BRICS expansion — a concern for the West?

Manal Lotfy in London , Tuesday 29 Aug 2023

The US could try to fight back against the expansion of the BRICS group of countries by strengthening the G7 and G20, writes Manal Lotfy

 BRICS expansion   a concern for the West

 

If the West is concerned about the geopolitical and economic consequences of the BRICS group expanding its membership from five to 11 countries and accounting for 47 per cent of the world’s population and 37 per cent of its GDP, it has done well not to reveal that concern thus far.

The official reaction from western capitals has been measured as new members invited at the end of the BRICS Summit in South Africa last week included Egypt, Saudi Arabia, Iran, Argentina, the UAE, and Ethiopia, all of which have cooperative relations with Washington except for Iran.

This means that the US and the European capitals cannot simply classify the BRICS group as an anti-western alliance.

Since its establishment in 2009 by China, Russia, India, and Brazil, and with the accession of South Africa in 2010, the western powers have argued that the bloc has not led to real changes in the structure of the global financial, economic, and political system.

However, the Johannesburg Summit might be a turning point for two reasons. First, there was the announcement at the end of the summit by head of the Shanghai-based New Development Bank Dilma Rousseff that this so-called BRICS bank would be increasing lending to its members.

However, unlike the International Monetary Fund (IMF) and the World Bank, it would be lending in local currencies and would not attach the sort of conditions that come with loans from the IMF and that can have negative effects on economic growth, such as reduced public spending, austerity, and floating local currencies.

Rousseff also announced that the BRICS bank was considering the admission of 15 new members.

Second, the expansion of the BRICS to 11 countries from January 2024 means that the bloc will now possess the lion’s share of the world’s oil and gas reserves, as well as a huge endowment of other natural resources. If another round of membership expansion takes place in 2024 to include Venezuela, Nigeria, Indonesia, Malaysia, and other countries, that could mean the BRICS accounted for 45 per cent of global GDP.

However, instead of declaring the BRICS expansion to be a threat to the West’s global dominance, Washington and its allies chose to downplay its significance.

US National Security Advisor Jake Sullivan emphasised that the BRICS bloc was not a rival to the US because its interests are too different. He highlighted the fact that due to the BRICS countries’ divergence of views on critical issues, it could not evolve into “some kind of geopolitical rival to the United States or anyone else”.

But in a carefully worded statement, a State Department spokesman argued that to maintain global peace and security, the US “will continue to work with our partners and allies in bilateral, regional and multilateral fora ... The US reiterates its belief that countries may choose the partners and groupings with whom they will associate.”

German Foreign Minister Annalena Baerbock said that it was legitimate and logical for every country to choose the alliance it wants to join in a globalised world.

“In times like these, every country in the world is aware of the importance of cooperation and partnership. Every country must keep asking itself which partnership best suits its values and interests and which are of most benefit to it in the long run,” she said.

The German position seems consistent with its own vision of foreign affairs, since Berlin along with other European capitals does not want to be forced to choose between the US and China as a result of the intensification of the economic competition between them.

BRICS founding countries China and India are also two of Berlin’s largest trading partners.

Arguing that the BRICS expansion is not a problem for Germany and that strong trade relations with the new BRICS members will continue, Baerbock said that the European countries also had the freedom to choose their partners for themselves.

However, one member of Baerbock’s own German Green Party was less diplomatic about the implications of the BRICS expansion.

“The BRICS Summit has established historic facts. This will significantly increase the international importance of the BRICS, even if there are appreciable differences between its members,” said Reinhard Bütikofer, foreign policy coordinator of the Green Party in the European Parliament.

“The character of the BRICS will change with this round of enlargement. China’s dominance will increase. The BRICS was already non-western, now the emphasis is shifting towards confrontational,” he said.

“We don’t have many years to prove that Europe wants to be a credible, reliable, and fair partner for poor and developing countries. If we don’t succeed, then many of these countries may turn to the BRICS instead.”

Britain did not officially comment on the expansion of the BRICS, but British government sources expressed concerns that the expansion of the group could turn the BRICS bloc into a tool to achieve Beijing’s vision of restructuring the global economic and financial system.

This was reflected in some British newspapers regarding the expansion of the BRICS.

The right-wing paper the Daily Telegraph said that the “BRICS expansion has been facilitated by the Biden administration’s blunders… Nevertheless, the western-led order is certainly not yet at its end.”

The British Financial Times argued in an editorial that the different trading patterns, policy styles, divergent economic interests, diverse political systems, and differences in vision within the BRICS bloc, especially between China and India, meant that the BRICS would struggle to challenge the West’s influence over the global economy.

“An expanded BRICS will struggle to challenge, transform, or come up with a rival to the West’s architecture of global economic governance,” the editorial argued.  

In contrast, the Guardian, a left-leaning daily, argued in its editorial that the current demand for membership of the BRICS was a symptom of global disorder. “As the world grows more fractured, developing countries are stressing self-reliance and looking for new coalitions to keep their options open. What unites the BRICS’s 11 nations is their view of geopolitics,” the paper said.

In the face of the BRICS expansion, Washington is expected to try to strengthen the G7 and the G20 groups of countries. The upcoming G20 Summit in New Delhi in September could represent an opportunity, and the White House said that the western nations were looking for “strong outcomes” at the New Delhi meeting that would demonstrate the G20’s role as “the premier forum for economic cooperation.”

One of the ideas that the US administration is considering is expanding the G7 to become the G8 in order to woo India from the BRICS bloc.

The logic behind the idea is that the border dispute between China and India as well as economic competition could push New Delhi to rethink its membership of a bloc in which China is the most important force.

However, membership of the BRICS bloc with its new members means that the volume of trade between India and the other BRICS countries is twice that with the US and Europe.

With the expansion of the BRICS, the diminishing importance of the G7, and the increasing contradictions and disparities in the G20, the BRICS bloc could become an even greater attraction for more countries in the Global South.

* A version of this article appears in print in the 31 August, 2023 edition of Al-Ahram Weekly

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