, the SCO’s nucleus is in the heart of Eurasia, with the “Shanghai Five” states of China, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan. BRICS was, and remains, a grouping focused more on economic development. While the SCO has taken on a broader agenda, its focus remains security and state sovereignty. The SCO has been in expansion mode for a few years now—India, Pakistan, and Iran have become additional members. Several other states are in the process of joining.
Global South states find the BRICS and the SCO attractive as there is a hunger for alternative structures to achieve their most fundamental goals as states and societies—economic “catch-up” with wealthy states and safeguarding older norms of sovereignty, which the post–Cold War United States often treated with contempt. Western agendas of democracy-promotion and human rights—but especially their blatantly inconsistent and often self-serving application—are seen as threats by much of the Global South, which is peppered with non- or semi-democracies. Huddling with China and Russia, two authoritarian states that show little affinity for these precepts, provides a shield against the intrusion of these norms, their misuse, and their perceived threats to regime stability in the South.
There is plenty of sentiment in Western capitals that dismisses the significance of organizations such as the BRICS and what they represent. Critics are correct that, thus far, their impact has been more symbolic than substantive. But it would be a mistake to see them as simply talk shops. While desiring a strong relationship with the United States, most Global South states are also seeking pathways that spread risk in a global order of diminishing unipolarity, enhance their own prosperity and climate security, and ensure regime stability against the pressures and temptations of the West. That effort and search will continue, whether Washington likes it or not.
