Brics: Case for a new World Order

 A notable absentee was Russia’s president, Vladimir Putin who skipped the event over personal safety fears and ICC-related complications. Putin’s absence seems not to have impacted the quality and outcome of the High-level meeting.

In Johannesburg, Brics leadership once again stated that their formation was not in competition with nor sought to replace or dominate any other nation, continent, or grouping. Despite these repeated pronouncements, founding members of the Brics are thought to be fashioning a new world order and desire to ultimately replace the Brettonwood system that was established in 1945 and is dominated by America and European powers.

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It’s clear that these countries no longer trust the West to reform multilateral institutions, including the United Nations Security Council, the World Bank, and the IMF – with the goal of making them “more agile, effective, efficient, representative, democratic and accountable”. They decry the unilateral use of coercive and illegal measures, such as sanctions by Washington and Europe to maintain military, political, and economic dominance.

The XV Brics Summit was, in many ways, significant and successful. The group reached, at last, an agreement — and adopted by consensus — what they termed as “the guiding principles, standards, and criteria and procedures of the Brics expansion process”. They also recast themselves as Brics Plus, and admitted some six new members (Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates) thereby more than doubling its membership.

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We are witnessing the ebb of real power, from the west to the east — and the economic performance and spread of the Brics influence serve as a meaningful barometer. At its 2009 inception, the Brics accounted for 26 per cent of the global economy while the seven most industrialised nations, or G7, comprising of the United States, Canada, the United Kingdom, Germany, France, Italy, and Japan contributed 34 per cent.

This year, the five original Brics members are projected to account for 33 per cent of total GDP as compared to a declining 30 per cent for the G7. Brics plus countries are home to more than half of the world’s population, and half of them are among the world’s top 10 oil producers and nations with the largest known natural gas reserves.

Political and military influence

Africa’s external trade is increasingly dominated by India and China with US and European countries playing significant yet diminishing roles. An analysis of recent trade data reveals a sharp jump in the Russia-Africa interactions that are set to further blossom, broaden, and deepen.

Also, the stunning re-election of Lula da Silva would likely reignite the historical and valuable Africa-Brazil ties. But it is perhaps Russia’s growing political and military influence in the Sahel region and beyond, at the expense of America and France, that powerfully signifies the West’s diminishing fortunes. In recent years, Western powers have lost leverage in Mali, Niger, Guinea, Burkina Faso, Chad, Central African Republic, and reportedly Sudan. Also, Algeria, Libya, and Egypt have become increasingly skeptical of Europe and America.

Although different in many ways, Brics Plus countries share one key similarity: Rejection of complete compliance to Western dictates. For Russia and Iran, the outcome of this defiance has been military tensions, sanctions, economic sabotage, and political isolation. China has come under intense military pressure ostensibly due to its claims over Taiwan and the surrounding waters. Beijing is presently engaged, as a reluctant combatant, in a mutually destructive trade war with Washington.

The Saudis seem to have decidedly spurned their western allies, and moved to mend relations with their regional nemesis, the Iranians and Syrians. On its part, UAE has always been a rebel; defiantly maintaining political, trade, and economic ties with Tehran – at the chagrin of the US, Europe, and the Cooperation Council for the Arab States of the Gulf.

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Argentina, South America’s second-largest economy, has steadfastly resisted political and IMF’s pressure to settle bad debts that go back some 40 years. Buenos Aires has refused to pay American and European banks (often referred to as vulture funds) billions of dollars for the bonds they hold. Argentina claims bondholders willingly bought them from a corrupt regime.

Consequently, Argentina’s economy has stalled and is beset with massive inflation that is only comparable to what Zimbabwe, another rebel, experienced. Egypt is genuinely skeptical of Washington, especially following the chaos of the Arab Spring which Western powers seemed to support.

The admission of Ethiopia into the Brics, as the first sub-Saharan African country, is very significant. Not only was Ethiopia not colonized by Europe, but its systems are also least tainted. Ever cautious, Addis Ababa has always been a rebel and the last to embrace western ideas. Until recently, Ethiopia was not even a member of the World Trade Organization. While not centrally planned, the Ethiopian government, like the Chinese, plays a key role in the economy.

There is more to learn from the Brics XV Summit. The Johannesburg Declaration II document reveals a range of ambitious initiatives, working groups, funds, and institutions including Think Tanks that are being established with the view of transforming the group into a transformative entity.

Diplomatically, the admission of Ethiopia and Egypt into the elite club was brilliant for it allows these countries to deescalate the simmering tension over the use of the Blue Nile waters. Also, by brokering a deal between Saudis and Iranians, and affording them seats at the table, alongside emerging powers is illustrative of Beijing’s soft power and convictions that diplomacy is almost always more desirable than warmongering.

Mr Chesoli is a New York-based development economist; [email protected]