The BRICS Johannesburg Summit’s Hype, Hope and Helplessness
Before the August 22-24 summit in Johannesburg raised expectations for a new counterbalancing force in global politics – and struck fear into many Western elites’ hearts and minds – at least five factors had reduced the Brazil-Russia-India-China-South Africa (BRICS) bloc to acrimonious paralysis. However, conditions have changed over the past year, and talk of a ‘BRICS+’ with nearly two dozen new members and a ‘de-dollarization’ agenda have raised the profile of this network to an unprecedented – and utterly unrealistic – level.
Emerging from a period in which internal appeared to cause ‘spalling’– in which the BRICS wall came close to toppling – it isuseful to recall what was going wrong:
Yet in spite of the chaos created in the process, the BRICS’ three primary-product exporting economies – Brazil, Russia and South Africa – performed better than expected from mid-2020 after the main lock-down shock, as mineral and fossil fuel prices first crashed but then soared to record levels, and again from March 2022 after Putin’s invasion, when commodity prices rose even higher for at least a few more months.
Even Russia could therefore bounce back surprisingly quickly from intense Western financial sanctions and the seizure of more than $600 billion in overseas assets belonging to the state and oligarchs – sanctions which sent strong messages to formerly pro-Western tyrants especially in the Middle East, that their Western assets were not safe either.
Regardless of the prospect of Trump returning to power in early 2025, a general dilemma for tyrants is that Washington sometimes whimsically installs and replaces client-regime leaders, without apparent logic. While that has been a long-standing practice, external regime change has become more complex due to the power of financial sanctions.
Particularly revealing was the experience Saudi Arabia had, first in 2020 as one of U.S. presidential candidate Joe Biden’s main foreign-policy rhetorical targets (as a ‘pariah’), given Riyadh’s bone-saw execution of journalist Jamal Khashoggi in 2018. In early 2021 Biden announced the Saudi war on Yemen must cease, but shifted tack and went quiet within a year, as energy prices soared, Biden U-turned and personally visited Crown Prince Mohammed bin Salman (‘MBS’) to beg Riyadh to raise oil output (to lower prices), which the Saudi leader refused.
Indeed by early 2023, in another sign of clear disrespect for Washington, Riyadh not only made a preliminary peace deal with Iran, brokered by China, but began a ‘petro-yuan’ trading system to undermine dollar hegemony. In early August, Washington clumsily attempted to reverse that particularly important de-dollarization with a package that also included Trump-era Abraham Accord status – ‘normalizing’ Israeli-Saudi ties similar to the UAE in 2020 – which the Saudi leader put on hold until after dust settles at the BRICS summit and the bloc’s newest members are chosen.
With a new BRICS+ beginning to take shape, the most striking features of the candidates now being considered are their extreme carbon intensity and tyrannical political character, personified by MBS. The full list of first-round candidates to join BRICS, named in early August, by South African foreign minister Naledi Pandor, are Algeria, Argentina, Bangladesh, Bahrain, Belarus, Bolivia, Cuba, Egypt, Ethiopia, Honduras, Indonesia, Iran, Kazakhstan, Kuwait, Morocco, Nigeria, State of Palestine, Saudi Arabia, Senegal, Thailand, United Arab Emirates, Venezuela and Vietnam.
It is a hodgepodge with no discernable ideology, but overflowing with anti-social, anti-ecological and financially $-inoculated self-interests. The big prizes for China and Russia, driving the expansion, would be Saudi Arabia and Iran. If all 23 new candidates are agreed upon, the 28 BRICS+ countries can be assessed in terms of their relatively pro-Putin leaning (voting against United Nations withdrawal resolutions) or neutral stance (abstaining on the votes, as did South Africa), versus those favouring Ukraine.
In the latter camp are 14 candidate countries in addition to Brazil: Argentina, Bahrain, Bangladesh, Egypt, Honduras, Indonesia, Kuwait, Morocco, Nigeria, Palestine, Saudi Arabia, Senegal, Thailand and the UAE.
In contrast, there are 13 BRICS and BRICS+ candidate governments that were either against or abstained from the February 2023 resolution: Algeria, Belarus, Bolivia, China, Cuba, Ethiopia, India, Iran, Kazakhstan, Russia, South Africa, Venezuela and Vietnam. Hence, from a ratio of four to one in the against-or-abstaining group under the present BRICS, the ratio would potentially switch from 13 to 15.
As for what might be considered genuine, indisputable democracies, there are really only Argentina, Bolivia and Honduras, joining Brazil and South Africa. For good reason, there has been traditional – at least 21st-century – left solidarity with BRICS+ candidates Bolivia, Cuba, Palestine and Venezuela, though the latter has waned in progressive values over the decade since Hugo Chavez’ death, and of course there also remains left nostalgia for the 1960s-era anti-colonial movements of Algeria and Vietnam.
Of concern, as well, are the reactionary regimes that long toiled within the Western sphere of influence: Indonesia, Kuwait, Morocco, Saudi Arabia, Thailand and the UAE. Argentina may join their ranks if the October election results in a Bolsonaro-type victor (Javier Milei). Some of their shifts in allegiance from the West to the BRICS are, in each case, reversible depending upon the geopolitical conjuncture.
And in many respects, the most dangerously conservative aspect of the potential new bloc is the extraordinary degree to which the candidates are carbon addicted. Latest comparative data from 2021 suggest that not only will the emissions self-interest rise, what with Iran, Saudi Arabia, Indonesia, Vietnam, Thailand, Kazakhstan, Egypt and the UAE adding 3.375 billion tons of annual CO2 from energy and industry, to the existing BRICS bloc’s 16.9 billion tons. There are, in addition, other candidate countries whose foreign exchange earnings come largely from oil and gas: Algeria, Argentina, Bahrain, Kuwait, Nigeria, Senegal, and Venezuela.
Yet in the expansion process, standard talk-left walk-right diplomacy can be expected. As Pandor committed, “I certainly would guard against any criteria for expansion that would lead us down a path where we contribute to increasing conflict in the global community or in any part of the world.”
Retreat from multilateral reform – as is the BRICS’
One obvious case was pandemic vaccine development, of vital importance in 2020-22 when Covid-19 killed between 7 million (official) and 31 million people, depending upon ‘excess death‘ estimates (which in India, Brazil and South Africa numbered at least three times the official death toll). And yet while the 2018 Johannesburg Summit promised a BRICS vaccine centre based in that city, but it only materialized in a tokenistic, virtual mode in March 2022.
Questions remained about the efficacy of Chinese and Russian vaccines in comparison to the West’s mRNA technology (South Africa even disallowed Sputnik because of dangers for people living with HIV/AIDS). Then there was nefarious U.S. state-funded (and from 2014-17 banned) Chinese “gain of function” research on behalf of Big Pharmacorps. After Trump took power in 2017, these were resumed only in Wuhan – in a “leaky” laboratory – because the biohazards were considered too dangerous for North Carolina’s Research Triangle site. Chinese records of the Wuhan experiments – and of the first cases of illness that occurred at the lab in late 2019 – remain impossible to access, but this relationship appears to, again, reflect imperial master and sub-imperial serf.
Another sub-imperial duty is to abide by international financial arrangements. Hence, further false hopes for genuine BRICS alternatives to multilateral economic power arose from the International Monetary Fund’s abuse of poor countries’ sovereignty and imposition of neoliberalism, austerity and privatization dogmas – without genuine BRICS opposition:
In short, after a decade in which – since the Durban 2013 BRICS summit – international development finance has been high atop the leaders’ agenda, the global-economic ‘Washington Consensus’ philosophy hasn’t changed. Nor have the Bretton Woods Institutions’ predatory lending practices.
Those ecologically- and socially-destructive – and corrupt – practices are also evident in the main BRICS accomplishment, the New Development Bank (NDB), which like the notional CRA, quickly became an official ally of the World Bank.
Likewise, with former president Dilma Rousseff recently appointed as president of the BRICS NDB, it was a sign of the times on 26 July 2023 that, just after meeting Putin, she tweeted, “The NDB reiterated that it is not planning new projects in Russia and operates in compliance with applicable restrictions on international financial and capital markets. Any speculations on such a matter are unfounded.” She also committed to merely a 30% local-currency loan portfolio by 2030, an extremely conservative target in spite of the damage done by hard-currency loans.
There had been enormous hype about the potential to shift out of the dollar’s hegemony, for good reasons:
By early 2023 critics of dollar overextension noted that two of the U.S. government’s three largest-ever bankruptcies hit in early 2023. In February, ebullient Brazilian journalist Pepe Escobar entitled a popular tweet, “BRICS IT UP, BABY” because “If China, Russia and India agree on a gold-backed currency, that’s the END of the fiat dollar… A new currency would lead to the U.S. current account deficit – $18 trillion – crashing the dollar.”
But such hype was unrealistic, so in June, in the immediate wake of a BRICS foreign ministers gathering, monetary rebellion was squelched by the lead South African diplomat, Anil Sooklal: “We have never spoken about de-dollarization. What we have done, which is nothing new, we signed an agreement several years ago, an interbank agreement, paving the way to trade in our local currencies.” But the latter will be tough going, as a result of enormous trade imbalances within the BRICS, plus vigorous Chinese and Indian exchange controls that make trade-revenue repatriation difficult.
Hence, Escobar more soberly predicted in early August, “The BRICS are not going to announce a new currency in South Africa, first of all because they haven’t even studied the details. It’s impossible. Second, because you cannot start a new currency just like that. It’s a process that could take as long as ten years. What they are doing and they’re going to start improving on, is trade settlements using their own BRICS-member currencies, and expand it to BRICS+.”
Escobar suggested it could take a decade to establish and then it would consist of, “maybe, a new currency which is going to be basically a trade settlement currency and not a currency like, for instance, the Euro or the British pound. Something completely different: a trade settlement mechanism capable of bypassing the U.S dollar ecosystem which, you know, is all over the world. It’s very hard to escape it.”
Likewise, Vijay Prashad of the Delhi-based Tricontinental Institute admitted to a seminar at the University of Johannesburg in August: “Nobody right now wants to supplant the dollar. I asked people in the People’s Bank of China, ‘will the renminbi supplant the dollar?’ They’re not going to do it. Why? Because the Chinese pride themselves on having capital controls and control over their currency.”
That’s an extremely important point, given China’s impressive ability to slow capital flight after the 2015-16 stock market crashes using those controls, and its laudable banning of cryptocurrencies.
Prashad asked, “Are we going to enter a phase where we have a basket of currencies? You know, maybe that’s a long time to come, so people who are excited online about dedollarization should calm down.”
The so-called gold bugs and other enthusiasts of BRICS potential anti-imperial capacities should indeed recognize that the most conservative bureaucrats in nearly every country are in the finance ministries and central banks – and the BRICS are no exception.
And while at a conference in rural China not far from the Mongolia border on August 18, I happened across Justin Lin, not only a former (2008-12) World Bank Chief Economist, but one of the country’s most sophisticated geopolitical observers. I asked if anyone in his circuits had expressed any intentions for the renmimbi to supplant the dollar, whether or not in tandem with the ruble, rupee, rand and real – and he simply shook his head.
The BRICS’ reticence to fight imperialism’s core basis of financial power should have come as no surprise, because in case after case, including the UN Framework Convention on Climate Change (UNFCCC) – starting in 2009 at the Copenhagen summit where Barack Obama joined Lula, Wen Jiabao, Manhoman Singh and Jacob Zuma for a status quo-oriented deal that they then imposed on everyone else – the BRICS spent the 2010s playing into and not rebelling against, the so-called Washington-Brussels-London-Tokyo ‘unipolar’ order.
The G20 – which on September 9-10 will be hosted by Modi in Delhi – is the most logical site for this fusion, especially given his recent dalliances with Biden and Emmanuel Macron (who last month asked to be allowed to join the BRICS summit and was refused). However, first, a talk-left walk-right process within the BRICS is a vital precursor, as events in Johannesburg will surely confirm.
(On August 21-22, a Johannesburg webinar of analysis and an
activist teach-in will precede protests near the BRICS
summit site on August 23; details are on the BRICS from Below website.)