Bangladesh is going to become a member of BRICS. The foreign minister said that Bangladesh will become a member of BRICS next August. The BRICS, that is, Brazil, Russia, India, China and South Africa, have attempted to transform from a promising resource class into a real-world unifying diplomatic and financial catalyst. Is that change finally going to happen?
The BRICS story began in November 2001 with a paper by Jim O’Neill, then head of global economic research at Goldman Sachs Asset Management. It was called ‘The World Needs a Better Economic Brick’ (though there was no South Africa at the time). This was at a time when the world was dealing with the economic crisis that followed the 9/11 attacks. O’Neill highlighted the huge potential of BRICS, noting that GDP growth will not be as fast as it has been in the next few decades.
At the time, however, China and India were experiencing rapid economic growth, and Russia was recovering from the post-Soviet crisis of the 1990s through rising commodity prices. The growth of the BRICS was so significantly ahead of that of the advanced economies of the time that O’Neill predicted in 2003 that their GDP could surpass that of the G6 by 2040.
The growing influence of the BRICS has an important lesson for the West. If the current world order is to remain relevant, Western organizations must change a number of aspects. BRICS (Brazil, Russia, India, China and South Africa) has attempted to transform from a promising resource group into a real-world unified diplomatic and financial catalyst. What is finally going to change that? BRICS holds considerable importance in the current global context. And Bangladesh’s membership is a timely decision
While the world hoped that BRICS would prosper economically, it was less likely to form a cohesive alliance. Because each member country of the alliance represents an unstable mixed regime of dictatorship and democracy and each of them has its own economic structure. Again, China and India have a long-standing border dispute between them, which has no sign of resolution. But the BRICS saw their economic alliance as an opportunity to expand their influence globally by creating an alternative to Western-led international institutions. And they seem to be improving quite a bit in the bear future. The alliance was further strengthened by the accession of South Africa, Africa’s largest economy, in 2010. By 2014, this economic alliance established the ‘New Development Bank’ as an alternative to the World Bank. The following year, BRICS created the Contingent Reserve System, so that members of the alliance do not have to face short-term balance of payment pressures.
Economically, BRICS has continued to improve, at least overall. However, among the BRICS members, China is the only country that has maintained sustained economic growth. It also outperforms the G7 in terms of contribution to global GDP (based on purchasing power parity). On top of that, bilateral trade between alliance members is growing rapidly. However, the coalition’s larger ambitions are not showing much progress. However, the recent situation suggests that BRICS has turned around again. Lately members have been talking about trading in ‘dollar-alternative’ currencies. Some are also raising the possibility of a new interchangeable BRICS currency. However, this demand for de-dollarization is not new.
Some experts believe that the BRICS currency system could replace the dollar. If not, it could at least shake the dollar’s single reign. Above all, BRICS appears to be becoming an effective platform for cooperation on issues including climate change, global governance and development. In fact, 30 countries, including Argentina, Turkey and Saudi Arabia, have expressed interest in joining BRICS – which will be discussed at the bloc’s summit in South Africa next August. Although the alliance’s institutional framework remains underdeveloped, the goals that served to form the alliance have not yet been exhausted and are not likely to be, any time soon.
In fact, applicants for accession to the BRICS are united and driven by one thing, which is their plight. Developing countries resent the harsh conditions imposed by Western-dominated institutions. They are also annoyed by the ambivalence they show on important issues such as environmentally friendly development. They are also unwilling to accept attempts to ‘control’ their economy in various ways. Most importantly, they are likely to be suspicious of the values and self-interested behavior of Western countries.
The West has also been reluctant to reform the international regime it wants to ease, so that emerging economies like China and India can expand their global influence. After all, since the G20 was formed in 1999, such calls for reform have grown stronger over the past few decades. After the Asian financial crisis in 1997-1998, the region’s finance ministers and central bank governors began regular high-level meetings, which were regularly sought after by representatives from outside the Western bloc.
As Western promises of reform failed, possible alternative arrangements, and monetary systems, became increasingly attractive. As the BRICS attempts to build a new world order, China’s multi-pronged plans are fueling growing intentions in the alliance among countries dissatisfied with Western hegemony. If countries like Argentina or Saudi Arabia also join this project, there is nothing surprising. A worldview and institutional arrangements such as China’s BRICS-plus can go a long way as a result. China is moving towards its ambitious goals, such as the Belt and Road Initiative, or BRI.
It is true, the ambition of BRICS is far from reality. No member of the Alliance shall compromise its national interests in priority. And this is what has held the BRICS back for so long. Even China’s Belt and Road Initiative (BRI) has been compared to a new form of ‘imperialism’, which is not the best way to build long-term friendships. But the resurgence of BRICS is raising concerns, not least because the alliance has never equated to real world leadership. The coalition also does not support the principle of global governance.
But the growing influence of the BRICS has an important lesson for the West. If the current world order is to remain relevant, Western organizations must change a number of aspects. BRICS (Brazil, Russia, India, China and South Africa) has attempted to transform from a promising resource group into a real-world unified diplomatic and financial catalyst. What is finally going to change that? BRICS holds considerable importance in the current global context. And Bangladesh’s membership is a timely decision.