Dear friends,
Greetings from the Tricontinental Institute for Social Research.
On the last day of the BRICS summit in Johannesburg, South Africa, 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 (UAE) . The BRICS partnership now covers 47.3% of the world’s population, with a combined global gross domestic product (purchasing power parity or PPP) of 36.4%. In comparison, the G7 countries (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States) represent only 10% of the world population and their share of global GDP (according to purchasing power parity) 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 crop production and total metal production volumes, show the immense power of this new grouping. Celso Amorim, adviser to the Brazilian government and one of the architects of the BRICS during his term as foreign minister (between 2003 and 2011), said of the new development that “the world can no longer be indoctrinated by the G7”.
Certainly, despite all the hierarchies and internal challenges, the BRICS countries now represent a larger share of global GDP than the G7, which continues to behave like the world’s executive power. More than 40 countries have expressed interest in joining the BRICS, although only 23 have applied for membership ahead of the South African meeting (including seven of the 13 countries in the Organization of the Petroleum Exporting Countries, OPEC). Indonesia, the world’s seventhlargest country by GDP (purchasing power parity), withdrew its application to join BRICS at the last moment but said it would consider joining later. Indonesian President Joko Widodo’s comments reflect the mood of the summit: “We must reject trade discrimination. Subsequent industrial stages must not be endangered. We must all continue to express equal and inclusive collaboration.”
Pillars of Life: Waiting [Pilares da vida: esperando]2018. / Tadesse Mesfin (Ethiopia)
BRICS does not operate independently of new regional formations that aim to build platforms outside Western control, such as the Community of Latin American and Caribbean States (Celac) and the Shanghai Cooperation Organization (SCO). Instead, participation in BRICS has the potential to strengthen regionalism for those who are already part of these regional forums. Both sets of interregional bodies trend toward a historical trend supported by key data analyzed by the Tricontinental Institute for Social Research using a number of reliable and widely available 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 United States’ share has fallen from 19.7% to just 15 over the same period .6% of global GDP (according to purchasing power parity) shrank despite its monopoly privilege. In 2022, the Global South, excluding China, had a GDP (in purchasing power parity terms) higher than that of the Global North.
The West, perhaps due to its rapid relative economic decline, is struggling to maintain its hegemony and is waging a new Cold War against emerging powers such as China. Perhaps the best evidence of the racial, political, military and economic designs of the Western powers can be summarized in a recent statement from the North Atlantic Treaty Organization (NATO) and the European Union (EU): “NATO and the EU play complementary roles. coherent and mutually reinforcing in support of international peace and security. We will continue to mobilize the coordinated tools at our disposal, whether political, economic or military, to pursue our common goals for the benefit of our billion citizens.”
Hameel morning rain [Chuva matinal]2022 / Alia Ahmad (Saudi Arabia)
Why did the BRICS welcome such a diverse group of countries, including two monarchies? When asked to reflect on the character of the new full member states, the President of Brazil, Luiz Inácio Lula da Silva, said: “What matters is not the person who governs, but the importance of the country.” We can understand the geopolitical importance of Iran and other countries that will join the BRICS countries.” 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.
Khark, 1958 / Houshang Pezeshknia (Iran)
This larger Brics configuration has now created an important energy group. Iran, Saudi Arabia and the United Arab Emirates are also members of OPEC, which together with Russia a leading member of OPEC+ now produces 26.3 million barrels of oil per day, accounting for almost 30% of global daily 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 enabled these two oilproducing countries to join the BRICS. This is not just about oil production, but also about establishing new global energy routes.
The Chinaled Belt and Road Initiative (BRI) has already created a network of oil and natural gas platforms in the Global South, integrated with the expansion of Port Khalifa and natural gas facilities in Fujairah and Ruwais in the United Arab Emirates in the development of Vision 2030 Saudi Arabia. There is full expectation that the enlarged BRICS countries will begin to coordinate their energy infrastructure outside of OPEC+, including the amount of oil and natural gas produced from the ground. Tensions between Russia and Saudi Arabia over oil levels have increased this year as Russia exceeded its quota to offset Western sanctions imposed on the country 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 [moeda chinesa]which undermines the structure of the petrodollar system (China’s other two main oil suppliers, Iraq and Russia, already receive payments in renminbi).
The hug [O abraço]19371944 / Juan Del Prete (Argentina)
Both the discussions at the BRICS summit and the final communiqué focused on the need to strengthen a financial and development architecture for the world that is not governed by the triumvirate of the International Monetary Fund (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, BRICS reiterated the importance of the “rulesbased multilateral trading system with the World Trade Organization at its core” and called for “a robust global financial security network with a [FMI] Quotabased and essentially adequately equipped.” His proposals do not represent a fundamental break with the IMF or the WTO; Instead, they propose a twopronged path: first, that the BRICS countries exercise more control and leadership over these organizations of which they are members but which have been bribed into a Western agenda; and second, that the BRICS countries realize their ambitions to build their own parallel institutions (such as the New Development Bank or NDB). Saudi Arabia’s huge investment fund is worth around $1 trillion and could partially finance the NDB.
The BRICS agenda to improve “the stability, reliability and fairness 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 countries using their own currencies for international trade rather than relying on the dollar. Although about 150 currencies in the world are considered legal tender, international payments almost always rely on the dollar (which, as of 2021, now accounts for 40% of payment flows on the Society for Worldwide Interbank Financial Telecommunications, or Swift, network).
Other currencies play a limited role, with the Chinese renminbi accounting for 2.5% of international payments. However, the emergence of new global messaging platforms such as India’s Interbank CrossBorder Payment System and Russia’s Financial Messaging System (SPFS), as well as regional digital currency systems, promises increasing use of alternative currencies. For example, cryptocurrency assets briefly offered a potential avenue for new trading systems before their asset valuations plummeted, and the Brics states recently approved the creation of a working group to study a bloc’s reference currency.
Following the expansion of the Brics states, the NDB announced that it would also expand its membership and that, according to its General Strategy for the period 20222026, 30% of all its financing 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 conditionality,” Dilma said. A loan is often granted on the condition that certain guidelines are implemented. We do not do that. We respect the politics of every country.”
I want to live, cry, survive, love, die [Quero viver, chorar, sobreviver, amar, morrer]2023 / Amir H. Fallah (Iran)
In their statement, the BRICS states write of the importance of “comprehensive reform of the UN, including its Security Council”. The UN Security Council currently has 15 members, of which five are permanent members (China, France, Russia, United Kingdom and USA). 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 its commitment to the BRICS process and strengthening its role in the G20.
The accession of Ethiopia and Iran to the Brics states shows how these large countries of the global south are responding to the West’s sanctions policy against dozens of countries, including two founding members of the Brics states (China and Russia). The Group of Friends in Defense of the UN Charter a Venezuelan initiative since 2019 brings together 20 UN member states that face the brunt of illegal US sanctions from Algeria to Zimbabwe. Many of these countries attended the BRICS summit as guests and look forward to joining the expanded bloc as full members.
We do not live in a time of revolutions. Socialists always strive to promote democratic and progressive tendencies. 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 an indication of the increasing loss of imperialism’s political hegemony.
Sincerely,
Vijay.
* Vijay Prashad is an Indian historian and journalist, Director General of the Tricontinental Institute of Social Research.
**This is an opinion piece. The author’s vision does not necessarily reflect the editorial line of the newspaper Brazil actually.
Editing: Rodrigo Chagas