T-Magazine

BRICS: from the peripheries to the powerhouse

With a larger slice of global wealth, BRICS breaches gates of the US-led world order

By Hamza Rao |
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PUBLISHED November 17, 2024
KARACHI:

When the winds of change blow, goes the old Chinese proverb, some build walls, others build windmills. As the delayed defiance of the peripheries begins to breach the gates of the “rules-based” world order, the West appears to be caught in a waking nightmare, sleepwalking into a full-blown clash with BRICS.

If the international economic order was crafted in an era when most developing nations hadn’t even come into their own and only awakened to find themselves shackled to an unequal architecture, then as history circles back to the West with a vengeance, it seems many powers have been caught napping at the wheel.

As the old Western guard appears to fade and the birth pains of a new world grow louder with ever-increasing force in the form of BRICS, the status quo seems to be clinging to the belief that the monolithic history sealed at the end of the Cold War still holds sway and no new future can appear under the proverbial sun.

The hand-wringing was palpable last month when the group of countries, including sanctions-battered nations, met in Russia for its annual summit. The meeting was the largest held by BRICS since its creation in 2009.

Initially composed of Brazil, Russia, India, China, and later South Africa, the bloc welcomed four new members this year: Egypt, Ethiopia, Iran, and the United Arab Emirates.

After the alliance of emerging economies widened its circle last year, the nine-member BRICS now holds a larger slice of global wealth than the G7, the economic stronghold led by the United States and its junior partners. As major agricultural players, BRICS nations produce a third of the world’s food.

Population-wise, BRICS dwarfs the G7, representing nearly five times the number of people, and with 40 nations knocking on its door, the bloc has become a beacon for those seeking a shift in the world order.

China, the heavyweight within BRICS, posted a GDP of $17-$18 trillion last year, dwarfed by the United States. However, it is closing the gap steadily. At the current pace, most experts predict China will surpass the US by the end of this decade.

While they cannot be called a monolith, the BRICS countries share a common priority: breaking free from the chains of underdevelopment. They argue that the United States, along with its G7 allies—Canada, Japan, Britain, France, Italy, and Germany—first stifled them as colonies and now controlled them through economic restrictions.

Why de-dollarise?

At the heart of these grievances lies the US dollar, whose reign as the global currency has held emerging economies hostage. But how can a mere piece of green paper, established as the world’s ruling currency in the aftermath of World War II, exert such power over others?

The answer lies in its role as an international currency and how it operates.

Imagine this: foreign nations send the US the fruits of their labour — French wine, Japanese electronics, African copper — and in return, the US sends little green pieces of paper, which cost nothing to produce.

This paper, the dollar, is accepted globally because it’s needed for currency reserves and international transactions. While most countries must trade goods of equivalent value, the US essentially gets something for nothing – a privilege unmatched in the modern world.

Similarly, the drive for de-dollarisation gained momentum after the use of economic sanctions in the wake of the Ukraine conflict.

‘Not a crusade against the order’

As BRICS expands its footprint, Western analysts have grown increasingly uneasy about its growing reach.

Critics allege that the bloc is stoking anti-Western sentiment in the Global South, with China and Russia positioning it as a rival to the postwar global order anchored in institutions like the United Nations, the International Monetary Fund (IMF), and the World Bank.

However, the Western rhetoric misses the mark. While BRICS does seek an alternative, the alternative is not a “motley group of authoritarians” breaking free from the historical time, launching a violent pause in the wheels of the system.

Instead, it seeks to recalibrate the balance of power within it. While carefully authoring its economic fate, it has scant interest in toppling the order.

The bloc’s recent declaration leaves little room for doubt. “We reaffirm our commitment to multilateralism and upholding international law, including the Purposes and Principles enshrined in the Charter of the United Nations (UN) as its indispensable cornerstone,” the Kazan declaration states. Rather than tearing down the pillars of the existing order, BRICS proposes using them to address pressing global challenges.

The solutions outlined in its 32-page document channel nearly every issue—from peace and security to climate action and financial reforms—through existing institutions. Trade disputes should go through the World Trade Organisation (WTO), financial matters through the IMF and World Bank, and pandemic preparedness under World Health Organisation (WHO) guidance.

Similarly, UN-led efforts like climate change conferences and resolutions of the General Assembly receive strong endorsements. Even the G20, often seen as a bastion of Western influence, is described as “the premier global forum for multilateral economic and financial cooperation”.

Far from rejecting democratic principles, the group explicitly reaffirms its commitment to democracy and human rights, advocating for “a brighter shared future for the international community based on mutually beneficial cooperation”.

That said, BRICS does aim to fortify its own institutions, such as the New Development Bank and a proposed payment system to ‘de-dollarise’ trade among its members. While these initiatives hint at a gradual shift in economic dynamics, they are framed as complementary rather than combative.

While Western media largely portrayed the Kazan summit as a political triumph for Putin, the summit facilitated progress in resolving the long-standing border dispute between India and China, breaking years of stalemate.

Although some in the West may prefer to stoke divisions between these two Asian powers, easing tensions between nuclear-armed states is undeniably in favour of global stability.

Moreover, in an unexpected turn of events, both Armenia and Azerbaijan participated, despite their ongoing territorial dispute. Earlier this year, Azerbaijan applied for formal BRICS membership, while Armenia, attending for the first time, sought to attract foreign investment to bolster its economy.

Many observers stress that rather than fixating on perceived anti-Western undertones, it might be time to view BRICS as a platform advocating fairer representation in a world order historically dominated by an elite few.

Long overdue reform

Writing in Foreign Policy, Nicholas Bequelin, a senior fellow at Yale Law School’s Paul Tsai China Centre and the former Asia-Pacific director of Amnesty International, notes that characterising efforts by non-Western groups to seek greater influence in international relations as a breakdown of multilateralism “sidesteps the West’s own responsibility and unwillingness to take steps toward long overdue reform”.

He went on to list the needed reforms, including "the need to fix the global financial architecture, respect climate pledges and assume responsibilities for climate impacts in developing countries, curb double standards in the invocation of international humanitarian law, fulfil aid and development commitments, or lessen drastic intellectual property rules that prevent poorer countries from producing lifesaving medicine."

He cautioned that when the West equates calls for a fairer international system with an intent to dismantle it—resorting to the familiar “me or chaos” narrative—it erodes the legitimacy of principles that urgently require global protection: "adherence to international law, the prohibition of wars of aggression, recognition that individuals and civilians have both a legal status and rights, and the necessity of global governance beyond mere multilateralism."

"If the West refuses to lead on these, it can hardly complain about the rise of groups such as BRICS."

‘The Long Revolution’

Samir Amin, in his The Long Revolution of the Global South, argues that for all regions of the capitalist Third World, constructing an auto-centred economy is an unavoidable precondition for further progress. This necessitates that the external relations be subordinated to the priorities of internal development, rather than adjusting the internal economy to external constraints.

It can be safely asserted that the BRICS and similar movements echo the historic Conference of Bandung, which declared the will of Asian and African nations to reclaim their sovereignty and complete their independence through authentic, consistent development benefiting all labouring classes.

However, for certain countries, particularly China, achieving social and economic gains meant partially "de-linking" from the global system to carve out their own paths with agency and autonomy before “linking” again, fully participating in the global economy.

This could only be achieved by shedding the restrictive forces of the world system. In this sense, BRICS’ call for a fairer international financial system is not anti-Western but pro-South, pro-development.

In 1955, most Asian and Middle Eastern countries had already reclaimed their sovereignty in the wake of World War II, while liberation movements in Africa, in particular, continued their struggles to achieve the same goal.

The conference was the first international gathering of "non-European" (or "coloured") nations, whose rights had been denied by the colonial and imperial powers of Europe, the United States, and Japan.

Despite differences in size, culture, religion, and historical trajectories, these nations united in their rejection of the colonial and semi-colonial globalisation pattern constructed by Western powers for their exclusive benefit.

Bandung also declared the resolve of Asian and African nations to complete their sovereignty by engaging in authentic, accelerated inward-looking development—this being the condition for their participation in shaping the world system on equal footing with the historic imperialist powers.

As President Soekarno stated in his address, the conference represented countries that had made varied choices about how to achieve their development goals. Some, like China, North Vietnam, and North Korea, followed "the socialist road" inspired by Marxism. Others, such as Soekarno’s Indonesia, Nehru’s India, and Nasser’s Egypt, pursued national/popular projects combining social reforms with specific national paths.

All these nations prioritised the diversification and industrialisation of their economies, aiming to break free from their roles as mere producers and exporters of agricultural and mining commodities.

Similarly, at its heart, the BRICS agenda revolves around economics, not ideology.

“We note the emergence of new centres of power, policy decision-making and economic growth, which can pave the way for a more equitable, just, democratic and balanced multipolar world order,” the Kazan declaration stated.

“Multipolarity can expand opportunities for EMDCs to unlock their constructive potential and enjoy universally beneficial, inclusive and equitable economic globalisation and cooperation.”

This geoeconomics approach was more evident in India’s pragmatic approach as it continues to walk the line of neutrality and non-alignment. While keeping its friendship with Russia intact, Delhi also remains a key player in BRICS and the Shanghai Cooperation Organisation (SCO).

However, it also sits at the table of the Quad, resisting US pressure to transform this grouping into a full-blown alliance aimed at containing China. At the same time, India has made it clear that it wants no part in the AUKUS pact, designed with China in the crosshairs.

Furthermore, at the 16th summit, members also committed to establishing a grain trading platform, the “BRICS Grain Exchange” proposed by Russia, which aims to support food and commodity trade within the bloc.

“Once implemented, this initiative would help protect national markets from adverse external interference, speculation, and attempts to create artificial food shortages,” Russian President Vladimir Putin said at a summit meeting, accidentally echoing the legacy of the Bandung Conference.

Over time, Putin added, the group could also consider transforming the grain exchange into a fully operational commodity exchange.

Russia is also in talks with its BRICS counterparts about setting up an international precious metals exchange. “The mechanism will include the creation of price indicators for metals, standards for the production and trade of bullion, and instruments for accrediting market participants, clearing, and auditing within BRICS,” as Russian Minister of Finance Anton Siluanov put it.

This proposed platform could very well step on the toes of existing Western metals exchanges like the London Metal Exchange (LME), while offering a shield against financial sanctions the West has imposed on Russia and other BRICS nations, such as Iran.

The Kazan Declaration also pointed out the growing concerns within BRICS over the way sanctions strangle the economic growth of nations across the globe. The declaration highlights how sanctions are disrupting the global economy, international trade, and efforts to meet the United Nations Sustainable Development Goals (SDGs).

Unlawful and coercive unilateral measures, including illegal sanctions, the declaration states, “undermine the UN Charter, the multilateral trading system, the sustainable development and environmental agreements.”

They also “negatively impact economic growth, energy, health and food security, exacerbating poverty and environmental challenges.”

BRICS, which now represents 37 per cent of global economic output, has firmly united in calling for the cessation of such punitive economic actions.

“We reiterate that the unilateral coercive measures, inter alia in the form of unilateral economic sanctions and secondary sanctions that are contrary to international law, have far-reaching implications for the human rights, including the right to development, of the general population of targeted states, disproportionally affecting the poor and people in vulnerable situations,” the declaration added. “Therefore, we call for their elimination.”

Elsewhere, BRICS members reaffirmed their support for the New Development Bank (NDB), their jointly funded development-finance institution, which is emerging as a key alternative to the Western-dominated World Bank and International Monetary Fund.

“We support the NDB in continuously expanding local currency financing and strengthening innovation in investment and financing tools,” the declaration stated, adding that members are encouraging the institution to pursue “innovative financing mechanisms to mobilise financing from diversified sources.”

In line with this, BRICS confirmed the creation of a new investment platform, designed to leverage the NDB’s existing infrastructure to boost investment flows “into the countries of BRICS and the Global South mechanisms.”

The innovative drive extends into cross-border financial infrastructure, with BRICS members recognising the need to explore the feasibility of connecting their financial market systems.

“We agree to discuss and study the feasibility of [the] establishment of an independent cross-border settlement and depositary infrastructure, BRICS Clear, an initiative to complement the existing financial market infrastructure, as well as BRICS independent reinsurance capacity, including BRICS (Re)Insurance Company, with participation on a voluntary basis,” the declaration confirmed.

Cracks in the ‘Crystal Palace’

To understand the essence of modern capitalism and the global system, German philosopher Peter Sloterdijk suggests exploring Dostoevsky's metaphor of the Crystal Palace, which the latter encountered in London.

In his magnum opus, ‘In the World Interior of Capital: Towards a Philosophical Theory of Globalisation’, Peter notes, “He recognised the monstrous edifice as a man-eating structure," Sloterdijs. “A cult container in which humans pay homage to the demons of the west: the power of money and pure movement."

Sloterdijk argues that Paxton's creation has left an indelible mark, evident in the glass palaces of today that house the one-and-a-half billion beneficiaries of globalisation. Meanwhile, three times that number remain on the outside, some pressing their noses against the glass until security forces them away.

"Who can deny," he writes, "that in its primary aspects, the western world – especially the European Union – embodies such a great interior today?"

In 1863, Dostoevsky's disdain for what he saw in London deepened after reading Nikolai Chernyshevsky's What Is to Be Done? The novel envisioned the rise of a new kind of human, living in eternal peace within a palace of glass and steel. Dostoevsky lashed out at this vision of enclosure, claiming it would sap human vitality.

Drawing on this critique, Sloterdijk argued that Fukuyama's notion of the "end of history" finds its roots here. Real history, according to Sloterdijk, unfolded in the open air, through exploration, conflict, and expansion.

If such struggles were to culminate in eternal peace, all of social life would need to be sheltered within controlled environments.

"No more historic events could take place under such conditions … only mood competitions between parties and the fluctuations among their consumers," he writes, likening this stagnation to a ship becalmed at sea.

This vision of the Crystal Palace bears striking similarities to the globalisation of the West and the principles of neoliberalism. Much like the Palace, these systems project an illusion of openness, promising boundless opportunities and interconnectedness. In reality, however, they impose invisible walls.

The glossy facade obscures the barriers dividing winners and losers, insiders and outsiders, while perpetuating the illusion of equality. Those excluded can glimpse the privileges within but cannot cross the threshold – a world separated by glass, not steel, making the divide all the more insidious.

With BRICS rising and expanding, the walls of the stifling walls of glass are shattering, allowing in the much-needed fresh air of accessibility and equality.