BRICS represents the first important non-Western global initiative in
the post-Cold War world. But despite the forward movement achieved at
their New Delhi summit, Brazil, Russia, India, China, and South Africa
remain in search of a common ground that can help turn BRICS into a
weighty geopolitical alliance. Without clearly defined objectives and an
agreed plan of action, BRICS will be weighed down by internal
contradictions, as symbolized by its members’ starkly varying political
systems, economies, and national ambitions.
The disparate nature of the group’s membership — bringing together the world’s largest autocracy and democracy, as well as commodity-exporting and resource-hungry economies — has prompted cynics to dismiss BRICS as an acronymic ingenuity without substance. To its protagonists, however, BRICS is a product of the ongoing global power shifts, and has the potential to evolve into a major instrument in shaping the architecture of global governance. As a unified grouping, BRICS could play midwife at a time the qualitative reordering of power symbolizes the birth-pangs of a new international order.
On burning international geopolitical issues like Iran and Syria, BRICS actually stands out as the voice of moderation and caution, seeking to provide the balance to the interventionist impulse of Western powers. But as the recent UN human-rights resolution on Sri Lanka showed, the grouping is badly split on other issues. The group’s main economic giant, China, is also the political outlier that rejects the very concept of national elections and is ever ready to advance its commercial and strategic interests by coming to the succour of a fellow human rights-abusing state.
Economically, BRICS is likely to remain the most-important source of global growth. The BRICS grouping, after all, represent more than a quarter of the Earth’s landmass, over 41 per cent of its population, almost 25 per cent of world GDP, and nearly half of all foreign-exchange and gold reserves. In a spectacular reversal of fortunes, the developing economies, with their large foreign-currency holdings, now finance the mounting deficits of the wealthy economies.
In this light, BRICS, with its members’ collective weight, can exercise significant global financial clout if it gets its act together. BRICS indeed can be called the R-5, after the names of its members’ currencies — the real, rouble, rupee, renminbi, and rand.
Yet in the period since the Russia-India-China (RIC) initiative enlarged in 2008 to include Brazil and take the name of BRIC — a term coined by a Goldman Sachs economist in 2001 — the group has remained a loose, informal bloc. Last year’s expansion of BRIC into BRICS with South Africa’s addition has only accentuated the challenge to establish an institutional structure and a common plan of action, even as this enlargement threatens to make irrelevant yet another initiative — IBSA (India, Brazil, and South Africa).
For Brazil, South Africa, Russia, and India, BRICS serves as a forum to underscore their rising economic clout and showcase their emergence as global players. But for China, which needs no recognition as a rising world power, BRICS offers tangible — not just symbolic — benefits. China indeed has cast a lengthening shadow over the grouping, seeking, for example, to control the proposed common development bank — something India and Russia, in particular, are loath to accept.
At a time when China is under pressure for continuing to manipulate the value of the renminbi in order to artificially reduce the price of its goods and services abroad, the BRICS framework offers it a platform to expand its currency’s international role. As part of its quest to build the renminbi into an international currency, a cash-rich China is to extend renminbi loans to the other members of BRICS.
Lending and trading in renminbi will further boost China’s international status and clout. China’s undervalued currency and hidden export subsidies, however, have been systematically undermining manufacturing in other BRICS states, especially India and Brazil.
BRICS proponents still hope the group can serve as a catalyst for international institutional reforms. The global institutional structure has remained virtually static since the mid-20th century despite the rise of non-Western economic powers, and even the G-20’s formation was an improvisation designed to defer genuine reforms.
Yet, on international institutional reforms, China is hardly on the same page as the other BRICS members. It is a revisionist power concerning the global financial architecture, seeking an overhaul of the Bretton Woods system. But it is a status quo power with respect to the UN system, and unwaveringly opposes expansion of the Security Council’s permanent membership. It wishes to remain Asia’s sole country with a permanent seat — a position that illuminates its effort to regionally confine India.
BRICS can become a pressure group in international relations only if its members are able to agree on a common action-plan. The BRICS states, for example, are generally united in their frustration with — but not in their proposed response to — the dollar’s status as the world’s reserve currency. Indeed, the most-important bilateral relationship each BRICS country has is with the US. As long as BRICS is unable to present itself as a unified bloc seeking to push specific changes in the present ailing international order, it will continue to be seen by the old powers as embodying an aspiration rather than a threat.
Despite the steps agreed upon at the New Delhi summit, it is uncertain whether BRICS will evolve into a cohesive grouping with defined goals and institutional mechanisms to help pluralize the global order or remain an initiative with a beguiling acronym that does little more than annually bring together its leaders for more discussions. If it is able to develop brick by brick, BRICS could find itself on the evolutionary path treaded by the now-supplanted G-7, which also began as a discussion platform before advancing to joint coordination and action among its members on key international issues.
Courtesy Brahma Chellany
The disparate nature of the group’s membership — bringing together the world’s largest autocracy and democracy, as well as commodity-exporting and resource-hungry economies — has prompted cynics to dismiss BRICS as an acronymic ingenuity without substance. To its protagonists, however, BRICS is a product of the ongoing global power shifts, and has the potential to evolve into a major instrument in shaping the architecture of global governance. As a unified grouping, BRICS could play midwife at a time the qualitative reordering of power symbolizes the birth-pangs of a new international order.
On burning international geopolitical issues like Iran and Syria, BRICS actually stands out as the voice of moderation and caution, seeking to provide the balance to the interventionist impulse of Western powers. But as the recent UN human-rights resolution on Sri Lanka showed, the grouping is badly split on other issues. The group’s main economic giant, China, is also the political outlier that rejects the very concept of national elections and is ever ready to advance its commercial and strategic interests by coming to the succour of a fellow human rights-abusing state.
Economically, BRICS is likely to remain the most-important source of global growth. The BRICS grouping, after all, represent more than a quarter of the Earth’s landmass, over 41 per cent of its population, almost 25 per cent of world GDP, and nearly half of all foreign-exchange and gold reserves. In a spectacular reversal of fortunes, the developing economies, with their large foreign-currency holdings, now finance the mounting deficits of the wealthy economies.
In this light, BRICS, with its members’ collective weight, can exercise significant global financial clout if it gets its act together. BRICS indeed can be called the R-5, after the names of its members’ currencies — the real, rouble, rupee, renminbi, and rand.
Yet in the period since the Russia-India-China (RIC) initiative enlarged in 2008 to include Brazil and take the name of BRIC — a term coined by a Goldman Sachs economist in 2001 — the group has remained a loose, informal bloc. Last year’s expansion of BRIC into BRICS with South Africa’s addition has only accentuated the challenge to establish an institutional structure and a common plan of action, even as this enlargement threatens to make irrelevant yet another initiative — IBSA (India, Brazil, and South Africa).
For Brazil, South Africa, Russia, and India, BRICS serves as a forum to underscore their rising economic clout and showcase their emergence as global players. But for China, which needs no recognition as a rising world power, BRICS offers tangible — not just symbolic — benefits. China indeed has cast a lengthening shadow over the grouping, seeking, for example, to control the proposed common development bank — something India and Russia, in particular, are loath to accept.
At a time when China is under pressure for continuing to manipulate the value of the renminbi in order to artificially reduce the price of its goods and services abroad, the BRICS framework offers it a platform to expand its currency’s international role. As part of its quest to build the renminbi into an international currency, a cash-rich China is to extend renminbi loans to the other members of BRICS.
Lending and trading in renminbi will further boost China’s international status and clout. China’s undervalued currency and hidden export subsidies, however, have been systematically undermining manufacturing in other BRICS states, especially India and Brazil.
BRICS proponents still hope the group can serve as a catalyst for international institutional reforms. The global institutional structure has remained virtually static since the mid-20th century despite the rise of non-Western economic powers, and even the G-20’s formation was an improvisation designed to defer genuine reforms.
Yet, on international institutional reforms, China is hardly on the same page as the other BRICS members. It is a revisionist power concerning the global financial architecture, seeking an overhaul of the Bretton Woods system. But it is a status quo power with respect to the UN system, and unwaveringly opposes expansion of the Security Council’s permanent membership. It wishes to remain Asia’s sole country with a permanent seat — a position that illuminates its effort to regionally confine India.
BRICS can become a pressure group in international relations only if its members are able to agree on a common action-plan. The BRICS states, for example, are generally united in their frustration with — but not in their proposed response to — the dollar’s status as the world’s reserve currency. Indeed, the most-important bilateral relationship each BRICS country has is with the US. As long as BRICS is unable to present itself as a unified bloc seeking to push specific changes in the present ailing international order, it will continue to be seen by the old powers as embodying an aspiration rather than a threat.
Despite the steps agreed upon at the New Delhi summit, it is uncertain whether BRICS will evolve into a cohesive grouping with defined goals and institutional mechanisms to help pluralize the global order or remain an initiative with a beguiling acronym that does little more than annually bring together its leaders for more discussions. If it is able to develop brick by brick, BRICS could find itself on the evolutionary path treaded by the now-supplanted G-7, which also began as a discussion platform before advancing to joint coordination and action among its members on key international issues.
Courtesy Brahma Chellany
