There’s a new club in town and it is taking on new members. And it’s not the European Union.
Ahead of this week’s BRICS summit (Brazil, Russia, India, China and South Africa) in Johannesburg, the consensus among leaders was that opening the doors to new members would give the grouping a much-needed jolt.
Other pre-summit plans – such as the move towards de-dollarisation, and the Brazilian idea of creating a common currency for the bloc – were put on the back burner.
Expanding the club to include Argentina, Ethiopia, Iran, Saudi Arabia, Egypt and the UAE in January will result in the new BRICS+, representing 46% of the world’s population and an even greater share of its economic output.
Of the new six, the inclusion of Iran and Ethiopia will raise eyebrows. Neither are regional heavyweights economically or politically, while Ethiopia is barely recovering from a civil war in its northern provinces. Indonesia and Bangladesh, in contrast, would have brought far more economic dynamism to the table.
What remains unclear amid the group’s expansion is the main purpose of the organisation.
The BRICS group does not have a common market or harmonised regulatory standards. Its main asset is a financial architecture that features a development bank and cash reserve for countries whose currency gets into difficulty. It is hard to see the club being a political talking shop since the existing members have little in common politically.
Nor is there any desire, from South Africa or elsewhere, for the BRICS to become a mouthpiece for the developing world or Global South. The African Union is close to becoming a member of the G20 and there is support from the EU and United States for a permanent African seat on the United Nations Security Council.
The danger to the BRICS’s future is that it becomes an anti-Western club.
Though Vladimir Putin’s speech – given virtually because of the International Criminal Court’s arrest warrant against him – had a distinctly anti-Western tinge, this is a path that other members, existing and new, will be anxious to avoid.
“We will not be drawn into a contest between global powers,” Ramaphosa said ahead of the summit. The new members, with the exception of Iran, have sought to position themselves as non-aligned, with good relations with the EU, US and Russia.
More likely is that the BRICS+ works to increase its economic power. Saudi Arabia and the UAE offer the prospect of major investment on a scale that only China is prepared to match. That could undermine the EU’s economic influence on the BRICS members and put more pressure on the bloc’s Global Gateway infrastructure investment programme.
The next step beyond a common investment strategy would be the mooted shift to a common payment system that would offer an alternative to the dollar.
As the experience of the eurozone has demonstrated, even with a single market, central bank and strict rules on fiscal policy, a currency union is still fraught with difficulty. That level of political and economic integration is light years away from the current state of the BRICS.
For the moment, the BRICS poses no political threat to the EU but its expansion is another reminder that the tectonic plates of geopolitics are shifting.
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Look out for…
- EU institutions are still in summer recess
[Edited by Nathalie Weatherald/Alice Taylor]
Source: euractiv.com
