BRICS & World Balance

The entire BRICS project is centred around the question of whether countries at the nether end of the neo-colonial system can break free through mutual trade and cooperation, writes Vijay Prashad.

Peter Gorban, U.S.S.R., “Field Camp. The Izvestiya.,” 1960.

By Vijay Prashad
Tricontinental: Institute for Social Research

In 2003, high officials from Brazil, India and South Africa met in Mexico to discuss their mutual interests in the trade of pharmaceutical drugs.

India was and is one of the world’s largest producers of various drugs, including those used to treat HIV-AIDS. Brazil and South Africa were both in need of affordable drugs for patients infected with HIV as well as a host of other treatable ailments.

But these three countries were barred from easily trading with each other because of strict intellectual property laws established by the World Trade Organisation.

Just a few months prior to their meeting, the three countries formed a grouping, known as IBSA, to discuss and clarify intellectual property and trade issues, but also to confront countries of the Global North for their asymmetrical demand that the poorer nations end their agricultural subsidies. The notion of South-South cooperation framed these discussions.

Interest in South-South cooperation dates to the 1940s, when the United Nations Economic and Social Council established its first technical aid programme to assist trade among the new post-colonial states in Africa, Asia and Latin America.

Six decades later, just as IBSA was formed, this spirit was commemorated by the United Nations Day for South-South Cooperation on Dec. 19, 2004. At this time, the U.N. also created the Special Unit for South-South Cooperation (10 years later, in 2013, this institution was renamed as the United Nations Office for South-South Cooperation), which built upon the 1988 agreement on the Global System of Trade Preferences Among Developing Countries.

As of 2023, this pact includes 42 member states from Africa, Asia and Latin America that are collectively home to 4 billion people and have a combined market of $16 trillion (roughly 20 percent of global merchandise imports). It is important to register that this longstanding agenda to increase trade among Southern countries forms the pre-history of the BRICS, set up in 2009 and presently made up of Brazil, Russia, India, China and South Africa.

Madhvi Parekh and Karishma Swali, India, “Kali I,” 2021–22.

The entire BRICS project is centred around the question of whether countries at the nether end of the neo-colonial system can break out of that system through mutual trade and cooperation, or whether the larger countries (including those in the BRICS) will inevitably enjoy asymmetries of power and scale against smaller countries and therefore reproduce inequalities rather than transcend them.

Tricontinental’s latest dossier, on Marxist dependency theory, calls into question any capitalist project in the South that believes it can somehow break free from the neo-colonial system by importing debt and exporting cheap commodities. Despite the limitations of the BRICS project, it is clear that the increase in South-South trade and the development of Southern institutions (for development financing, for instance) challenges the neo-colonial system even if it does not immediately transcend it. Tricontinental: Institute for Social Research has been closely following the developments and contradictions of the BRICS project from its inception and continue to do so.

Later this month, the 15 BRICS summit will take place in Johannesburg from Aug. 22–24. This meeting comes as two of the group’s members, Russia and China, are facing a New Cold War with the United States and its allies, while the other members face immense pressure to be drawn into this conflict. Below, you will find briefing No. 9, published in collaboration with No Cold War, which offers a brief but necessary primer of the upcoming BRICS summit. 

The BRICS at an Historic Crossroads

The upcoming 15th BRICS Summit (Aug. 22-24) in Johannesburg, South Africa, has the potential to make history. The heads of state of Brazil, Russia, India, China and South Africa will gather for their first face-to-face meeting since the 2019 summit in Brasilia, Brazil. The meeting will take place 18 months since the beginning of military conflict in Ukraine, which has not only raised tensions between the U.S.-led Western powers and Russia to a level unseen since the Cold War but also sharpened differences between the Global North and South.

There are growing cracks in the unipolar international order imposed by Washington and Brussels on the rest of the world through the North Atlantic Treaty Organisation (NATO), the international financial system, the control of information flows (in both traditional and social media networks), and the indiscriminate use of unilateral sanctions against an increasing number of countries. As United Nations Secretary-General António Guterres recently put it, “the post-Cold War period is over. A transition is under way to a new global order.”

In this global context, three of the most important debates to monitor at the Johannesburg summit are: (1) the possible expansion of BRICS membership, (2) the expansion of the membership of its New Development Bank, or NDB, and (3) the NDB’s role in creating alternatives to the use of the U.S. dollar.

According to Anil Sooklal, South Africa’s ambassador to BRICS, 22 countries have formally applied to join the group (including Saudi Arabia, Argentina, Algeria, Mexico and Indonesia) and a further two dozen have expressed interest. Even with numerous challenges to overcome, the BRICS are now seen as a major driving force of the world economy and of economic developments across the Global South in particular.

Lygia Clark, Brazil, “O Violoncelista” or “The Violoncellist,” 1951.

 The BRICS Today

In the middle of the last decade, the BRICS experienced a number of problems. With the election of Prime Minister Narendra Modi in India (2014) and the coup against President Dilma Rousseff in Brazil (2016), two of the group’s member countries became headed by right-wing governments more favourable to Washington. Both India and Brazil retreated in their participation in the group.

The de facto absence of Brazil, which from the outset had been one of the key driving forces behind the BRICS, represented a significant loss for the consolidation of the group.

These developments undermined and hampered the progress of the NDB and the Contingent Reserve Arrangement (CRA), established in 2015 — which represented the greatest institutional achievement of the BRICS to date. Although the NDB has made some progress it has fallen short of its original objectives.

To date, the bank has approved some $32.8 billion in financing (in fact, less than that has been issued), while the CRA — which has $100 billion in funds to assist countries that have a shortage of U.S. dollars in their international reserves and are facing short-term balance of payments or liquidity pressures — has never been activated.

However, developments in recent years have reinvigorated the BRICS project. The decisions of Moscow and Beijing to respond to escalations of aggression in the New Cold War by Washington and Brussels; the return of Luiz Inácio Lula da Silva to the presidency of Brazil in 2022 and the consequent appointment of Dilma Rousseff to the presidency of the NDB; and the relative estrangement, to varying degrees, of India and South Africa from the Western powers have resulted in a “perfect storm” that seems to have rebuilt a sense of political unity in the BRICS (despite unresolved tensions between India and China).

Added to this is the growing weight of the BRICS in the global economy and strengthened economic interaction among its members.

In 2020, the global share of the BRICS’s Gross Domestic Product (GDP) in purchasing power parity terms – 31.5 percent – overtook that of the Group of Seven (G7) – 30.7 percent – and this gap is expected to grow.

Bilateral trade among BRICS countries has also grown robustly: Brazil and China are breaking records every year, reaching $150 billion in 2022; Russian exports to India tripled from April to December 2022, year-on-year, expanding to $32.8 billion; while trade between China and Russia jumped from $147 billion in 2021 to $190 billion in 2022, an increase of nearly 30 percent.

Ayanda Mabulu, South Africa, “Power,” 2020.

What’s at Stake in Johannesburg?

Faced with this dynamic international situation and growing requests for expansion, the BRICS face a number of important questions:

  1. In addition to providing concrete responses to interested applicants, expansion has the potential to increase the political and economic weight of the BRICS and, eventually, strengthen other regional platforms that its members belong to. But expansion also requires having to decide on the specific form that membership should take and may increase the complexity of consensus building, with a risk of slowing the progress of decision making and initiatives. How should these matters be dealt with?
  2. How can the NDB’s financing capacity be increased, as well as its coordination with other development banks of the Global South and other multilateral banks? And, above all, how can the NDB, in partnership with the BRICS’ network of think tanks, promote the formulation of a new development policy for the Global South? Since the BRICS member countries have solid international reserves (with South Africa having a little less), it’s unlikely that they will need to use the CRA, instead, this fund could provide countries in need with an alternative to the political blackmail of the International Monetary Fund, which requires developing countries to enact devastating austerity measures in exchange for loans.
  3. BRICS is reported to be discussing the creation of a reserve currency that would enable trade and investment without the use of the U.S. dollar. If this were established it could be one more step in efforts to create alternatives to the dollar, but questions remain. How could the stability of such a reserve currency be ensured? How could it be articulated with newly created trade mechanisms which do not use the dollar, such as bilateral China-Russia, China-Brazil, Russia-India and other arrangements?
  4. How can cooperation and technology transfer support the re-industrialisation of countries like Brazil and South Africa, especially in strategic sectors such as biotech, information technology, artificial intelligence and renewable energies, while also fighting poverty and inequality, and achieving other basic demands of the peoples of the South?

Leaders representing 71 countries of the Global South have been invited to attend the meeting in Johannesburg. China’s President Xi Jinping, Russian President Vladimir Putin, Brazil’s Lula, Indian’s Prime Minister Narendra Modi, South Africa’s President Cyril Ramaphosa and Dilma Rousseff have a lot of work to do, to answer these questions and make progress on the urgent matters in global development.

Mao Xuhui, China, “Paternalism,” 1992.

Tricontiental continues to track these developments, neither with the belief that the BRICS project offers global salvation, nor with the cynicism that dismisses it as nothing new. History is moved, not by purity, but by the world’s contradictions.

As these major countries of the South meet in Johannesburg, they will confront the vast inequities in South Africa. These fissures are the grist for the poems of Vonani Bila, whose voice rises out of Shirley Village (Limpopo) and reminds us of the long walk ahead, through the BRICS project and beyond:

When the sun recedes
into the Soutpansberg,
Giyani Block puts on a
black adder coat;
a mirror of death and despair.

Doctors and nurses stand on their feet.
They shall not rest when the workers’ strike
ignites its furious flame.
They’re on tiptoe, looking up,
wrestling the faceless, tailless monster.

Vijay Prashad is an Indian historian, editor and journalist. He is a writing fellow and chief correspondent at Globetrotter. He is an editor of LeftWord Books and the director of Tricontinental: Institute for Social Research. He is a senior non-resident fellow at Chongyang Institute for Financial Studies, Renmin University of China. He has written more than 20 books, including The Darker Nations and The Poorer Nations.  His latest books are Struggle Makes Us Human: Learning from Movements for Socialism and, with Noam Chomsky,  The Withdrawal: Iraq, Libya, Afghanistan and the Fragility of U.S. Power.

This article is from Tricontinental: Institute for Social Research.

The views expressed are solely those of the author and may or may not reflect those of Consortium News.

10 comments for “BRICS & World Balance

  1. Siddhart
    August 20, 2023 at 13:40

    Good article but why is the NDB financing being calibrated in USD? Why not use one of the BRIC’s member country’s currency? For example, annual financing is 3.28 trillion roubles.

  2. Anon
    August 18, 2023 at 20:24

    Hate to put ultimate irony into words:
    $$$(tability) = Credit…

  3. CaseyG
    August 18, 2023 at 15:59

    Besides starting wars—-what else has America DONE LATELY? I wish—-as the world gets smaller and smaller–that more nations were able to rise to their potentials. I also wish that America would not travel around the world instigating wars. Where is that,” more perfect union, ” anyway? Gone with the wind? Or is sanity truly possible?

  4. john mackoviak
    August 18, 2023 at 15:30

    I agree with V J Prashad!

  5. jef
    August 18, 2023 at 14:13

    I believe that all of these developments in the Global South would have brought tears of joy to Muammar Muhammad Abu Minyar al-Gaddafi’s eyes.

    There is so much he could have done to support and champion this historic movement.

    His murder and the destruction of Libya is a great crime against humanity.

    I truly hope this movement will not suffer any more such tragic violence.

  6. Robert
    August 18, 2023 at 11:06

    I wish there was a quick ( 2 years) way to create another world currency but it’s apparently not easy to do. Across the world, the biggest benefit to having an alternative to the USD is that it would diminish the value of the United States ability to sanction, embargo, and tariff countries at the drop of a hat.

    Trump would announce each new tariff in the giddy manner of an adolescent. Apparently no one ever told him, and he never figured out for himself, that the tariffs, like sanctions and embargoes tend to harm everyday people more than the wealthy. So onward and upward to the BRICS and the creation of a BRICS currency. It’s long overdue.

  7. Selina Sweet
    August 18, 2023 at 11:05

    I am so stirred by the fantastic images you provide. Simply marvelous and make one travel into the worlds of no words where truths, experiential, beyond words are felt and known. With gratitude.

    • Valerie
      August 20, 2023 at 12:58

      Me too Selina. The artwork and poetry is so poignant, and as you say, stirring and beyond words, which sometimes are meaningless because of their shallowness. Words get spoken then die on the air. Art and poetry remain.

  8. Rudy Haugeneder
    August 18, 2023 at 10:41

    The one good thing about large regional wars such as the Ukraine conflict, is that they force the restructure economies and the global financial structures that create them in the first place. Short of global war, this is excellent and on reflection, repeats what has happened throughout history. Sadly that same history also shows that the emerging systems systematically repeat the past and too will ultimately fail, unless extreme global climate change becomes terminal to life as we have always known it, meaning that the downfall of Sapiens will allow the planet to rebirth will new species that take dominion.

  9. Vera Gottlieb
    August 18, 2023 at 10:22

    United they’ll stand…divided they’ll fall (again).

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