Why the West's Dismissal of BRICS will Prove Unwise
Brazil, Russia, India, China, and South Africa, major emerging economies known as “BRICS” gathered in Johannesburg, South Africa on August 22 and 23, 2023 for the 15th BRICS Summit. By way of background:
Russia initiated an informal club of nations in 2009 that would provide a platform for its members to challenge a world order that is dominated by the United States and its Western allies. The original members of this club were Brazil, Russia, India, and China, the same countries referenced by then Goldman Sachs chief economist Jim O'Neill in a 2001 research paper in which he made the case for changing the framework for global economic governance. It was in this paper “The World Needs Better Economic BRICs” that Lord Jim O'Neill coined the term “BRICs”.
South Africa joined the BRICs bloc in 2010, following which the bloc was renamed BRICS, an acronym representing each of the member countries.
BRICS countries are not united by their governance systems (Brazil, India, and South Africa are democracies, while China and Russia are autocracies) or their attitude to the West (Brazil, India, and South Africa posture non-alignment, while China and Russia are anti-West) or their outlook on human rights (China and Russia have very poor human rights records). They are united by a desire to shift power away from the dollar and Western dominance in global financial institutions.
In 2015, BRICS members established the New Development Bank (NDB) to “play a catalytic role in providing financial support to emerging markets and developing countries for infrastructure and sustainable development”. The NDB currently has 8 shareholders; its founding five members each hold 18.98% and Bangladesh, Egypt, and the United Arab Emirates hold 1.79%, 2.27%, and 1.06% respectively. The NDB plans to issue debt instruments in currencies such as the U.S. Dollar, British Pound Sterling, European Euro, and Japanese yen, as well as the local currencies of its member countries.
In the lead-up to the summit, South Africa’s Minister of International Relations and Cooperation of South Africa, Naledi Pandor, confirmed that invitations to attend the summit were extended to 67 leaders from across Africa, Latin America, Asia, and the Caribbean. Glaringly, no Western nation was invited or attended.
The BRICS Summit did not garner much attention from the mainstream media in the West. This article highlights five reasons why this was a missed opportunity and why individuals, businesses, and nations who do not want to be caught by surprise by the very real economic (and political) shift of global power dynamics from traditional Western and European dominance cannot and must not ignore BRICS, its initiatives, and its growing influence.
Economic Power and Potential
The BRICS bloc collectively accounts for more than 40% of the world population and a quarter of the global economy. Martin Wolfe noted in a Financial Times article dated May 23, 2023, that while the G7 bloc of nations remains the world’s most cohesive and powerful economic bloc in the world, its global share in output (purchasing power) from 44% - 30% in the last two decades.
According to Gross Domestic Product (GDP) data for 2022, BRICS nations are collectively, in purchasing power parity terms, economically bigger than the G7 nations (France, the United States, the United Kingdom, Germany, Japan, Italy, and Canada.). China and India have the world’s second and fifth-largest economies, respectively. The US has the largest with Japan and Germany in positions 3 and 4. It is expected that by the end of this decade, China will economically be almost the size of the US and India greater than Germany.
Saudi Arabia, Iran, and the United Arab Emirates as BRICS members spectacularly reinforce the BRICS member influence on the global economic stage. This economic prowess challenges the West's historical economic dominance and provides an alternative avenue for economic cooperation, respect, and development.
Present and Future BRICS Growth
As of August 7, 2023, 23 countries had formally expressed interest in joining BRICS. At the summit, it was announced that six countries had been invited to join BRICS with effect from January 2024: the Argentine Republic, the Arab Republic of Egypt, the Federal Democratic Republic of Ethiopia, the Islamic Republic of Iran, the Kingdom of Saudi Arabia, and the United Arab Emirates. BRICS membership by Egypt and Ethiopia diminishes Western influence in a region increasingly turning to China for economic relief and Russia for arms deals. It is also worth noting that the growth of BRICS represents the growth of countries with the intention of positioning themselves so that they are not beholden to the whims and demands of the West.
Whilst the G7 is reaching out to various countries, over 30 countries have formally applied for BRICS membership. Despite their growing economic (and political) power, the International Monetary Fund has not increased the voting power of China, India, and other emerging markets and developing countries to more equitably represent the contribution of these nations to the world’s economy. It is important to note that the G7 share political goals that do not hold the same priority as those held by many other countries. As illustrated by the attitude of BRICS countries to the Russia-Ukraine war, these countries deem food and energy insecurity, and the impact of America’s trade war with China and the Russia-Ukraine war on local businesses and communities, more pressing and thus more important to focus on and address.
The United States Congress has played a key role in the lack of these reforms. Whilst the US and other Western nations look out for their own interests, they continue to drive nations away from the West, to the East and South. Echoing the sentiments of Wolfe who stated, “Yes, the G7 [should be expected to] defend its values and interests. But, it cannot [continue to think that it can] run the world.”
Population and Resources
Following the addition of the new countries, BRICS member countries will represent approximately 46% of the world’s population. They will also strengthen their representation of a significant portion of the globe’s natural resources. The combined demographics of these nations present new potential to influence global trends in various fields, including consumption, labor markets, and cultural exchange. Moreover, their abundance of natural resources grants them considerable leverage in global resource allocation, affecting sectors such as energy, agriculture, and minerals.
Increasing Spotlight on Africa
In 2013, South Africa initiated the BRICS-Africa Outreach to facilitate dialogue with leaders of BRICS and non-BRICS countries on the African continent. The theme for the 2023 Summit was “BRICS and Africa: Partnership for Mutually Accelerated Growth, Sustainable Development, and Inclusive Multilateralism”. Old and new BRICS partners are significant investors in Africa. These investment levels continue to grow, demonstrating a recognition and appreciation that Africa has much to offer the world. This recognition and appreciation are in stark contrast to the cultural and ideological imperilisation of African countries by the West (explained in this article by Institute for Black Solidarity with Israel CEO Dumisani Washington).
Communication around the 2023 BRICS Summit by South Africa highlighted BRICS sentiment for sovereign equality, mutual respect and understanding, and mutually beneficial cooperation. BRICS was a group of nations where these values were upheld. As expressed by Minister Pandor, “[these values are] particularly valued by African States who demand respect and reciprocal trade and investment, and for the goods, products and services from Africa to compete on equal footing in the global economy.”
There is also increased determination and focus on operationalizing the African Continental Free Trade Area for the benefit of African (and BRICS) countries and this determination and focus has the backing and support of BRICS nations. The African Development Bank, African Union, and United Nations Economic Commission for Africa all are key players who are already supporting the effective entry into force of the African Continental Free Trade Area. Africa’s time is indeed coming and the rest of the world should take note.
Africa-Israel
The Summit’s focus on Africa continues the trend followed by Israel that recognizes the immense existence of wealth (in the form of mineral resources and human capital) on the African continent and the benefit this has for nations and/or organizations that choose to partner with Africa as she strengthens her capabilities and infrastructure. While in South Africa, Indian Prime Minister Narendra Modi, urged leaders in attendance to cooperate in domains including counter-terrorism, cybersecurity, and food and health security.
The State of Israel possesses innovation, expertise, and experience in these areas. It would behoove the Jewish State to seek active participation in BRICS, especially as enemies of the State (such as Iran and the “State of Palestine”) seek to strengthen ties with BRICS and African nations. Additionally, the diversification of global alliances through BRICS is likely to create new diplomatic and trade opportunities that Israel can exploit, especially with nations seeking alternatives to Western partnerships. This theme will be explored further by IBSI.
Conclusion
The 2023 BRICS Summit underscores the erosion of Western hegemony in global affairs. The economic power, significant population and resources, and potential for enhanced international collaboration present BRICS as a formidable force shaping the future of global politics, economics, and diplomacy. We are living in a time where strategic relations around the world are being redefined as the current global order is being challenged. Accompanying this challenge are very real concerns around human rights, the economic colonization of Africa, and increased terrorism in Africa to name a few. May we, like the Biblical sons of Issachar who understood the times they were living in and knew what the nation of Israel ought to do, seek an understanding of these times, and create strategies for our communities and nations that will foster peace, security, and prosperity.