With 37 percent of the global economy and 46 percent of the world’s population, and with a now considerably enhanced presence in the Middle East, a region historically dominated by the US, the significance of BRICS+6 cannot be ignored, writes Jeremy Cronin
The BRICS 15th summit meeting held in Johannesburg in late-August admitted six new members: Argentina, Egypt, Iran, Ethiopia, Saudi Arabia and the United Arab Emirates. They are now set to join Brazil, Russia, India, China and South Africa. The six were chosen from a list of 22 that had formally applied, with as many as 40 countries reportedly expressing an interest in membership. The statement from the BRICS summit indicated further admissions will be considered in the near future. What significance should be read into these developments?
In some quarters there has been an exaggerated hype about BRICS+6 as a new anti-imperialist front. While, in varying degrees, some of the existing and new members have an anti-imperialist stance, this is not remotely the case with others like Egypt, Saudi Arabia or the UAE. BRICS+6 is clearly a disparate group both economically and politically. Moreover, some of its members are involved in relatively serious regional tensions (India and China, Ethiopia and Egypt, Iran and Saudia Arabia). But with 37 percent of the global economy and 46 percent of the world’s population, and with a now considerably enhanced presence in the Middle East, a region historically dominated by the US, the significance of BRICS+6 cannot be ignored.
All of this occurs in the context of a changing global conjuncture. UN Secretary-General Antonio Guterres, who attended the BRICS summit, recently observed that “the post-Cold War period is over. A transition is under way to a new global order.” BRICS+6 needs to be seen as one attempt to influence the shape of that emerging order. Less than three weeks after the BRICS summit, US secretary of state, Antony Blinken, echoed Guterres (“a new era is ending, a new one is beginning”) but, as can be expected, there was a bellicose twist to Blinken’s observation. He frankly expressed what has been apparent for some time. Facing challenges to post-1990 US unilateral hegemony, Washington is determined to lead the world “from a position of strength”, Blinken said, effectively into a new Cold War in which Russia is cast as the “most immediate threat”, with China “posing the biggest long-term challenge.”
BRICS expansion is both a response to these shifting tectonic plates and a symptom of the complex and thoroughly uneven nature of the process underway. The 2008 Great Recession with its epicentre in the US, persisting secular stagnation throughout the advanced capitalist world, the failing or, at the very least, the stale-mated NATO proxy war in the Ukraine, US attempts to reverse hyper-globalisation through re-shoring and near-shoring manufacturing capacity, and the deepening social, economic and environmental crisis not least through much of the global South: all of these are indicators of the crisis of the US-led, World Bank, IMF and NATO-enforced unipolar global dominance that has prevailed for some three decades.
What, if anything, can BRICS+6 hope to achieve?
Perhaps the most notable feature of the expansion of membership is the obvious strategic intent to consolidate energy security for both producers and consumers in the face of the US-dominated petrodollar empire. New members Saudi Arabia, Iran and the UAE are key members of OPEC, responsible for over half of its output. Harsh sanctions and the unilateral freezing (in effect imperialist pillaging) of Iranian, Venezuelan and now Russian foreign currency reserves (to the tune of $300 billion in the case of Russia), will not have gone unnoticed by other oil and natural gas producing countries like Saudi Arabia and the UAE with large foreign exchange currency reserves held in Western banks. The Saudis are reported to be considering accepting Chinese yuan.
The sabotage of the Nord Stream 1 and 2 natural gas pipelines, forcing the US’s own western European allies into reliance on more expensive US-supplied gas, underlines the importance of energy supply lines. Here the strategic location of some of the new BRICS members at key maritime chokepoints should be noted – Egypt (the Suez Canal), Saudi Arabia (the Red Sea Basin), Ethiopia (close to the Bab-el-Mandeb strait), and Iran (with its direct access to the Hormuz strait).
For countries subjected to harsh, unilateral imperialist sanctions (notably Iran, Russia and China), BRICS offers the potential of further bypassing these. But, indeed, for all participants BRICS membership in particular is seen as a means to alter global trade networks.
Bilateral trade among BRICS countries has grown significantly in recent years. Notable in this regard has been the soaring Brazil and China trade, while Russian exports to India tripled from April to December 2022 year-on-year. Trade between Russia and China jumped from $147 billion in 2021 to $190 billion in 2022. This growing intra-BRICS trading offers other important possibilities. Within the BRICS+6 grouping bilateral trade in local currencies is being actively promoted. Brazil and China have recently entered a local currency trade arrangement, as have India and the UAE. The relative currency values are fixed by agreement among the partners and the dollar is no longer needed either as a unit of account, or as a medium of circulation. This is particularly important for countries with a dollar shortage.
However, as economist Prabhat Patnaik has noted, while bilateral or even multi-lateral trading through local currencies will contribute to some de-dollarisation of global trade, and increase the stock of liquidity in the global economy, it will not automatically overcome the problem of external debt arising between the countries involved. Going forward, from a developmental perspective, this will be one of the major challenges for BRICS if its stated commitment to contributing to a more just multilateral, world order is to be achieved. The balance of bilateral trade between a likely large creditor (China for instance) and a weaker debtor (South Africa, say), even if the trade is in yuan and rands, will result in a growing external debt for the deficit country with further under-development. To counter this trajectory the surplus country will need to significantly ramp up its purchase of goods and services from the deficit country. Put another way, this will require significant investment in re-industrialisation of countries like Brazil, Argentina, Egypt and South Africa, and related infrastructure development and technology transfers.
It is here that the BRICS Bank (the New Development Bank) has a role to play. Dilma Rousseff, former Brazilian president and now director of the Bank, has emphasised that, while there is no intention to provide loans for debt settlement, there is to be a strong focus on expanding trade in local currencies and in infrastructure investment, not just to BRICS members but to the Global South in general.
The ideological diversity of BRICS members is an obvious challenge. It combines old enemies, progressives and some of the world’s most reactionary regimes. The ability to act with relative strategic cohesiveness will remain a major challenge. Changes to national political parties in power are also likely to impact on the relative dynamism and coherence of the group. The election of prime minister Narendra Modi (2014) and the coup against president Dilma Rousseff (2016) resulted in both India and Brazil becoming passive in their participation in BRICS. This was a setback particularly in the case of Brazil which had been a dynamic champion from the outset. The 2022 return of Luiz Inacio Lula da Silva to the Brazilian presidency is, therefore, a positive development. But other uncertainties are looming in the immediate future, with an extreme right-winger, for instance, the reported front-runner for presidency in Argentine’s 23 October elections.
If the ideological diversity of BRICS is a challenge, it is also, in some respects, a potential asset. It helps to undercut the strategic agenda of the Bidens and Blinkens who hope to reverse waning US unilateral domination by building a powerful US-led bloc encircling what they hope to be an increasingly isolated Russia and especially China. In this way they seek to re-play the last Cold War. Like the broad refusal of the majority of the Global South to line up behind a NATO world-view on Ukraine, the Johannesburg BRICS summit at least demonstrated a politically diverse willingness not to be lined up in this way.
Jeremy Cronin a veteran South African Communist Party Central Committee and Politburo member, former SACP deputy general secretary, a former government deputy minister and former political prisoner. He is also a poet.
This article was first published in Liberation Journal, September 2023
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