- Hubert Walas
The end of the Western-based order with the dominant role of the United States is imminent and inevitable—proponents of such a thesis got a few extra rounds of ammunition of their argument in August 2023.
Lo and behold, at the annual BRICS summit in Johannesburg - that is, the group of five developing countries consisting of Brazil, Russia, India, China and South Africa - a significant extension of the group was announced. BRICS was going to almost double in size with the addition of Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates. What's more, up to 40 countries were to express interest in joining the group, some by submitting applications!
Although Argentina eventually withdrew from the idea, the event reverberated throughout the Western world. CNN reported that "BRICS expansion is a big win for China" Bloomberg called it, "a Failure of US Leadership" and the Atlantic Council saw it as another step toward building a truly multipolar world.
However, it doesn't take a discerning observer long to find diametrically opposed views of the event. Foreign Policy writes that the BRICS expansion is far from a triumph for China, the Washington Post thinks BRICS is little more than a meaningless acronym, and Al Jazeera even thinks the expansion may be a bad idea.
So how should we view the expansion of BRICS? What motivates its member states, what interests divide them, and what unites them? Is BRICS a harbinger of a new post-Western world order?
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The evolution of the cake division
"We meet at a time when the world has entered a new period of turbulence and transformation. BRICS is an important force in shaping the international landscape. [...] and should practice true multilateralism. We should help reform global governance to make it fairer and more equitable, and bring more security, stability and positive energy to the world." - said Chinese leader Xi Jinping at the 15th BRICS Summit in Johannesburg on August 23.
The Chinese leader uttered these words during what was inevitably a momentous event for the group - the announcement of the expansion of the BRICS group to include six new members. The grouping was set to nearly triple in size from its inception.
After all, the group was formed in 2009, originally as the BRIC, or Brazil, Russia, India, and China. Two years later, South Africa joined the group as a much smaller entity, but still representative of the vast African continent. The group's acronym itself was created in 2001, and coined by Lord Jim O'Neill.
O'Neill recalls: "When I coined the BRIC acronym back in 2001, my primary point was that global governance would need to adjust to incorporate the world’s largest emerging economies.
Not only did Brazil, Russia, India, and China top the list of that cohort; they also were collectively responsible for governing close to half of the world’s population. It stood to reason that they should be represented accordingly. ”
That they were not adequately represented was cemented for the BRICs by the financial crisis of 2007-2009. For here was the Western system, controlled by institutions such as the IMF and the World Bank, suffering a staggering failure comparable to the Great Depression of the late 1930s.
The collapse of the West was therefore the perfect moment to claim their piece of the pie, while highlighting the inadequacies of the current system and the need for reform. Brazil, Russia, India and China, and soon South Africa, despite their differences in interests and geography, agreed on this basic principle.
It was this, the desire to reform the global governance system and give emerging economies a voice, that would become the glue that held this exotic format together. And that agenda hasn't changed, in fact it has become more and more important as the BRICS countries have grown economically.
The share of the group's members in world GDP rose from 8% in 2001 to between 30% and 35% of GDP after the 2024 enlargement, according to various estimates. Meanwhile, the share of the G7 economies fell from 65% to 43% over the same period.
Proponents of the success of the BRICS, using the purchasing power parity indicator, even argue that under this measurement, the BRICS is now a larger economic format than the G7, although using PPP in this case misses the point somewhat.
However, there is no doubt when comparing populations. The BRICS account for almost 50% of the world's population - thanks to China and India, of course - while the G7 account for "only" 10%. Moreover, the BRICS now account for ¼ of all world trade.
New buddies in the neighborhood
The group's economic gravitas - generated primarily by China and to a lesser extent India - and the gradual trend of increasing global dissent against Western hegemony, a legacy of the second half of the 20th century, promoted the BRICS as a leading format for countering the unjust division of power in the world. At least that's how the group's members wanted to be perceived.
And indeed, despite the very modest concurrent fruits of cooperation within BRICS (one can name only the establishment of the New Development Bank in 2015), the group aroused increasing interest in the so-called Global South.
BRICS began to be seen as a global advocate for the affairs of these countries, speaking on their behalf, calling for the reform and reshaping of the world's institutions of international governance.
And that's why, despite few specifics, there was a long queue of applicants to join BRICS. As many as 40 countries were said to be ready to join the bloc, according to South African representatives. Among them were - Algeria, Argentina, Bahrain, Bangladesh, Belarus, Egypt, Indonesia, Iran, Kazakhstan, Mexico, Nicaragua, Nigeria, Saudi Arabia, Senegal, Thailand, the United Arab Emirates, Uruguay, Venezuela and Vietnam - all of them have formally applied. In addition, the following countries have expressed interest in joining: Afghanistan, Pakistan, Sudan, Syria, Tunisia, Turkey and Zimbabwe.
In August 2023, it turned out that only 6 applications were successful: Egypt, Iran, Saudi Arabia, the United Arab Emirates, and Argentina. Buenos Aires, however, withdrew its candidacy after Javier Milei took the helm of the country. No wonder, as Milei has made no secret of his skepticism about the policies of the People's Republic of China and his outspoken support for Ukraine and Israel over Russia and Iran, respectively.
Actually, Argentina, which is of great interest to the Chinese, broke the very clear theme of BRICS expansion. Without it, the vector of expansion became all too clear. Geographically it was the Middle East, economically, it was oil.
Thus, after January 1, 2024, when the new members formally joined BRICS, the group now accounts for 42% of global oil supply - generated mainly by its new members and Russia - and 36% of global demand - via China and India. In nominal terms of oil supply, BRICS is now only slightly behind the OPEC cartel.
So how to understand such a direction of BRICS development? Why, according to the logic of expanding the equality of the Global South, were the more than 200 million people of Nigeria or the nearly 300 million people of Indonesia - who also applied - not accepted and all attention focused on the petromonarchies of the Persian Gulf?
Dedolarization desire
Well, the BRICS countries are eager to capitalize on their image as defenders of the oppressed, but the fact is that each country's own interests come first. This is not exactly an accusation, as the fact is that these countries are the proponents of multilateralism, so it should come as no surprise that they focus on their own interests first.
The problem is that one interest is not equal to another. Size matters. And so, despite the fact that China is only the fourth letter in the BRICS acronym, it alone economically "eats" all the other members put together, already after BRICS expansion! And by a wide margin, 63% to 37%. BRICS is thus an eminently Sinocentric association, and there is no doubt about it—the group's policies also reflect this.
The only country to emerge from China's shadow is India, which is already the world's fifth-largest economy and has perhaps the best economic growth prospects among the world's major countries. It is also already the most populous country on the planet.
So it should come as no surprise that both China and India - two of the world's largest oil importers - wanted the leading producers of black liquid gold in their format, having Russia already. It doesn't matter that the Iranians and Saudis are mortal enemies, as long as they can satisfy Beijing and Delhi's oil needs.
But the BRICS petroexpansion also has a second agenda - the mirage of de-dollarization that has been going on for decades.
The United Nations, the World Bank, the International Monetary Fund and the Asian Development Bank are the main international institutions through which the West coordinates the order it has established. But it is the U.S. dollar that is the lifeblood of the entire body. For decades, leaders identified with the Global South have sought ways to dethrone the U.S. currency from its pedestal as the world's reserve currency. All in vain.
The dollar remains the undisputed leader, accounting for nearly 90% of foreign exchange transactions and 60% of global reserves, while the Chinese yuan accounts for 4% and 3%, respectively. On the other hand, there are some symptoms of a growing struggle - such as the fact that ⅕ of global oil trade in 2023 took place without the dollar.
And this brings us to the second denominator that unites all BRICS members and those who want to join the group - the dethronement of the dollar and the development of a new system of capital exchange, without handing over all instruments of control to the US Fed.
This also justifies such, and not a different composition, of the new BRICS members. China and India need stability and control in the oil supply market, and at the same time want to pay for crude in their own currency, bypassing the dollar. Incidentally, this is already happening - the Chinese have found a way around Western sanctions on Iran and are importing the ayatollahs' oil using a shadow fleet and paying for it in Chinese yuan.
India probably wouldn't mind buying Iranian oil either, but the prospect of U.S. retaliatory sanctions is putting the kibosh on such ideas. But Delhi is also buying oil with its own rupees. In December 2023, it made the first such transaction with a new BRICS member, the United Arab Emirates.
The precedent for this process, however, was set by an existing BRICS partner, Russia. Ever since sanctions were imposed on the Kremlin regime and Russia was cut off from the SWIFT system, Moscow began selling its oil - also mainly through the shadow fleet - to China and India, which became its biggest buyers.
China bought $60 billion worth of oil from Russia two years in a row - in 2022 and 2023, although it would be more correct to say 430 billion yuan worth of oil, since almost all the transactions is in Chinese currency.
We co uld observe a similar phenomenon between Moscow and Delhi. The Russians were also eager to sell the oil to the Indians in order to secure the diversion of oil supplies from Europe to Asia. And in fact, the share of Russian oil in India's imports rose from 2% (before the war) to as much as 35% in 2023. The problem arose, however, when India began paying for supplies in rupees and insisted on continuing to do so. Moscow, on the other hand, would prefer to be paid in Chinese yuan - something Delhi does not want to do.
The reason for Russia's reluctance is clear. Because of its trade imbalance, Moscow ends up with a pile of Indian rupees that it has no way to spend.
This phenomenon illustrates well one of the many limitations of trading in one's own currency without the dollar - the exchange only makes sense when the trade balance of both sides is roughly equal. This is rarely the case - market competitiveness and diversification leave countries with a surplus with one pool of countries and a deficit with another. China is somewhat of an exception, as the world's largest producer of goods and largest consumer of hydrocarbons. But even India will have a problem promoting its own currency, let alone the Russian ruble or the Brazilian real.
The BRICS members came to a similar conclusion, so another idea was born - the BRICS currency. This plan was announced by none other than Vladimir Putin shortly after the invasion of Ukraine. The new currency would be based on a basket of five BRICS currencies and would be the world's new reserve currency.
The plan particularly appealed to Brazilian President Lula.
"Why can’t an institution like the BRICS bank have a currency to finance trade relations between Brazil and China, between Brazil and all the other BRICS countries?” he said. “Who decided that the dollar was the (trade) currency after the end of gold parity?" - Lula asked rhetorically in April 2023.
The problem is that the plan - like so many other things related to the BRICS - was just another blowout and pie in the sky. South Africa's finance minister, Enoch Godongwana, who attended the bloc's expansion summit along with the others, commented on the issue:
"No one has tabled the issue of a BRICS currency, not even in informal meetings [...] Setting up a common currency presupposes setting up a central bank, and that presupposes loosing independence on monetary policies, and I don’t think any country is ready for that." - Godongwana said.
And in this way, by deliberating on the motivations for accepting only the petromonarchies of the Middle East, we come full circle. This is not a movement seeking a more equitable approach to global governance for the Global South - it is primarily about keeping oil producers closer together and looking for ways to settle in their own currency under the popular guise of de-dollarization, but realistically it is simply the pursuit of their own national interests.
Every man for himself
And that - meaning national interests - brings us to perhaps the most serious objection to the BRICS' capabilities and prospects. Specifically, staring divergence of them in many cases. Many ask - how consensual a format can be in defining the global order, in which:
First, two of its largest members are literally beating each other with sticks in the Himalayas and cannot agree on disputed territories? We are, of course, talking about China and India, who regularly clash in the world's highest mountain range, as well as indirectly in Pakistan, Sri Lanka, the Indian Ocean, or within formats such as QUAD, of which India is a member.
Second, the two largest new members are mortal enemies, and the prospect of a regional war between Iran and Saudi Arabia is periodically escalating. The proxy war in Yemen, where the two sides are de facto fighting each other, even extends to the third BRICS member, the UAE, where the Emirates supports the southern secessionists. The UAE also has a dispute with Iran over three islands in the Persian Gulf.
Or third, two new African members, Ethiopia and Egypt, are in open conflict over the waters of the Nile and the Grand Ethiopian Renaissance Dam project, which would block the lion's share of upstream waters and deprive millions of Egyptians of drinking water. We talked more about this in a separate episode. There is no shortage of similar disputes within the BRICS.
The big elephant in the room remains Russia and the protracted operation to conquer Ukraine. For Moscow, BRICS is an opportunity to show that its isolation on the international stage by the West has been a dismal failure. But while the BRICS members are eager to take advantage of the opportunity to buy Russian oil at huge discounts in their own currency, the Russian delegates themselves are being treated somewhat as ones with leprosy.
At the historic summit, which expanded BRICS to include new countries, every BRICS leader was present, while Vladimir Putin attended the event via webcam. This was probably suggested to the Russians, or they themselves preferred not to take the risk. After all, South Africa is a party to the International Criminal Court and has announced that it has no intention of withdrawing from it. While, the court has issued an arrest warrant against Putin in connection with the abduction of children from Ukraine.
Kidnapping children and generally launching an armed attack on a smaller neighbour is a mediocre litmus paper for a group that seeks to emphasise its mission to promote peace, security, and equality in the world at every opportunity.
Therefore, while there are countries in the BRICS group that can be considered close supporters of Russia in its attack on Ukraine, i.e. China or Iran, most of the group sidesteps the issue by avoiding joining sanctions against Russia but at the same time distancing themselves from the Kremlin's policies.
This fact is well illustrated by the distribution of the group's votes at the UN on a resolution condemning Russia's invasion of Ukraine. In last year's vote, most of the group's new members, Saudi Arabia, Egypt, the United Arab Emirates, and one old member, Brazil, voted to condemn the Russian Federation.
India, China, South Africa, Ethiopia and even Iran abstained. Only Russia opposed the UN’s resolution.
While the Russian Federation has been the group's biggest image problem, it now has a partner with whose reputation it can safely identify. The inclusion of the Islamic Republic of Iran is a great success for the country's ruling ayatollahs and shows that the country is emerging from isolation. With the exception of Moscow, the BRICS has so far been formed by countries that, at least verbally, have presented a moderate and stable approach to international relations. Tehran, on the other hand, is considered by many to be the world's largest state sponsor of terrorism and regularly calls for the destruction of the United States and the annihilation of Israel. The presence of Iran and Russia in the joint format shows that the group, rather than seeking stability and real change in the international structure, is in practice radicalizing. From the popular Western term "New Axis of Evil" - already three of its members, i.e. China, Russia and Iran, are members of BRICS, and looking at the policy of expanding the format, it is not excluded that in the next step we will see its last member - North Korea. That's why it's not surprising that the new president of Argentina, Javier Milei, who strongly distanced himself from authoritarian tendencies, decided not to unite his country with a group that accepts such members.
Leaders of the other BRICS countries are forced to put on a good face, because as much as they care about increasing the voice of the global South in the international model, the fact is that they care about not breaking and continuing cooperation with the West. Many BRICS members have good relations with the West, and as pragmatic as it is from their point of view to be open to investment from China or India, relations with America or the European Union remain very important as well.
Brazil is a good example. It has the largest trade exchange with China, but behind the Chinese are a whole host of Western countries, led by the United States. All told, Brasilia's trade with the West exceeds those with China and is comparable to those within the BRICS. Brazilians are also very hopeful about the signing of the Mercosur-EU trade agreement. Moreover, Brazil, as the only BRICS member from the Western Hemisphere, which it shares with the United States, must be very careful about its relationship with Washington. The Monroe Doctrine of 1832, which aimed, among other things, to drive European influence and colonialism out of Latin and South America, is ever-present in the thinking of American strategists. Today, it is less about European influence and more about Chinese influence, for which BRICS is a proxy. This makes the Americans very determined to react, especially in this part of the world.
India, the second largest BRICS country, is also very calculating in its relations with the West and the Global South. There is no doubt that Delhi is on its own path, in which neither the West nor the South is an end in itself, but can only provide the appropriate vehicle. India's demographic and economic potential gives it the space to cooperate with any power center in the world without risking long-term stigmatisation or even alienation in the international arena. This is why Indians have no problem buying Russian T-90 tanks and S-400 systems, French Rafale fighter jets and Scorpene submarines, US Reaper drones and Apache helicopters, or Israeli Barak systems.
Countries such as Saudi Arabia, Egypt, the United Arab Emirates, South Africa, and Ethiopia also have a similar multi-vector approach, although these countries need to be more careful about their steps.
The old melody of seeking causality
So how to understand BRICS?
Despite the fact that the group and its leaders often claim to be the advocates of the majority of the world's population, of a more equal distribution in its governance structures, and of a break with centuries of Western domination, all the actions of the BRICS prove that this is at best a slogan to win over public opinion in the countries of the global South - people who do not have time to break down the specific actions of the BRICS countries to examine the format.
This is well illustrated by the very process of the group's expansion. Let's start with the fact that BRICS advocates a new system of world governance and a series of reforms, while the group itself has no formal structures.
"Apart from the annual summits organised on a rotating basis by one of the members, the BRICS have hardly any permanent instruments for joint governance [...] It has no headquarters, no permanent secretariat and even less of a treaty governing its operation and or the establishment of common guidelines". - write André Gattolin and Emmanuel Véron for Schuman Foundation.
Some might ask - how can BRICS reform the world if it can't even govern itself?
But the truth is that this loose format suits the BRICS countries, which are either:
- Autocracies masquerading as democracies - China, Russia and Egypt;
- An absolute theocracy - Iran,
- an absolute monarchy - Saudi Arabia
- a tribal monarchy - the Emirates,
- Democraciesy, with varying degrees of freedom: South Africa, India and Brazil.
In an environment where there are no rules and formal criteria for the admission of new members, the principle of admission is the power and influence of the founding members. So while Brazil, or South Africa opposed the admission of new members, in the end it didn't matter much because China was in favour.
Remember that in the new format, China accounts for 63% of the group's economic power, while in the old format, its share was even higher, over 70%! Of course, the Russian Federation also supported this position, for which any greater global presence is desirable.
The selection of members itself had little to do with the goal of seeking a more equal world. If it was the case, the group would have included the very important emerging economies of Nigeria, Indonesia, Mexico or the Philippines, which together represent 700 million people. But apparently they were examined to have nothing interesting to offer the Chinese, unlike the oil-rich countries: Saudi Arabia, the United Arab Emirates or Iran.
The BRICS are talking to the world through the prism of fine slogans about promoting peace, egalitarianism and breaking with Western colonialism, among other things, by pursuing the national interests of individual members in accordance with the principles of multilateralism. In the end, however, we get a group in which the stronger you are the stronger your voice is, and the more you can do - rules as old as the world. Rules that the Global South wants to break away from.
The fact is that the BRICS modus operandi is moving dangerously towards subservience and the form of a proxy platform to secure Beijing's national interests and to strike at the current world order. And also to whitewash states that violate international law in such blatantly brutal ways as Russia in Ukraine or Iran's massive support for various militias in the Middle East. Meanwhile, moderate states like Brazil, South Africa, Ethiopia and India have to put up with it because without China, and its quasi-vassal Russia, the group would have far less economic and military weight.
If BRICS realistically wanted to change the world and help smaller actors from the global south come to power, it would set clear rules for admitting members, equalize voting power and create a system that does not discriminate on the basis of smaller GDP. This won't happen, however, because it would limit Chinese agility.
In effect, BRICS is a micro-universe of the world and the model of its governance advocated mainly by Beijing and Moscow - and therefore a world without clear principles, where states are ruled arbitrarily by autocrats. BRICS will not change the world - it will continue to be a format centred on slogans without much substance or concrete, in which it is each member that will try to push its national interest, and turning a blind eye to its enemy sitting right next to it.
However, the group is very important from one angle. For it is a wake-up call for the West to actually and seriously address the need to reform the global governance system to reflect the world of 2030, not 1945. The interest and willingness of the 40 countries to join BRICS should not be read as an endorsement of the way the group operates, but as a cry and request for the voice of millions of people in South America, Africa, or Asia to be heard - and not necessarily the Chinese, as their voice has been well represented by Beijing for the past two decades.
In this context, the weakness of BRICS can be exploited. Creating an antithesis to this conflicted, unproductive and ruleless BRICS could potentially provide a new opening for "West and South". A format that brings together Western developed countries: United States, European Union, Japan, Korea or Australia, and selected emerging economies such as Brazil, India, Indonesia, Turkey, Mexico, Nigeria, Argentina, Ethiopia, Vietnam or the Philippines would be a very big leap to step out of West's own mental bubble and try to find a new, equitable formula for global governance. The idea, if well implemented, could be a successful competitor to the BRICS, in which China has no counterweight. In the “West South” format, the dominance of the Americans would be balanced by the economic strength of the Union, whose interests are not always the same as those of the Americans, but both sides are interested in promoting a rules-based world order.
Yet for the time being, the best format, of those that exist, for exploring new ideas seems to be the G20. It includes all the major members of both the BRICS and the G7. The G20 represents 85% of the world's GDP and more than 60% of the world's population.
An expanded BRICS is, therefore, stronger propagandistically, symbolically and in dry statistical indicators. But is it stronger geopolitically? Not at all. The group has become even more conflicted and heterogeneous, and its image will now be tarnished by Iran in addition to Russia. BRICS will not reform the world, with one exception - it will serve as a wake-up call for Western elites stuck in the previous era and the need to find a new formula for co-management of the world. Otherwise, the countries of the Global South, within the BRICS and beyond, will be forced to participate in the game of "the strong can do more”, in which the People's Republic of China will always play first fiddle.
