FRANCOIS FOUCHE: Brics-à-brac
Picking through the disparate agendas of its 11 members, it’s hard to discern the point of an expanded Brics bloc. A lack of common ground may well stand in the way of achievement
Those who have followed the story from the start would have spotted the irony in the proposed expansion of Brics, from five nations to 11, as announced at the group’s meeting in South Africa.
The “S” for South Africa was added to Brazil, Russia, India and China only in 2010. That expansion, like the one touted in Sandton in August, was a typical Brics move: haphazard, opportunistic and at least partly logical.
South Africa joined Brics on an invitation driven by China. This was a boon for then president Jacob Zuma, who was eager to pivot away from the West. For China it meant additional clout in Africa, via a stronger partnership with a regional powerhouse.
Where did that leave the club of five? Nobody really knew. All parties agreed that we’d be better off in a more multipolar world, less dominated by the US. For Brazil, Russia, India and South Africa, privileged access to the behemoth Chinese economy was a drawcard. Russia also saw membership as an additional defence against pariah status.
If we’re honest, South Africa’s membership was anomalous. There are no major geopolitical markers that suggest South Africa should be in a club with the likes of China and Russia. And it is not as if membership is risk-free. If participation in Brics alienates other important trading partners, we South Africans will have shot ourselves in the foot. We saw this recently, with the US seriously reconsidering our preferred trade status under the African Growth & Opportunity Act, or Agoa.
The announcement that six more countries have been invited to join Brics was not short of anomalies of its own. Invitations have gone to Saudi Arabia, the United Arab Emirates, Iran, Egypt, Ethiopia and Argentina. If all of them accept, the club will expand to 11 members on January 1.
If you’re tempted to ask why, you are not alone.
Can the bloc’s members tout any achievements they would like to replicate or expand? Not really. They will point to the establishment of the New Development Bank (NDB). Launched in 2016 in Shanghai, this was designed to be an alternative to the World Bank. It is intended to provide finance faster than the World Bank and to do so more fairly.
Some benefits have materialised. The NDB recently issued its first bond in South African rands, for example. This is an opportunity we can leverage for infrastructure development. However, the institution has just one-tenth the assets of the World Bank. And so far, it has proven less transparent and accountable than other multilateral development banks.
Proponents may also point to the contingency reserve arrangement between Brics central banks. This creates a facility enabling member banks to exchange local currency for hard currency in the event of a balance of payments crisis. It is yet to be used.
In short, only modest successes have been achieved, and these could have been done independent of a global bloc and associated bureaucracy.
One thing an expanded Brics will not do is advance democracy
What common interests?
Could the reason for the expansion be the advancement of common interests? This is certainly how alliances used to emerge — but not so with Brics.
Keep in mind that the original Bric grouping was a marketing tool. It was conjured up in 2001 by an investment banker — a Goldman Sachs economist adding colour to a report on attracting investment into these fast-growing developing nations.
China is all for growing membership as it increasingly challenges the US for geopolitical dominance. Russia sees a larger Brics as a defence against the US. Brazil and India are less keen on the growth of the group. They aren’t especially excited about a more dominant China or about alienation from the US.
The Brics members with the largest populations, China and India, don’t get along. They have a long-running border dispute. In 2020, 24 soldiers were killed in a related skirmish. And don’t forget about their month-long war in the early 1960s.
One thing an expanded Brics will not do is advance democracy. Among the invitees, only Argentina is a genuine democracy.
So, on the pillars that usually bind nations in successful pacts — things such as ideology, culture, defence and location — it is hard to find common ground among the current or proposed Brics nations.
A bigger Brics would certainly be economically seismic and provide the clout that would be needed for a new currency to work. But economic muscle is effective only if it is honed and targeted. That has been hard to achieve in the current grouping. Adding six new, diverse voting members will make it harder.
* The Centre for African Management & Markets at the Gordon Institute of Business Science conducts academic and practitioner research and provides strategic insight on African markets. Fouche is an economist and research fellow at the centre
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