(MENAFN- Syndication Bureau) The BRICS grouping of major emerging economies – Brazil, Russia, India, China, and South Africa – have agreed to invite six new member nations to their increasingly powerful club. South African President Cyril Ramaphosa made the marquee announcement this week at the conclusion of the annual BRICS leaders’ summit, held in Johannesburg.
While Western pundits have broadly dismissed the BRICS as still in its infancy, the inclusion of Argentina, Egypt, Ethiopia, and Iran – as well as major energy producers Saudi Arabia and the United Arab Emirates – represents a significant shift that can’t be easily dismissed.
From the outset, BRICS was an organization defined by a seemingly unrealistic optimism. The term “BRIC” was developed by economist Jim O’Neil in 2001 to highlight the strong growth rates in Brazil, Russia, India, and China in the wake of the September 11 attacks on the United States.
Throughout the 2000s, emerging market economies became a subject of investment fascination and, so many argue now, irrational exuberance.
Turkey was the poster child of this excitement. The rise of Turkey’s economy in the late aughts, for example, was compounded by the country’s benevolent soft power approach to having “no problems with neighbors.” This economic and geopolitical strategy propelled the Turkish economy and spurred investment but has been under immense strain in recent years. Unfettered optimism about the rise of the global middle class in emerging markets defined the buoyant mood when the initial BRICs held their first summit, in 2009.
Today, BRICS is dominated by China, its most powerful member. There is less sycophantic writing about the rise of a new middle class. Emerging markets are struggling along with China’s economy. Yet, the foundation for deeper integration between nations outside the West has been laid. China is working to set this foundation and capitalize on these connections while ensuring its economic and foreign policy objectives drive the shifts.
The invitation to Saudi Arabia and the UAE is a vivid example of this strategy. One of China’s primary geopolitical and economic interests is breaking the dollar’s oil and gas trade dominance. When Saudi Aramco floated the idea of an IPO, Chinese state entities expressed interest in taking a minority stake. That never happened, but China has invested handsomely in the Saudi economy and its oil sector.
The Chinese have also emerged as a valued mediator between Saudi Arabia and Iran. In March, Chinese diplomats brokered a reconciliation deal between the two countries in a move that surprised and embarrassed Washington. Including Iran and Saudi Arabia in BRICS+ will increase China’s clout in the Middle East.
Not all countries were so quick to open membership to BRICS. Brazil was notably cautious about including new members but is undoubtedly pleased by the inclusion of Argentina. The two South American countries have grown increasingly close in recent years to the point of working on a shared currency.
The entrenchment of alliances like these across the Global South is one of the major takeaways from the rising influence of BRICS. Western pundits have argued that the bloc is all talk and no action, but small steps are laying the groundwork for a new version of the global economy. Trade between BRICS countries surged 56 percent between 2017 and 2022, to $422 billion, an upward trend that looks certain to continue.
Naturally, the US looms large behind these developments. South Africa, for example, has walked an incredibly fine line throughout the BRICS summit so as not to anger the US. In a televised national address on the eve of the summit, President Ramaphosa said that South Africa wouldn’t be drawn into a contest between global powers. He then reaffirmed South Africa’s non-aligned position on the Ukraine conflict.
The two countries have been at odds since America’s ambassador to Pretoria, Reuben Brigety, accused South Africa of illegally selling weapons to Russia last year. US lawmakers have raised the possibility of removing South Africa from AGOA, a free trade agreement between the US and several African nations vital to South Africa’s economy.
Despite the rhetoric and threats, American companies, such as Ford, benefit tremendously from the current trade relationship with South Africa. Any real change to this arrangement is unlikely because it would hurt the US economy.
This saga highlights the complicated situation the US finds itself in with the rise of BRICS. Put simply, several countries that depend enormously on the American economy for trade and military support are now deeply cooperating with Russia and China through the bloc, and Washington can’t or won’t do much about it.
Could we imagine the US being openly critical of Saudi Arabia and the UAE over its new membership in BRICS? Not at all. America has failed to take South Africa, a much less powerful country, to task for its questionable ties with Russia. The US has run out of carrots and sticks as BRICS expands and deepens cooperation across the Global South.
From a long-term Chinese perspective, the best course of action is to slowly continue building the infrastructure of a non-aligned global economy through groups like BRICS. Eventually, the trade partnerships and cooperation between these countries will be too entrenched to ignore, and more significant changes to the global order, such as unseating the US dollar as the global reserve currency, will be feasible. China knows this, which is why President Xi Jinping attended the meetings in person.
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