Expansion Of BRICS Gives Semblance And Reflection Of Balancing Act Between China And India

One of the major takeaways from the recently concluded 15th BRICS summit in Johnsonburg is the noteworthy absence of China and Russia's efforts to promote an anti-American and anti-Western rhetoric centered around a single currency. Despite China's long-term strategy to establish such a currency, it was conspicuously absent from the official agenda of the summit, raising questions about its feasibility and logic at the present time.

The topic of de-dollarization was closely monitored during the BRICS summit. While some member nations did express support for conducting transactions in local currencies, Jim O'Neill, a well-regarded economist and former Goldman Sachs executive who coined the term BRIC in 2001, vehemently rejected the notion, labeling it as absurd. According to O'Neill, contemplating the creation of a central bank for this purpose is almost embarrassing, and he predicts that the rivalry between China and India will likely serve as a significant obstacle. O'Neill's hope lies in the event that both powers do not come to an agreement on the creation of a BRICS currency. Should they agree, he believes that the dominance of the US dollar would be considerably more vulnerable. Interestingly, during these discussions, data from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) revealed that the greenback was utilized for a record 46% of foreign exchange payments processed through the system in July 2023, highlighting the enduring global acceptance of the dollar as the predominant currency. SWIFT, founded in 1973 in Brussels, is primarily responsible for establishing standardized processes and protocols for financial transactions.

In the backdrop of China and Russia facing resistance due to US-imposed sanctions, both nations adopted assertive stances to promote the expansion of BRICS. India, however, took the lead in proposing the idea of fostering consensus for admitting six new members to the bloc, with the aim of shaping a more diverse and multipolar global developmental order that is not dominated by a single power.

Jim O'Neill's perspective on the historical trajectory of BRICS is far from optimistic. He views the meetings within the framework of BRICS as primarily symbolic and allegorical, with uncertain outcomes. O'Neill emphasizes that effective diplomacy is rooted in long-term strategic planning and a thorough assessment of the impact on national interests. This is evident from the inclusion of countries like the UAE and Egypt in BRICS, both of which share strategic defense partnerships with the existing members, showcasing the pragmatic considerations that underpin diplomatic decisions.

CHINA FAILS TO CREATE ANTI AMERICA GROUPING AFTER EXPANSION OF BRICS

China's attempt to shape the perception that the newly added BRIC members might collectively adopt an anti-US stance, with the exception of Iran, has not yielded the desired results. The presence of India within this grouping significantly complicates China's aspirations to exercise predominant influence over the decisions made during these summits. Analysts emphasize that China was particularly eager to advance the notion of a BRICS currency, but this proposition encountered resistance from the majority of members who preferred to conduct trade using their respective national currencies.

China's ability to assert itself more assertively would have been amplified had President Vladimir V. Putin of Russia been present at the summit. However, Putin's nonattendance is linked to his status as a subject of a warrant issued by the International Criminal Court for alleged war crimes in Ukraine. Given that this institution is predominantly Western-influenced, South Africa, another BRICS member, refrained from endorsing any deviation from the norm. This is evident from Putin's omission of an anti-US stance in his address to fellow members.

INDIA TREADS CAUTIOUSLY

Prime Minister Narendra Modi underscored the significance of the six new members joining BRICS, highlighting their potential to reinforce the organization and invigorate its pursuits. Experts highlight that among the remaining four new entrants — Iran, Saudi Arabia, Argentina, and the UAE — India maintains cordial relations, making the collective expansion appear coherent and well-received.

Modi asserted that the expansion and modernization of BRICS embodies a broader message for global institutions to adapt to evolving circumstances. He iterated India's consistent support for the expansion of BRICS membership, emphasizing that the addition of new members will not only enhance the organization but also elevate collaborative endeavors.

India firmly believes that broadening the bloc's scope will augment the confidence of numerous nations in the concept of a multipolar world order. Notably, the recent additions of Iran and Saudi Arabia, both with substantial ties to India, are anticipated to harmonize within the group without causing any imbalances. Russia has consistently aligned with India on matters of mutual interest on the global stage.

Originating in September 2006 with Brazil, Russia, India, and China as founding members, the group earned the acronym BRICS after South Africa joined in September 2010. The BRICS bloc collectively represents a remarkable 41% of the world's population, equivalent to 3.7 billion people, contributing 24% of the global GDP and 16% of global trade volume.

Though more than 40 nations expressed keen interest and 23 formally sought membership, only six met the criteria set by the existing members and were successfully granted entry into the bloc.

CHALLENGES

Experts are pointing out various challenges that the expanded BRICS group must navigate. Firstly, there is the task of redefining global governance to establish a multipolar world where the voices of the Global South take a central role on the global agenda. Secondly, it's imperative that the diverse interests of the member nations do not impede their focus on common concerns. It's essential to keep bilateral disputes at bay to maintain collective unity.

Thirdly, BRICS should avoid transforming into an anti-West or overly China-Russia oriented block, as this could risk it becoming an exclusive clique and ultimately a failed endeavor. Fourth, the inclusion of six new nations underscores the group's relevance in the global economic order. Efforts should be concentrated on elevating its role to the next level.

Fifth, while BRICS might consider the idea of introducing its own currency, it's crucial that any such proposal isn't directed against the West or the US. The viability of this notion hinges on a consensus and must remain logically relevant.

Sixth, it's pivotal for the founding members to respect the unique identities and contributions of the new Middle East and North Africa (MENA) members, which add diversity to BRICS.

Seventh, India stands to leverage its position within BRICS to advocate for the interests of developing nations, thereby enhancing its international prestige.

Lastly, the issue of cross-border terrorism looms large for India. BRIC could serve as a platform to garner support on this matter, even compelling China to align its stance accordingly.

CHINA-RUSSIA MAKES DEADLY COMBINATION

The inclusion of Iran and Saudi Arabia in BRICS is being attributed to the assertive efforts of the China-Russia alliance, with intentions that appear to lean towards forming a counterbalance against the US and Western influence. China played a pivotal role in mediating discussions between Iran and Saudi Arabia, a development that was met with disapproval from the United States. Amid the ongoing Ukraine conflict, Russia's position has become more reliant on China, creating instances where certain actions send ambiguous signals to both India and the US, as exemplified by initiatives like the Quad, G7, and AUKUS.

Notably, Saudi Arabia, the largest exporter of crude oil, now finds itself within the same bloc as China, the world's leading oil importer. Additionally, this alignment creates a scenario where Russia and Saudi Arabia, both members of OPEC, a key consortium of oil-producing nations, form a new economic alliance. The potential coordination of oil output between these nations could potentially strain Saudi Arabia's relationship with the United States.

CHINA’S HEGEMONY

China has expressed criticism toward various groups formed by the United States to counteract its rising influence. Given that several members of BRIC maintain trade relations with China, the issue of managing trade imbalances will be of utmost importance to them, a factor that reinforces China's position. The presence of India within BRICS serves as a check on China's aspirations for hegemony within the group and provides an opportunity for the leaders of both nations to engage in discussions on bilateral matters during the summit.

During a conversation between Chinese President Xi and PM Modi, the two leaders addressed concerns regarding the India-China border and stressed the urgent need for peace restoration and normalization, recognizing the mutual benefit of such efforts. PM Modi underscored the significance of maintaining peace and stability along the border, emphasizing mutual respect as a crucial foundation for Indo-China relations.

During the BRICS expansion session, United Nations Secretary-General Antonio Guterres made a poignant observation, noting that the current global governance structures are reflective of the past, and that true universality of multilateral institutions can only be achieved through reform.

Analysts suggest that the newly expanded dimension of BRICS nations must collectively refocus on the original concept envisioned by Jim O'Neill, the economist who coined the term BRICS. O'Neill emphasized promoting trade and development across the region, a principle that these nations should prioritize.

(Writer is political analyst and senior journalist having six-year experience of foreign posting in a neighboring country)

Published on: Tuesday, August 29, 2023, 05:12 PM IST