BRICS has become the most authoritative organisation in the Global South. It cannot be compared to any other existing organisation because it is unique regarding norms, representation and institutional structure. It is neither a regional organisation nor a cohesive political forum like the G-7. It includes countries which are diverse in terms of political systems, economies and cultures. There are three democracies and two authoritarian systems. BRICS is essentially a political and economic forum consisting of the leading powers of the Global South. The 15th Summit at Johannesburg is an important milestone for BRICS, which will shape its future in the coming years.
The Financial Express Online interviewed Dr Rajan Kumar, Associate Professor, School of International Studies, Jawaharlal Nehru University, Delhi. He has worked extensively on this topic, and his co-edited book, Locating BRICS in the Global Order: Perspectives from the Global South, was published in 2023 by Routledge, London.
Following are excerpts:
Why has BRICS become so relevant in global governance?
Three developments in particular have added to the organisation’s credibility: its economic dynamism, gradual institutionalisation, and resisting Western pressures.
Despite inconsistencies and fluctuations, the BRICS as a bloc registered remarkable growth in the last two decades. The share of BRICS in the global GDP grew from 18 per cent in 2010 to 26 per cent in 2021 (UNCTAD Report, 2023). The combined GDP of the BRICS at $26 trillion in 2022 was slightly bigger than the US GDP. BRICS’ share in global trade is about 18 per cent. The FDI inflow in BRICS countries increased from 11 per cent ($84 billion) in 2001 to 22 per cent ($ 355 billion) in 2021. The FDI outflow from BRICS to other countries increased from 1 per cent in 2001 to 20 per cent. Therefore, at 26 per cent of the global GDP, the BRICS economy is rivalling G7’s 44 per cent. The G7 economy was 65 per cent of global GDP in 2000. If this trend continues, the BRICS economy will surpass the G-7 economy by 2030.
Second, the Global South has rarely created successful multilateral institutions. The NAM and G-77 turned out to be too unwieldy and unmanageable. In contrast, the BRICS has become a game-changer. It has conducted its affairs smoothly and has produced the New Development Bank and the Contingency Reserve Arrangement. These institutions are funding several projects in the Global South.
Third, the BRICS has not succumbed to pressures from the West. For instance, none of the countries of the BRICS acquiesced to Western sanctions on Russia. Western sanctions have not succeeded primarily because of the BRICS. BRICS came under criticism from the West, but its status increased in the Global South. Countries are vying for membership. It has become an ‘Ivy League’ in the Global South.
What is the significance of the 15th BRICS Summit in Johannesburg?
The 15th BRICS Summit in Johannesburg has drawn a lot of international media attention because of the following reasons: first, after the Covid pandemic, this is the first in-person Summit since 2019. Second, the prospect of the participation of Russian President Vladimir Putin created controversies. South Africa is a member of the International Criminal Court, which issued an arrest warrant against Putin for the deportation of Ukrainian children. President Putin dropped the plan to participate and saved South Africa from its predicaments. Third, BRICS countries are working on principles to include new members.
What are the issues related to the expansion of BRICS? Is there a consensus among members?
In principle, all the BRICS states agree on the expansion of the organisation. But the devil lies in details. There is no consensus on modalities of including new members. They disagree on standard protocols and the time of inclusion. India and Brazil apparently favour a gradual inclusion of new candidates, offering something akin to observer status before full integration. Further, it is an organisation of regional powers, and many states fear that their privileged status will be compromised if a rival regional power is included. BRICS is believed to be working on principles and standard protocols for new membership.
Beijing is pushing for speedy expansion for two primary reasons: to expand its global influence to counter the US, and create a favourable balance within the organisation. Moscow would agree on the first part but is cautious about the second part. New Delhi and Brasilia do not share Beijing’s enthusiasm. They do not want the organisation to become a club of authoritarian states which would skew the balance in China’s favour. They do not see BRICS as an anti-West organisation.
Forty countries have shown interest in the organisation, and about a dozen states have formally applied. Saudi Arabia, UAE, Argentina and Iran are potential candidates. Indonesia and Nigeria are other powerful contenders.
Is there a proposal for ‘BRICS Currency’? What are your views on that?
The use of the dollar as an instrument of war has alarmed states in the Global South. The West has frozen Russia’s reserve currency and assets. Russia has pushed for the de-dollarisation of intra-BRICS trade. Brazil’s president floated the idea of trade in ‘BRICS Currency’. That, however, is easier said than done. The dollar is used in about 84 per cent of cross-border international trade, compared to 4.5 per cent of the Chinese yuan.
More than BRICS-currency, expanding trade in local currency is a viable option. There is a fear that dependence on the yuan will increase if a new currency is floated. And that may not be acceptable to India. Chinese yuan is not an alternative to the dollar because of the absence of transparency in China’s financial system. It is regulated by the state and not by the open market. Therefore, these states should strengthen mechanisms to trade more in local currencies instead of developing a BRICS currency. Nearly 80 per cent of trade settlement between Russia and China is in Chinese yuan and Russian rubles. India and Russia have also begun to trade in local currencies. Brazil has completed similar agreements with China and will do that with Russia in future.
Why is BRICS important for India?
BRICS is pivotal for India for several reasons. BRICS is a by-product of the evolving multipolar world order. It enhances the status of India and places it as a global power in league with China and Russia. It balances India’s foreign policy and saves her from undue Western pressure.
India’s economic and security interests are tied with the BRICS states. China as the second largest trading partner, and Russia as the most significant arms supplier, are pivotal. In recent months, Russia has also become India’s second most important energy supplier. BRICS is the organisation of the future. As the influence of G-7 declines, BRICS will become more influential.
On several global concerns, such as non-interference in domestic affairs, multilateral reforms, human rights, trade rules and the evolution of the multipolar world order, India’s interests converge with the BRICS states. As a founding member, it has an equal status in the organisation, something which other organisations led by the West has consistently denied.
Can BRICS play a role in resolving the India-China border conflict?
Strictly bilateral and controversial issues are avoided at the Summit. Both India and China pursue a policy of non-interference in their bilateral conflicts. They also have robust mechanisms to manage such conflicts. Therefore, BRICS will not discuss the conflict between India and China.
Nonetheless, BRICS creates a favourable milieu for dialogue and socialisation of leaders. It provides a platform which otherwise may be difficult to create. For instance, there are speculations that Xi Jinping and Modi may meet in Johannesburg. Further, such organisations pressure leaders to restrain rhetoric and share information. The role of friendly countries in ameliorating conflict through back-channel diplomacy must also be considered.