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  Opinion   Columnists  20 Aug 2023  Sanjaya Baru | Why Brics is still relevant in a divided, post-G20 world

Sanjaya Baru | Why Brics is still relevant in a divided, post-G20 world

The writer is an economist, a former newspaper editor, a best-selling author, and former adviser to Prime Minister Manmohan Singh
Published : Aug 21, 2023, 12:05 am IST
Updated : Aug 21, 2023, 12:05 am IST

Why would an increasing number of countries wish to join an anachronistic group?

Prime Minister Narendra Modi will attend the summit meeting later this week. (PTI File Photo)
 Prime Minister Narendra Modi will attend the summit meeting later this week. (PTI File Photo)

The heads of government of the Brics group (Brazil, Russia, India, China and South Africa) will meet later this week in Johannesburg for their fifteenth summit meeting. Of late, the Western media and Western think tanks have been busy questioning the relevance of the group. How can a group that is a mix of democracies and autocracies, more developed and less, and one comprising a global “pariah” like Russia and with two members (India and China) increasingly at odds be coherent and relevant any longer?

While the question has merit, the fact also remains that there is now a sudden rush for membership of the group, with Algeria, Argentina, Egypt, Mexico, Nigeria, Saudi Arabia and the United Arab Emirates expressing their interest in joining the group.

Why would an increasing number of countries wish to join an anachronistic group?

Clearly, Brics serves some purpose and despite all the deliberate rumour-mongering in the media, Prime Minister Narendra Modi will attend the summit meeting later this week.

The idea of an emerging market group comprising of countries with some shared characteristics and interests, namely Brazil, Russia, India and China (Bric), was first floated in 2001 by an American corporation, Goldman Sachs. It then prompted Russia to take the initiative and convene a meeting of the foreign ministers of the four countries in New York, on the sidelines of the United Nations General Assembly session in 2006. The first Bric summit was hosted in Russia by President Vladimir Putin in 2009. It was at the 2010 summit that China took the initiative to invite South Africa, and thus Bric became Brics.

Timing is key to the success or failure of such international diplomatic initiatives. If Brazil, India and China decided to land up in Yekaterinburg in Russia on President Putin’s invitation, it was in large part due to the timing of that gathering in June 2009. In the previous nine months the global economy had gone into a downward spin, following the “trans-Atlantic” financial crisis of 2008-09. The developed economies, constituted since 1973 into a group of rich, industrialised economies called the Group of Seven (United States, Canada, France, Germany, Italy, Japan and the United Kingdom) quickly came together to address the crisis.

They then discovered that they were incapable of dealing with the crisis without some help from China. The G-7 reached out to the Chinese but were unwilling to admit China into the then existing G-8. (The G-7 was briefly G-8 when Russia was admitted. In 2014, Russia was disinvited.)

President George W. Bush then took the initiative to convene a heads of government meeting of the G-20, a pre-existing finance ministers’ group. Even as the G-20 came into being, the hope of many that this would result in an eventual marginalisation of the G-7, with G-20 becoming the principal head table of the major powers, was belied. The G-7 continued to be active and even their resolution of the 2008-09 trans-Atlantic financial crisis pointed to how they remained focused on their own interests and power, with little concern for other economies.

The three major emerging market democracies of Asia, Africa and Latin America -- India, Brazil and South Africa -- already constituted into IBSA, happily joined hands with China and Russia in Brics to ensure that their global economic interests would also be taken care of. Thus, when the Western critics of Brics ask what need and relevance does the group have today, the counter question has to be “what relevance does the G-7 have in a post-G-20 world”?

The events of the past eighteen months, since the Russian invasion of Ukraine in February 2022 and the imposition of economic sanctions by the United States and the European Union, have made it very clear that even though there is a global group like the G-20, it remains internally divided between the G-7 and the Brics nations. Europe’s endorsement of the US sanctions on Russia and Japan’s courting of Nato, a trans-Atlantic military alliance, suggest that the developed industrial economies will circle their wagons and gather their forces the moment there is any challenge, economic or military, to their dominance of the global system.

It is a fact that relations between China and India are once again going through a very difficult phase. It is also true that Russia’s invasion of Ukraine has not been approved of by most countries, even if many developing countries, including India, have chosen to have a view of their own and have so far refused to gang up with the US, Europe and the Nato countries. However, the Brics countries and the aspirants for membership feel the need for a “balancer” to the G-7 in addressing a range of global challenges, including climate change, sustainable development, trade and finance, intellectual property rights, reform of multilateral institutions, and so on.

A new subject that is increasingly being referred to is the need to create an alternative to the US dollar. Can the Brics nations create and sustain a Brics currency? Perhaps if Saudi Arabia and the UAE are admitted they, along with China, would have the wherewithal to sustain an alternative to the dollar. However, it will take a lot of effort, especially on the part of China, to find support among many emerging economies for such an initiative. What has prompted the renewal of the search for a new global currency is the mismanagement of the US economy and the cynical way in which dollar supply was increased after the Covid-19 pandemic.

While nothing dramatic should be expected to come out of the Johannesburg summit, it will serve the purpose of reinforcing the relevance of Brics in a divided world. There is of course no love lost for China and Russia among the developing countries, but they also remain wary of the United States and the EU. As long the East-West rivalry and geopolitical tensions remain, and as long as the rich, industrialised economies seek to retain their dominance of the global economic system, the Global South will find platforms like Brics useful. Despite all the significant economic and geopolitical changes under way over the past half-century, the two divides of the 20th century -- East-West and North-South -- continue to define global institutions and relationships.

Tags: brics, prime minister narendra modi, russia ukraine war