Once seen as edging out US dominance, do BRICS still hold weight?
This year marks a decade since the BRICS — once heralded as the biggest challenge to US global hegemony — first came together in the ashes of the economic crisis. But today, expectations have been tempered. Is the group still relevant?
Last August, two weeks before the ninth annual BRICS summit in Xiamen, China, an amateur video swept through the media showing dozens of Indian and Chinese soldiers throwing punches, kicks and rocks along a hotly contested tri-border region high in the Himalayas.
The brawl was the latest in an escalation of tensions between India and China that had reached a fevered pitch not seen in decades.
Chinese state media had already gone on the offensive, warning its neighbour a countdown to conflict had begun. The magazine India Today ran a blacked-out cover asking, “Will there be war?”
As the crisis deepened, and the annual BRICS summit drew closer, many began to question whether the two countries’ mistrust would undermine the nearly decade-old association.
Branded as a platform to demonstrate the rising influence of the world’s major emerging economies, BRICS — Brazil, Russia, India, China and South Africa — represent 44 percent of the world’s population and has accounted for half of global growth since the group’s foreign ministers first met in 2008.
A decade later, the relationship between members has shifted; China has vaulted ahead, complementing its wealth with an increasingly bold foreign policy. Over the coming decades, India is poised to do the same, leaving the other three countries further behind.
Despite dozens of annual meetings — including, most recently, this week’s meeting of BRICS sherpas in South Africa — internal divisions and the flagging economic performance of its smaller three members have thrown into question the association’s promise to shape a new global order. Does the group once heralded as the future of the global economy still matter?
The rise of BRICS
In 2001, the “BRIC” acronym was dreamed up by then Goldman Sachs chief economist Jim O’Neill to describe the emerging economies of Brazil, Russia, India and China (South Africa was added in 2011). O’Neill turned conventional wisdom on its head when he declared BRIC — united by their large populations, an openness to global trade and, most of all, a potential for massive growth — would overtake leading Western economies within the next 50 years.
Overnight, BRIC became a ubiquitous financial term, sweeping through business schools and sparking BRIC-targeted business strategies as billions of dollars poured into dedicated investment funds. Some scoffed at the irony that a term challenging Western hegemony could be coined by someone in its financial heart; others questioned whether the BRIC label was simply a marketing tool to sell new financial products. As Gillian Tett put it in her origin story , “Even if Brics is self-interested spin, such spin — an idea in itself, really — can sometimes take on a life of its own.”
Though BRIC was engendered in the shadow of 9/11, it was the financial crisis of 2008 that would bring it to life. The global economy was left reeling; for the first time, the United States and its international financial institutions could no longer provide large injections of capital, the most needed global public good at the time.
For the countries within BRIC, it was a watershed moment. With the United States’ inability to cauterize the spread of the economic crisis and the perceived lack of social mobility within the global pecking order, emerging economies began to call for their own parallel structures of global governance.
In 2009, the group held its first formal BRIC summit and quickly laid out an ambitious set of plans: investment banks to rival the World Bank and International Monetary Fund; replacing the supremacy of the US dollar as the global reserve currency; and its own underwater cable system to guard against spying from the US and Europe.
By 2011, South Africa had joined the bloc, an addition that transformed BRIC into BRICS and solidified the group’s broader legitimacy by spanning four continents.
When crisis hit, BRICS showed it could also act as a diplomatic safety net, like when Russia annexed Crimea, or when Brazilian President Michel Temer took over after the impeachment of Dilma Rousseff. In both cases, fellow BRICS countries came out in support of each other despite opposition from Western countries.
Yet within a few years, initial excitement that the group would reshape the world quickly gave way to skepticism. In 2014, a drop in commodity prices pushed the Brazilian and Russian economies into recession. South Africa slipped into stagnation; growth in China cooled. Meanwhile, widespread corruption and the war in Ukraine only made things worse.
By late 2015, Goldman Sachs had fully divested from its $100 billion BRICS investment fund (which had lost 88 percent of its 2010 peak value) and merged it with a larger emerging market fund, in what Bloomberg described as the end of an era.
Balancing BRICS in a multipolar world
Back in the Himalayas, after a 73-day stand-off and less than a week before the 2017 BRICS summit, India and China pulled their troops back from the contested border area. A day later, Indian Prime Minister Narendra Modi confirmed he would attend the summit in the Chinese city of Xiamen.
With India in attendance, China managed to save face and move one step closer to gaining political legitimacy for the Belt Road Initiative with its behemoth neighbour. India, for its part, won a declaration at the summit condemning several individuals it designates as Pakistani terrorists, seen by experts as a Chinese concession after years of cozying up to Pakistan on the Belt Road Initiative. As Chinese President Xi Jinping put it in his opening speech, it’s “…a new type of international relations featuring win-win cooperation.”
How did China and India achieve such an abrupt diplomatic turnaround? The answer, according to Swaran Singh, a professor of diplomacy and disarmament at the Jawaharlal Nehru University in New Delhi, lies in deep vested interests on both sides and, under Chinese direction, the migration of diplomatic negotiation into multilateral forums such as the BRICS summit.
When China and India walk into such an event, there are no expectations to achieve bilateral agreements, said Singh. That allows diplomats from both countries to let their guard down, to mingle on the sidelines and be more open to negotiation.
Further, at a time when the United States has receded from the world stage under the banner of “America First,” Xi has come out in contrast to Donald Trump as the key defender of an open economic system. That has created space to sustain BRICS’ niche, said Singh — a structure where countries can create norms, institutions or ground level initiatives in everything from climate change and terrorism to preparing for the next pandemic. At the same time, BRICS offer members the kind of scheduled diplomatic access many countries dream of.
“Whatever happens to your country…you still get your yearly time with Xi Jinping,” said Oliver Stuenkel, a Sao Paolo-based BRICS expert and author of the book Post-Western World. “That matters, and explains why, contrary to what’s been said, 10 years from now we’ll still have the BRICS grouping.”
Yet not everyone shares Stuenkel and Singh’s confidence in the future of BRICS. Despite the apparent success of last year’s summit, critics point to the rift between India and China as evidence that BRICS is being displaced by greater political allegiances.
Cary Huang, China affairs columnist for the South China Morning Post, wrote after the Xiamen summit that “the BRICS bloc appears to cover two rival alliances with obviously adversarial ideological orientations…Russia and China (with Iran and Pakistan) are aligned on one side. India (along with the US, Japan and Nato countries) is on the other.”
Others point to the huge imbalances that have opened up between BRICS countries. China has an economy bigger than all the other BRICS countries combined, and every six months grows the equivalent of the entire GDP of the group’s smallest member, South Africa.
The multilateral design of BRICS also contributes directly to China’s foreign policy goals. By developing a wider diplomatic smokescreen of international summits and institutions, China looks to reduce the perception that it is the sole challenger to the United States, said Stuenkel.
And while other members of BRICS hold considerable power at a regional level, like the rest of the world, the BRICS countries continue to suffer from a knowledge asymmetry: China knows a lot about the world; the world knows virtually nothing about China.
“I’ve talked to Indian diplomats, Russian diplomats and South African diplomats,” Stuenkel told OpenCanada. “Everyone is increasingly struggling to gain access to people, [to] understand how things work in China [and] why certain measures have been taken.”
A question of demographics
For many Western analysts, the success of BRICS is often tied to the prospect of a post-US world where global order has given way to chaos. Influential realists like John Mearsheimer of the University of Chicago, for example, predict that as the unipolar world slips from American fingers, the US struggle to contain a rising China will lead to a series of regional conflicts.
“In a multipolar order, you clearly have a greater risk of proxy wars or even great power conflicts that need to be actively managed,” agreed Stuenkel, noting that for many, a hegemonic US is still preferable. “You can say, ‘the unipolar order was great, so let’s try to keep it.’ But if you look at the demographics, that’s just not an option.”
Last year, the professional services giant PricewaterhouseCoopers predicted that by 2050 the global economy will more than double, and with it, emerging economies will take an increasingly larger share of the global balance of power.
Yet what is striking in the PwC report is not that O’Neill was off in his original BRICS predictions (Brazil and Russia are poised to rank fifth and sixth amongst the world’s largest economies), but that he failed to include other emerging nations like Vietnam and Bangladesh, which, with India, are expected to lead global growth rates, or Indonesia and Mexico, predicted to overtake the economies of Germany and the UK. At the same time, the US is expected to lose a quarter of its share in the global economy, with the EU forecasted to give up 40 percent of its stake.
That’s a hard pill to swallow for many Western policymakers, who counter that, despite its diminishing share of the global economy, the US is not expected to lose its military supremacy anytime soon.
“The only thing we can hope for is a functioning multipolar order,” said Stuenkel.“The more institutions you have in place, the better chance emerging powers can somehow be accommodated.”