Does Brics matter? That’s not a silly question, merely one that’s not asked often enough.
I have copied this famous opening line — famous to China scholars, anyhow — from a 1999 article in Foreign Affairs by the late Gerald Segal, then director of studies at the International Institute for Strategic Studies in London.
Twenty-four years ago Segal published his seminal essay, “Does China Matter?”, to critically examine the media hype around China’s rise. He pointed out various facts about China: her lack of influence on global culture, and lack of contribution to global governance, among other shortcomings.
China has come a long way from 24 years ago and it appears that its participation in global governance is not what the West would have preferred. Instead of conforming to and contributing to the liberal global order led by the West, together with other Brics countries China is leading the charge to reform the US-led liberal global order.
So does Brics matter? Top of the agenda of the 2023 summit to be held in the Sandton Convention Centre next week is Brics expansion. Countries such as Saudi Arabia, Indonesia, Argentina and others have expressed interest or formally applied to join Brics. Both Russia and China are keen advocates for expansion.
There are two reasons for this. Politically they want to build a developing country bloc as a counterweight to the West, epitomised by the Group of Seven (G7) group of the world’s most industrialised countries. Economically Russia and China are alarmed by what they see as the “weaponisation” of the dollar.
Since Russia’s invasion of Ukraine in 2022 the West has frozen the nearly half of Russia’s foreign currency reserves that is denominated in dollars and removed Russian banks from the Swift interbank messaging service that facilitates international payments. This “weaponisation” of the dollar has done serious damage to the Russian economy and its ability to conduct international trade.
Having begun in 2018 under the Trump administration, the China-US trade war has only intensified. Last week, US President Joe Biden issued an executive order restricting US investments in Chinese technology. Basing the order on US national security considerations, Biden banned US investments into China’s semiconductors, microelectronics and quantum information technologies, as well as certain artificial intelligence systems.
Given growing pressure from the West on Russia and China, they are motivated to accelerate moves away from the dollar-based international financing system, hence the urgency to grow Brics.
India, Brazil and SA are not in the US’s crosshairs. In fact, these countries’ respective national interests demand that they maintain good relations with the West. For the past few years, India has been the strongest advocate against expansion, concerned that it will lose influence to China in an expanded Brics.
According to a Business Day report, President Cyril Ramaphosa has led the charge that has successfully persuaded India to at least agree in principle that Brics should expand as a bloc (“Brazil’s not sure about Brics expansion, and other members are not happy”, August 2). This leaves Brazil, which had been comfortable leaving India to block expansion plans.
Brasilia is reportedly also not keen on expansion as it is concerned that it will lose influence in the bloc as other middle-powers join the organisation. Reuters cited an unnamed Brazilian official who said “Brazil’s position has been concerned with the cohesion of the group and preservation of our space in a group of important countries”. Clearly, Brics expansion is consistent with Russian and Chinese geopolitical goals, but should be less important from an SA perspective.
Does Brics matter? The answer is yes if it facilitates a boom in intra-Brics trade, expedites exports of SA agriculture products to Bric countries, and Brics membership can facilitate foreign direct investments into SA’s industrial and manufacturing sectors.
The point of the spear for Brics is its New Development Bank. It remains to be seen whether the bank can provide efficient and sustainable infrastructure development funding to developing countries without burdensome conditionalities.
• Dr Kuo is adjunct senior lecturer in the University of Cape Town’s Graduate School of Business.
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