The 15th BRICS summit, convened in Johannesburg from August 22 to 24, marked a significant turning point for the BRICS bloc amidst the backdrop of the Russia-Ukraine conflict and the trade tensions between China and the US. Comprising major emerging economies – Brazil, Russia, India, China, and South Africa – the bloc represents approximately 41% of the global population, with its primary focus rooted in fostering economic cooperation. However, this summit bore added political significance within the evolving global order. Despite its emphasis on a multipolar world order and equitable systems for developing nations through collaborative efforts, BRICS often finds itself perceived as an institution espousing an ideology that is viewed as adversarial to Western powers.
While leaders from Brazil, South Africa, India, and China physically attended the summit, the absence of Russian President Putin was conspicuous due to concerns that his host country, South Africa, could be compelled to apprehend him under an International Criminal Court warrant for alleged war crimes. Notably, amidst internal disagreements among member states regarding the bloc’s expansion, a historic consensus was reached to welcome new members. The key agendas of the BRICS summit included:
1.Expansion of Membership: The summit’s most pivotal outcome was the decision to expand the bloc’s membership to encompass six new nations – Argentina, Egypt, Iran, Ethiopia, Saudi Arabia, and the United Arab Emirates. This expansion, scheduled for commencement in January 2024, generated keen interest from over 40 countries aspiring to join BRICS.
2.De-dollarization: Against the intricate geopolitical backdrop of “the West vs. the Rest,” BRICS members underscored the necessity of introducing a common currency to diminish dependence on the US Dollar for trade. This call for de-dollarization stemmed from the financial challenges developing countries encounter due to elevated interest payments on dollar-denominated debts and the exchange rate volatility arising from a strong dollar. Although the concept of national currency-based payment systems was introduced by BRICS, divisions persist among member states. While Russia and China advocate for this initiative, Brazil and India exhibit reservations. Presently, leaders are exploring the feasibility of conducting trade using local currencies, underscoring a pragmatic approach to de-dollarization.
3.Promotion of Multipolarity: A core theme within BRICS is the endorsement of multipolarity, aiming to establish an equitable global system through mutual cooperation, unfettered trade, and uniform norms. This agenda is firmly opposed to “neo-interventionism,” “colored revolutions,” and “information dominance,” which have become focal points of the group’s advocacy.
Political Implications:
The shared history of resisting Western colonialism and inequality among BRICS member states underscores their distinct political standing. Despite contributing to 26% of the global GDP, the bloc holds merely 15% of the voting power at the IMF. Amidst the Russia-Ukraine conflict and escalating geopolitical tensions between China and the US, coupled with the membership expansion, BRICS has emerged as a formidable challenger to the US-led global hierarchy. The summit featured prominent leaders such as China’s Xi Jinping and Russia’s Vladimir Putin, who expressed robust criticisms of Western powers. Xi Jinping urged the group to reject exclusivist alliances and ideological rivalries, while Putin denounced interventions in sovereign states and attributed economic predicaments to the West.South Africa, the host nation, assumed a notable position due to allegations of supporting Russia, leading to friction with the USA. Tensions further heightened with the presence of a Russian aircraft in conflict zones, delivering armaments to Russia, straining South Africa’s global relationships. India, while maintaining its historical ties with Moscow, seeks to strike a delicate balance between Western powers and other geopolitical actors. The China-India border tension remained a pertinent issue, addressed by Prime Minister Modi and President Xi during the summit. The commitment to de-escalation underscored the significance of diplomatic discussions preceding the summit.
The membership expansion of the bloc has potential to challenge the influence of the G7 in the global economy. Indian Prime Minister Modi’s view on BRICS’ membership expansion setting a precedent for international institutions to adapt reflects the broader aspiration for India’s permanent UN Security Council membership. This expansion could potentially amplify tensions between BRICS and Western powers unless a collective agenda fostering political stability is effectively managed.
Economic Implications:
Although the BRICS member nations diverge in political ideology and economic systems, their collective control over pivotal global resources carries economic significance. Together, the five nations surpass the G7 in combined GDP based on purchasing power parity. Notably, South African President Cyril Ramaphosa asserted that the global financial system has evolved into a tool for geopolitical rivalry. This diversified economic framework within BRICS imparts resilience.
The inclusion of new members would elevate the bloc’s share of global GDP from 26% to 29% and trade in goods from 18% to 21%. The New Development Bank’s role remains paramount. China’s robust economic performance, particularly in foreign trade and investment, bolsters its position within the bloc. Simultaneously, China champions industrialization in the global south and endeavors to create a common currency to serve its interests. Russia reaffirmed its commitment to economic collaboration and support for African nations. Notably, with the inclusion of new members, Russia’s capacity to diversify exports gains prominence.
India, an emerging economic power, finds ample opportunities within BRICS, albeit while navigating its relationship with China. The bloc offers a platform to propagate initiatives like “Make in India” and “Digital India.” Similarly, Brazil, South Africa, and the new members harbor unique economic potential, though challenges persist. For instance, Iran’s resource-rich economy grapples with sanctions, Ethiopia emerges from internal conflict, and Saudi Arabia seeks to diversify its oil-centered economy.
India’s strategic approach:
India’s foreign policy strategy, coined as “strategic hedging,” finds its roots in the tenure of Prime Minister Rajiv Gandhi. This approach entails adroitly balancing relationships with major powers to safeguard national interests. Notably, India’s response to US-led sanctions on Russia illustrates this strategy. Despite global pressure, India sustained its trade links with Russia in a distinctive manner.
In the context of potential collaborations between China and Russia that might lean towards an anti-Western stance, India’s strategic approach diverges. This delicate balancing act is central to India’s diplomatic strategy, allowing it to navigate the complex geopolitical landscape.
A clear manifestation of India’s role can be observed in its upcoming role as host for all BRICS partners at the G20 summit scheduled for September. This event serves as a prime opportunity for India to advance its objective of empowering the global South while narrowing the development divide between advanced and emerging economies. By participating in the G20 summit, India can effectively advocate for reforms across key domains, including the global financial system and the governance structures of international institutions. Such reforms hold the potential to render these systems more attuned to the requirements of developing nations.
In light of its stature as a prominent power in Asia, India naturally assumes the role of a counterbalance to China’s influence within the region. This positioning not only bolsters stability at the regional level but also garners the attention of Western powers. The Western world acknowledges India’s potential as a vital strategic ally, and the prospect of severing ties with India is unpalatable to them. Evidently, India’s membership in influential international groupings – such as BRICS, the Shanghai Cooperation Organization, G20, QUAD, and the East Asia Summit – underscores its proactive diplomatic endeavors aimed at fostering collaborative global initiatives and safeguarding its own national interests.
