The worldwide reactions stirred by the BRICS Summit meeting in Johannesburg on 22-24 August are a measure of the significance of this event, not just because of its resolutions, a major one of which was to admit new members, but also more importantly because of how it expressed the growing dissatisfaction with the post-World War II international order.
In our rapidly changing world, the governance of global financial and other institutions no longer reflects shifting economic balances and the rising influence of the countries of the Global South, many of which had not attained independence or were even acknowledged to exist at the time the current world order was formulated.
The minor amendments that have been introduced to the ways the current international organisations are organised and function since their inception have lagged far behind the shifting relationships between the incumbent and emergent powers.
Based on various indicators including rapid growth, the world’s major investment banks have forecast a bright future for the emergent powers. Acronyms have been formed out of their initials to encapsulate the groups of countries that seem to share this prosperous future.
One of the most famous was the brainchild of UK economist Jim O’Neill, head of research at the US investment bank Goldman Sachs in 2001, who believed that Brazil, Russia, India, and China – henceforward known as the “BRIC” countries – met expectations of growth conducive to investment. Before long, these four countries were joined by South Africa, becoming BRICS.
In 2005, the same bank came up with another group of countries consisting of the next 11 nations that would follow BRICS in terms of rates of economic growth that would attract investors. It called this group the “Next Eleven” or “N-11” and it consisted of Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, the Philippines, South Africa, Turkey, and Vietnam.
In 2009, some months after the global financial crisis hit, the Economist Intelligence Unit identified six countries – Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa – that showed prospects of high growth in dynamic and diversified economies, relatively developed financial sectors, and demographic advantages. They came together under the acronym CIVETS, the magazine said.
Then, in 2013, O’Neill promoted the term “MINT” as well, which had originally been coined by the US Fidelity Investment Fund in 2011. The initials stood for Mexico, Indonesia, Nigeria, and Turkey.
Like the members of the other groups, these countries were politically and economically diverse in many ways, but they shared certain common features, such as a large economy, a strategic geographical location, a young population, opportunities for growth with high local consumption, and increasing prospects for investment to meet domestic demand and to boost exports.
It is commonly acknowledged that the countries in these groups are now playing a growing role in the global economy and in international affairs in general and that space should be made for them in global governance and for their fair and effective representation in global institutions and organisations.
In the years since these countries were grouped together according to their investment prospects, some of them have proven such forecasts true, while others have not lived up to the early hopes. However, the main reason for conceiving of such groups under these acronyms to begin with was to create categories of countries to focus investments.
It was a kind of marketing approach that it was believed would steer investment in their direction more effectively than lumping them all together under the loose term of “emerging markets,” an expression coined by economist Antoine van Agtmael in 1981 when he was working with the World Bank Group.
The term denotes countries that are in the process of transitioning between their status as a developing economy to that of an advanced economy. Commentator on international politics Ian Bremer has defined an emerging market economy as one in which “political considerations are no less important to global markets than economic components.”
While some of the above-mentioned groups have fallen by the wayside, BRICS has survived and developed over the past two decades. The growth of China and India, in particular, has been crucial to this growth, as has the group’s cohesion, served by its summit diplomacy and the blend of pragmatism and ambition that goes into preparing for its summits.
Despite the relative decline in the contribution of South Africa, Brazil, and Russia to the global economy in terms of GDP based on purchasing power parity (PPP), the five BRICS countries combined now outperform the G-7 group of countries on the same criterion. This is all the more remarkable considering that their share of global GDP (PPP) was barely 40 per cent of that of the industrialised nations in 1995.
The BRICS countries have now invited six other countries to join them, of which three are from the Arab region: the UAE, Saudi Arabia, and Egypt. These countries will add to the economic momentum and geographical diversity of the group.
This brings us to three questions. I will conclude by offering brief answers to them with a promise to elucidate further in my next article.
The first question is whether the Johannesburg Summit of the BRICS countries in 2023 was a new edition of the Bandung Conference in 1955 that led to the creation of the Non-Aligned Movement. The answer to this is no, as we now live in an era in which countries align according to their national interests.
The second question is whether the US dollar will now be pushed aside from its position in international exchanges. My answer to this borrows from a verse by the Egyptian poet Ahmed Shawki who wrote that “demands are not attained by wishing.”
The dollar’s exorbitant privilege as an international reserve currency has come under criticism since the 1960s. Although it has ceded to some extent to other currencies, criticisms of the dollar have intensified recently in response to attempts to weaponise it. However, any forecast about the future of international currencies and reserve currencies, in particular, is a very complicated matter, as it involves the interplay between economic forces, politics, law, technology, and culture in the new digital age.
The third question is whether we are seeing the beginnings of a new global order. The answer to this is that we are seeing signs of the beginning of the end of the post-World War II arrangements. Attempts to patch these up will not work. The world has changed too much, and the holes are now too big to mend.
This article appeared in Arabic in Wednesday’s edition of Asharq Al-Awsat.
* A version of this article appears in print in the 7 September, 2023 edition of Al-Ahram Weekly