How Real is the BRICS Challenge to Reshuffle the World?
“BRICS’ economic clout may help reduce some of the glaring economic imbalances between the rich, middle-income, and poor nations across the world,” economist Branko Milanovic, wrote. In a similar vein, Christopher Vandome, a senior research fellow with the Chatham House Africa Programme, believes that the bloc can have an impact on the global energy market and ongoing conversations on climate change. “New members that are fossil fuel producers could use the platform to push an alternative narrative to the G20 or COP on the green transition and argue for a slower move away from oil and gas,” he said in an interview with Inkstick. But critics have pointed to a number of factors, including the rivalry between China and India, as well as a host of other contradictions, that may hamper the accomplishment of the bloc’s stated goals.
Challenging the Status Quo?
There is no doubt that BRICS has come a long way since its first summit in 2009, which took place in Yekaterinburg, Russia. Analysts say the growing acceptance of the bloc underscores the continuing search, since the collapse of the Berlin Wall, for political and economic counterpoints to the post-World War II establishment that has coalesced around US-led global institutions. By the time the 15th summit ended this summer, six new members (Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates) had been invited to join the bloc. There are 44 other emerging-market or poor countries whose membership applications are pending.
“The idea of BRICS has been long overdue right from the inception of the United Nations, which contrary to its name, has functioned as an exploitative and imperialistic body imposed by the so-called powerful nations against the rest of humanity,” Abiodun Aremu told Inkstick. Aremu is the coordinator of the Nigeria-based pan-Africanist group, Amílcar Cabral Ideological School-Movement, which devotes itself to the spreading of the ideas of Guinean nationalist leader, Dr. Amílcar Lopes Cabral, who led the liberation war for the independence of Guinea-Bissau.
Several African leaders and pan-African advocates have welcomed BRICS as the advent of the downfall of an unjust imperialist world order, which they see as the basis for the continent’s underdevelopment. In particular, African leaders are resentful of global multilateralism as defined by the UN with skewed representation and unbalanced veto power at the UN Security Council. They are resentful of the Global North’s control of trade through the World Trade Organization and the outsized role the United States and its currency, the dollar, play as the currency of global exchange. “BRICS is an opportunity to redefine, reconstruct, recover, and reassert the true African identity,” Aremu added.
This resentment is born out of the afterlife of the transatlantic slave trade, the legacy of colonialism, and the anti-colonial struggles of the 20th century, all the way up to the neo-colonialism that continues today that has bred a desire for full decolonization and sovereignty across West and Central Africa. Academics argue that Africa is not yet free despite the fact that a number of formerly colonized African countries became independent in the 1960s. They point to the embedded neocolonial structures still at play on the continent. For instance, 14 former French colonies still use the CFA Franc, which has been described as Africa’s last colonial currency. Pegged to the euro and guaranteed by the French treasury, its continuous existence amidst other notable signs of colonial presence has sparked protests from activists and groups like Frapp-France dégage in Senegal and the M62 in Niger.
In addition, Africa’s trade relationship with the rest of the world continues to be highly asymmetrical. For instance, EU imports from Africa are primarily made up of low value-added products like fuels, ores, metals and pearls, precious stones, and food items while in contrast, Africa’s imports from the EU are strongly dominated by manufactured goods. While this partly reflects Africa’s low industrial base, it is also a product of unfair trade regulations under the auspices of the WTO which analysts say has a “one size fits all” that keeps developing countries down and the West at the top. For instance, while throwing its doors wide open to imports, Africa’s exports contend with discriminatory non-tariff and technical barriers like the sanitary and phytosanitary rules which place significant costs and constraints on goods exported to developed countries. In a similar vein, the WTO TRIPS Agreement acts as a barrier to developing countries gaining access to life-saving COVID-19 vaccines and treatments.
This, amidst other factors, explains why the BRICS call for de-dollarization — that is, breaking away from the US dollar as the primary currency for trade — has been received positively by the African masses and even by a section of African leaders, including Kenya’s president who has openly spoken on the need for de-dollarization. In fact, since the summit, expectations have been high that the bloc would undermine destructive Western financial power — especially the dominant US dollar’s role in trade, currency, and payment systems.
“The US dollar is at the center of the US global domination agenda. BRICS therefore provides the best platform so far that has the muscle to reduce the influence of the dollar if its members agree to jointly ditch the dollar in their intra-BRICS trade,” Benedict Wachira, Secretary General of the Communist Party of Kenya, told Inkstick. He went on to explain how African countries lose billions of dollars every year due to dollar exchange rates in trade. He believes that the adoption of trade in local currencies or in an alternative currency will save African countries a lot of money that can be used for the development of its people. For instance, there is very little trade that takes place between African countries and Latin American countries. Trade flows between both regions have suffered since 2011 with Latin American exports from Africa falling by 42% in 2015. “BRICS therefore offers a great platform for African countries to explore trade and deeper relations with South American countries as well as other countries in the world. Politically, BRICS can offer a collective shield to its members, including African countries from US bullying and domination,” He added.
Despite the hype and expectation, however, the Johannesburg summit failed to agree on floating a rival currency to the US dollar. Indeed, proposals for either a BRICS gold-backed or central bank cyber-based currency or for the Chinese renminbi to become more convertible were all met by a tough reality check.
Challenging the US dollar’s global reserve status comes with risks, as the dollar is not only the strongest currency in the market; it controls the majority of global transactions. “Talk of moving away from the dollar is good only for soundbites” Joachim MacEbong, a Senior Governance Analyst with Stears Insights, told Inkstick. He explained that the share of transactions globally that are carried in the dollar has recently increased, not decreased. At the same time, none of the BRICS member states possesses a currency with enough of a wide acceptance to displace the dollar. According to Sim Tshabalala, chief executive officer of the main international South African financier, Standard Bank, an international reserve currency must be the currency of “a state or supranational entity with an equally strong track record on fiscal policy and meeting its debts; being freely available in large quantities in many jurisdictions; and full convertibility at all times.” In reality, this set of characteristics cannot be quickly wished into existence but can only emerge over multiple years. In addition to illiquidity in interbank transfers, there is the fact that trade among BRICS countries is at present too small to sustain a common currency.
“It only makes sense to trade in national currencies (not freely convertible) if the trade balance between the countries is more or less equal. Russia, for example, recently sold lots of oil to India, dealing in rupees. But because India exports much less to Russia than it imports, Moscow now sits with rupees it cannot spend or convert — except to buy goods from India. China’s renminbi isn’t sufficiently convertible and lacks the deep capital markets, market transparency, independent central banks and supporting financial institutions of Western banks,” argues Jakkie Cilliers, head of African Futures and Innovation at the Institute for Security Studies in Pretoria.
Not Yet Uhuru
At the same time, critics say aside from exposing the ills of the global multilateral system, BRICS has offered nothing fundamentally different in terms of alternatives. “At formulation, the BRICS idea had a lot of economic and political potential because we saw it as a challenge to the unipolar world that was been dominated by the United States of America. However, due to several reasons, including the coming into power of right-wing President in Brazil, we didn’t see a lot of progress in the organization in the past few years. We also doubt whether BRICS can challenge the US hegemony now that it has admitted countries like Saudi Arabia, United Arab Emirates and others,” says Wachira. In a similar vein, MacEbong believes that usually coalitions like BRICS are bound by either geography or some shared ideology but nothing of the sort is in operation here. “The current — expanded — BRICS will have countries with a history of tensions, like India/China and Saudi Arabia/Iran. Getting everyone on the same page will be difficult,” he added.
This echoes the views of other critics who have pointed out a contradiction between the BRICS’ economic potential and their political role in shoring up Western-centric multilateralism. “Despite their leaders’ demand for greater equality in the international system, the overall BRICS contribution to multilateralism is accommodating to Western hegemony. As a project of national elites and their multinational corporations, the BRICS have not formulated an ideological alternative to neoliberal globalization of which China is the world’s leading proponent at present. Rather, they work within the capitalist order and occupy an increasingly important place in the expanded reproduction of global capital,” according to two authors who have written extensively on the subject, Ana Garcia, Professor of International Relations at the Federal Rural University of Rio de Janeiro and Patrick Bond of the University of Johannesburg, Centre for Social Change, South Africa.
At the same time, the BRICS’ economic growth has been marked by extreme inequality including high commodity prices and low wages. But what is most concerning is the character of the member states of the bloc. For instance, the summit host, South Africa, has been ranked as the most unequal country in the world, and Russia’s invasion of Ukraine shows that the bloc’s member states are not unfamiliar with brutal imperialist pursuit. The same goes for China, with its authoritarian domestic politics and hegemonic ambitions against its neighbors in Southeast Asia. Brazil, Latin America’s economic powerhouse, is now experiencing an economic slowdown, high inflation and unemployment figures while India, reputed as the world’s fastest-growing economy, exhibits extreme inequality. A 2022 family health survey found that 19% of Indian households still do not use toilet facilities of any kind.
Despite these limitations, African activists believe the bloc can still achieve its aims if it undergoes a paradigm shift. “The only way that BRICS can bring about a better world is by clearly identifying imperialism as the biggest threat to global development and by developing a political and economic strategy and action plan aimed at liberating the BRICS members and other countries, particularly in the global south from the domination of the US and its allies,” Wachira told inkstick.
So far, only three of the 54 African countries, namely South Africa, Egypt, and Ethiopia, are members of BRICS. “As a matter of strategy, every African nation should insist on being an automatic member in BRICS and move to the next BRICS’ meeting to advance an agenda of new terms of relations for all nations in the world. The exploitation of the rich African resources must stop. We have reached a point that the rest of the world under domination must insist on the rights of a peaceful world or there is no world!” Aremu added.
Back Obiora Ikoku is a freelance journalist and activist from Lagos, Nigeria. He writes about social movements and the geopolitics of Africa’s relations with the rest of the world.