The varying support for BRICS expansion is a sign of the increasing loss of imperialism’s political hegemony
President of the Republic Luiz Inácio Lula da Silva and presidents of BRICSfriendly countries pose for an official photo after the group’s meeting at the Sandton Convention Centre. Johannesburg, South Africa.
On the last day of the BRICS summit in Johannesburg, the five founding states Brazil, Russia, India, China and South Africa welcomed six new members: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates. The BRICS partnership now covers 47.3% of the world’s population, with a combined global gross domestic product (GDP) measured at purchasing power parity (PPP) of 36.4%. In comparison, although the G7 countries (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States) represent only 10% of the world’s population, their share of global GDP measured in purchasing power parity terms is 30.4%. In 2021, the states that now make up the expanded BRICS group were responsible for 38.3% of global industrial production, while their G7 counterparts accounted for 30.5%. All available indicators, including agricultural production and total metal production volumes, show the immense power of this new grouping.
Commenting on the new development, Celso Amorim, an adviser to the Brazilian government and one of the architects of BRICS during his previous term as foreign minister, said that “the world can no longer be dictated by the G7.” Certainly, despite their hierarchies and internal challenges, the BRICS countries now represent a larger share of global GDP than the G7, which continues to function as the world’s executive body. More than 40 countries have expressed interest in joining the BRICS, although only 23 have applied for membership ahead of the meeting in South Africa (including seven of the 13 countries in the Organization of the Petroleum Exporting Countries (OPEC). Indonesia, as measured by GDP in purchasing power parity terms The world’s seventhlargest country, withdrew its BRICS candidacy at the last moment but said it would consider joining at a later date. Indonesian President Joko Widodo’s comments reflect the mood of the summit: “We must end trade discrimination reject. Industrial production must not be damaged. We must continue to promote equal and inclusive cooperation.”
BRICS does not operate independently of new regional formations that seek to build platforms beyond the reach of the West, such as the Community of Latin American and Caribbean States (CELAC) and the Shanghai Cooperation Organization (SCO). Instead, BRICS membership has the potential to strengthen regionalism for those who already belong to these regional forums. Both sets of interregional bodies follow a historical trend supported by key data analyzed by Tricontinental: Institute for Social Research using a variety of widely available and reliable global databases. The facts are clear: The Global North’s share of global GDP has fallen from 57.3% in 1993 to 40.6% in 2022, while the U.S. share has fallen from 19.7% to just 15 over the same period, according to PPC .6% of global GDP has declined despite its monopoly privilege. In 2022, the Global South (excluding China) had a GDP (in PPP) higher than that of the Global North. The West, perhaps due to its rapid relative economic decline, is struggling to maintain its hegemony by waging a new Cold War against emerging powers such as China.
Why did the BRICS include such a diverse group of countries, including two monarchies, into their fold? When asked about the character of the new full members, Brazilian President Luiz Inácio Lula da Silva said: “What matters is not the person who governs, but the importance of the country. We cannot deny the geopolitical importance of Iran and other countries that will join BRICS”. This is a measure of how the founding countries made the decision to expand their alliance. At the heart of BRICS growth are at least three issues: control over energy supplies and routes, control over global financial and development systems, and control over peace and security institutions.
A larger BRICS state has now created a formidable energy group. Iran, Saudi Arabia and the United Arab Emirates are also members of OPEC, which together with Russia, a key member of OPEC+, now produces 26.3 million barrels of oil per day, accounting for almost 30% of daily global oil production. However, Egypt, which is not a member of OPEC, is one of Africa’s largest oil producers, producing 567,650 barrels per day. China’s role in brokering an agreement between Iran and Saudi Arabia in April allowed these oilproducing countries to join the BRICS. This is not just about oil production, but also about establishing new global energy paths. The Chinaled Belt and Road Initiative has already created a network of oil and natural gas platforms around the Global South, including the expansion of the Khalifa port and natural gas facilities in Fujairah and Ruwais in the United Arab Emirates, as well as the Development integrated is Saudi Arabia’s Vision 2030. There is an expectation that the enlarged BRICS countries will begin to coordinate their energy infrastructure outside of OPEC+, including the amount of oil and natural gas extracted from the earth. Tensions between Russia and Saudi Arabia over oil levels have eased this year as Russia exceeded its quota to offset Western sanctions over the war in Ukraine. Now these two countries will have another forum outside of OPEC+ and with China at the table to develop a common energy agenda. Saudi Arabia plans to sell oil to China in renminbi (RMB), undermining the structure of the petrodollar system. China’s other two major oil suppliers, Iraq and Russia, already receive payments in RMB.
CONTINUED AFTER RECOMMENDATIONS
Discussions at the BRICS summit and its final communication focused on the need to strengthen a global financial and development architecture that is not governed by the trio of IMF, Wall Street and the US dollar. However, BRICS does not seek to bypass established global trade and development institutions such as the World Trade Organization (WTO), the World Bank and the IMF. For example, the BRICS reiterated the importance of “the rulesbased multilateral trading system, with the WTO at its core” and called for “a robust global financial safety net with a [FMI] Quotabased and adequately funded at the center.” Their proposals do not fundamentally break with the IMF or the WTO; instead, they offer a twopronged path: first, for the BRICS to exercise more control and leadership over these organizations to which they belong but which have been bribed to serve a Western agenda, and second, for the BRICS states to realize their ambitions to build their own parallel institutions (like the New Development Bank or NDB). Saudi Arabia’s huge investment fund is worth nearly $1 trillion, which could partially finance the NDB. The BRICS agenda to improve “the stability, reliability and equity of the global financial architecture” is primarily driven by “the use of local currencies, alternative financial arrangements and alternative payment systems.” The concept of “local currencies” refers to the increasing practice of States to use their own currencies for crossborder trade instead of relying on the dollar. Although about 150 currencies are considered legal tender worldwide, crossborder payments are almost always based on the dollar (which accounts for 40% of transactions on the Society for Worldwide Interbank Financial Telecommunications (SWIFT) network as of 2021). Other currencies play a limited role, with the Chinese RMB accounting for 2.5% of crossborder payments. However, the emergence of new global messaging platforms such as China’s CrossBorder Interbank Payment System, India’s Unified Payments Interface and Russia’s Financial Messaging System (SPFS), as well as regional digital currency systems, is promising. For example, cryptocurrency assets briefly provided a possible avenue for new trading systems before their asset valuations plummeted, and the BRICS countries recently approved the creation of a working group to study a BRICS benchmark currency. Following the BRICS expansion, the NDB has stated that it will also expand its membership and, as stated in its “Overall Strategy 20222026,” 30% of all its funding will be in local currencies. As part of its framework for a new development system, its president Dilma Rousseff said the NDB would not follow the IMF’s policy of imposing conditions on borrowing countries. “We reject any kind of conditioning,” Rousseff said. “Often a loan is granted on the condition that certain guidelines are implemented. We do not do that. We respect each country’s guidelines.”
In their communication, the BRICS countries write about the importance of “comprehensive reform of the United Nations, including its Security Council.” The UN Security Council currently has 15 members, of which five are permanent members: China, France, Russia, the United Kingdom and the United States. There are no permanent members from Africa, Latin America or the world’s most populous country, India. To address these inequalities, BRICS offers its support to the “legitimate aspirations of emerging and developing countries in Africa, Asia and Latin America, including Brazil, India and South Africa, to play a greater role in international affairs.” The West’s refusal to grant these countries a permanent seat on the UN Security Council has only strengthened their commitment to the BRICS process and strengthening their role in the G20. The accession of Ethiopia and Iran to the BRICS shows how these large states of the global south are responding to the West’s sanctions policy against dozens of countries, including two founding members of the BRICS, China and Russia. The Group of Friends in Defense of the UN Charter a 2019 Venezuelan initiative brings together 20 UN member states facing the consequences of illegal US sanctions, from Algeria to Zimbabwe. Many of these states attended the BRICS Summit as guests and look forward to joining the enlarged BRICS states as full members.
We do not live in a time of revolutions. Socialists always strive to advance democratic and progressive trends. As so often in history, the actions of a dying empire create common ground for its victims to seek new alternatives, however embryonic and contradictory. The varying support for BRICS expansion is a sign of the increasing loss of imperialism’s political hegemony.
Vijay Prashad is an Indian historian, editor and journalist. He is editor of LeftWord Books and director of Tricontinental: Institute for Social Research. He is a nonresident senior fellow at the Chongyang Institute of Financial Studies, Renmin University of China. He has written more than 20 books, including The Darkest Nations and The Poorest Nations. His most recent books are “The Struggle Makes Us Human: Learning from Movements for Socialism” and, with Noam Chomsky, “The Retreat: Iraq, Libya, Afghanistan, and the Fragility of US Power.” This article comes from Tricontinental: Institute for Social Research. The opinions expressed are solely those of the author and may or may not reflect those of Consortium News.
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