BRICS Is Evolving from China-Russia Dream to Potential U.S. Nightmare / Tom O'Connor

Global interest among nations seeking to join the BRICS economic bloc led by Brazil, Russia, India, China and South Africa is demonstrating its growing influence as a new geopolitical force with the potential to challenge the largely Western-led financial system.

As the group prepares to hold a fateful conference this summer, transformations long in store for the international order are beginning to take effect.

"The main drivers are to do with an overall belief that the United States has become both unreliable and overbearing in its foreign policy," said Chris Devonshire-Ellis, chairman of the Dezan Shira & Associates business firm dedicated to doing business across Asia.

"Unreliability such as issues concerning the recent U.S. debt ceiling—which has only been pushed back to 2025—and the risks of sanctions," Devonshire-Ellis told Newsweek. "Overbearing in that it has used international mechanisms to punish countries it doesn't agree with (cutting countries off SWIFT) and has appeared to use the G7 as an economic 'gang' to support and justify what it does elsewhere."
The debt ceiling crisis forced President Joe Biden to cut his Asia trip short after his appearance at the G7 meeting late last month in Hiroshima alongside the leaders of Canada, the European Union, France, Germany, Italy, Japan and the United Kingdom.

And while the influential group sought to showcase a united front, another meeting held by leading diplomats of the five core BRICS members last weekend in South Africa also generated global interest.

"Other countries are starting to become concerned at this type of behavior: unsustainable debt levels and the imposition of a 'rules based order' and global economics that only appear to service the U.S. and its immediate allies—at the expense of everybody else," Devonshire-Ellis said.

"Simply put," he added, "numerous global leaders from Africa, Latin America, Central Asia and the Middle East, as well as China and Russia, have stopped believing in the United States as a responsible global leader."

BRICS, which began as "BRIC" before South Africa's inclusion as a term for emerging economies coined by then-Goldman Sach's economist Jim O'Neill in 2001, held its debut summit in 2009. But it has generated a sharp uptick in interest over the past year since China hosted a "BRICS+" meeting that drew 19 heads of state last June.

In the leadup to the recent BRICS ministerial in Cape Town, South Africa's Ambassador-at-Large to BRICS Anil Sooklal told Newsweek that more than 20 countries have applied to join or expressed interest in becoming members of BRICS as it plans to debate expansion at the upcoming August leaders' summit set to be held in Durban.

Sooklal emphasized at the time that BRICS did not seek confrontation against any other blocs, including the G7, but rather sought cooperation in creating a more equitable and inclusive international architecture.

Irina Yarygina, head of the Economics and Banking Business Department at the Moscow Institute of Foreign Relations (MGIMO), echoed a number of these points.

"Actually, globalization has reached a new stage of its development associated with the formation of difference alliances," Yarygina told Newsweek, "whose members share the main principles of interaction (mutual respect and equality) within the framework of reaching definite economic and social problems in the interest of their nations."

"One of such a kind of intergovernmental alliance is BRICS," she added, "whose member countries do not seek to dominate, but are interested in constructive relations, ensuring secure well-being."

Yarygina noted that the BRICS agenda encompasses an ambitious range of issues on which multilateral cooperation is sought, including security issues, post-pandemic recovery, technology sharing, sustainable development and people-to-people exchanges.

"It is important for everyone to recognize the multipolarity of the world as a new process of globalization," she said, "and strive for compromises within the framework of creation of a better future for mankind."

At the heart of BRICS, however, is an effort to diversify market access away from the domination of the U.S. dollar, by far the world's largest reserve currency, as well as U.S.-led financial networks subject to tools such as sanctions.

"Investment cooperation, along with other areas, is designed to strengthen balanced and inclusive economic growth and increase the level of the international competitiveness of BRICS economies," Yarygina said. "We consider these principles to be attractive to developing countries, and highly appreciate their intention to join BRICS economic and financial platform."

Leading this effort is BRICS' Shanghai-based New Development Bank (NDB), which has already expanded to include Bangladesh, Egypt and the United Arab Emirates as partners.

Cobus van Staden, a senior researcher at the South African Institute of International Affairs, told Newsweek that "the interest among developing countries to join the NBD is driven by dual dynamics."

"First, there is a lack of development financing options open to the Global South, particularly for concessional financing aimed at infrastructure development," van Staden said. "This reality has significantly contributed to the current debt crisis in the Global South, because lack of concessional options forces countries towards market-rated lending. So, the NDB opens another set of options for these countries, in addition to traditional development finance sources like the World Bank."

"Second, a smaller subset of developing countries has complicated relationships with Western powers, especially in relation to sanctions," he added. "For countries like Iran and Saudi Arabia, the NDB represents a potential source of financing and influence outside of forums dominated by Western norms and different forms of conditionality linked to financing from institutions like the World Bank."

The interest expressed by both Riyadh and Tehran in joining BRICS and its NDB has taken on a new light in the wake of Beijing's successful effort to broker a deal in March for the two longtime rivals to reestablish relations.

While van Staden stated that China and Russia have their "own preoccupations around the use of dollar-targeted sanctions" that "are contributing to the sudden momentum in exploring alternative currency trade," he also said he was "struck by the relatively quick engagement from the rest of the developing world."

"I think this is partly informed by alternative views of the global order coming from the Global North and the Global South," van Staden said.

He pointed to a survey published by the European Council on Foreign Relations in February, one year after Russia's invasion of Ukraine, which found vast differences in the opinions expressed by respondents in the West from those in China, India, Russia and Türkiye.

Respondents across nine European Union countries, the U.S. and the U.K. were more likely to say that the conflict would produce a world divided between two blocs led by China and the U.S., while those in the four non-Western nations were more likely to choose a more even distribution of global power among multiple countries.

The trend has been particularly evident during South Africa's BRICS chair tenure, as many nations across the continent see both China and the U.S. as roughly equally popular, even while Washington warns nations against doing business with Beijing. Van Staden also noted that U.S. trade with Africa throughout all of 2022 was less than China's trade with the continent in just the first quarter of this year.

"This raises new challenges for U.S. foreign policy," van Staden said, "because it will increasingly have to make allowance for these countries' desire to keep dealing with a wider range of global powers, while also keeping traditional partners like the U.S. on board."

"Putting too much us-or-them pressure on these countries risks them leaning more conclusively towards China," he added, "among other reasons because China is many of their main trading and financing partners."

As BRICS sets its sights on expansion, however, there are also significant disputes among core members. Perhaps the most serious of all is the difficult relationship between China and India. The two countries have been long locked in a border dispute that sparked a war six decades ago and turned deadly once again in 2020, with bilateral cooperation deteriorating between adjoining states that are home to the world's two largest populations.

"China and India don't have any modus vivendi to deal with the disputes at hand," Vijay Prashad, executive director of the Tricontinental: Institute for Social Research, told Newsweek. "They're not just border disputes, they're pretty fundamental, even about questions of trade and in international relations."

That being said, Prashad he said that even "India and China have been able to collaborate in BRICS and work through BRICS institutions," such as the NDB, whose first director general, K.V. Kamath, was from India.

China and India are also members of another common bloc, the Shanghai Cooperation Organization (SCO), as is India's other top rival, Pakistan. This group, which also includes Russia, along with four Central Asian states, is also set to expand across geopolitical fault lines, with Iran on its way to full membership and Saudi Arabia being one of many countries to have applied for dialogue partner status.

Prashad has seen this attitude gain greater traction across the Global South, giving rise to what he called a form of "new non-alignment" among countries such as Indonesia, Mexico and Türkiye, "and therefore it's generated interest in BRICS," he said.

In past decades, Prashad said "when the United States or Western European countries talked about globalization, they talked about universal interests, countries in the south felt, 'Well, maybe there's something to that, maybe there are global interests.'"

But he noted that since the financial crisis of 2007, "there's a growth of a mood which suggests, 'Hey, listen, what you sold us as the global interest is actually your parochial interest, and we want to put forward our own national interest.'"

This trend has only been accelerated by growing Chinese economic initiatives that have also fortified Beijing's influence across the globe.

"Many countries are making a calculation, and they'll say, 'Chinese capital, whether it's private or public capital, it's not a utopia, it's not a salvation, but it's certainly not coming with the kind of conditionalities that are imposed by the International Monetary Fund,'" Prashad said.

So far, the U.S. has yet to directly challenge BRICS, though a growing chorus in Washington has expressed alarm over the calls abroad for de-dollarization that could further limit the effectiveness of U.S. sanctions. In the face of this, Prashad said he hoped "that sober minds in Washington will prevail" as the multipolar model advances.

"There may be a shift going on," Prashad said, "and the United States might have to come to terms with that, rather than contest the BRICS project, this new nonalignment project."

Origin: https://www.newsweek.com/how-brics-evolving-china-russia-dream-us-defying-reality-1804844