News Update

BRIC, BRICS, Brickbats & Bouquets!

TIOL - COB( WEB) - 883
AUGUST 31, 2023

By Shailendra Kumar, Founder Editor

LET's ride the time-machine and go back to 2009. It all began, interestingly, in now-much-abhorred Moscow. And it was called what was named long back in 2001 as 'BRIC' by the British economist Jim O'Neill who was working with Goldman Sachs at that time. In two years' time the 'BRIC' lodestone attracted 'S' and became 'BRICS'. Then unfolded a low-octane and jejune journey, dotted with developments like the creation of new banks - born to compete with the West-dominated multilateral institutions like the IMF and the World Bank. Brick-by-brick, groups of 'diplomatic brickies' worked together to produce an optical illusion of building a new economic order parallel to the West-dominated one! Since some over-ambitious members of the BRICS kept muddling along, the US-led West camp did not perceive it as a serious challenger to its hegemony. Anyway, many Global South countries which needed inexpensive loans but had thin sliver of hope from the IMF and the WB, approached the BRICS New Development Bank and exited its revolving door with their purses jingling aloud! The bank has, since 2015, sanctioned about USD 33 billion loans for 100 projects in poor and middle-income countries such as Bangladesh, UAE and Egypt.

Aha! Such a perfect storm of good news cannot be bottled! And it parachuted in the power corridors of dozens of Global South countries! Many craved to join the forum but BRICS member-countries had not done the 'brickwork' to stitch formal criteria for the membership! And it became more apparent when the scheduled press meets of the host, South African President, was postponed twice at the summit venue, the commercial capital of South Africa, Johannesburg, where the 15th meeting of the BRICS leaders concluded last week. Some of the vital issues like common currency, peddled by Brazil, were barely discussed. What had gripped the minds of the leaders was the agenda item to admit new members or not, and if yes, on what basis? This is where geopolitics, political ideologies, country-specific ambitions and economic might of BRICS members sprang out in the open, kindling speculative headlines across the world! Lots of behind-the-stage fireworks, pre-planned by some 'pyrotechnicians', took place - particularly to include Iran in the list of the 'chosen six'! A couple of members did cavil but they finally caved in to the majority wish based on each member's bilateral alliances.

As soon as the list of six new members - Saudi Arabia, UAE, Iran, Egypt, Argentina and Ethiopia, was released, the jury from the Western media was also out - China has succeeded in steering the forum towards anti-West bloc! However, it is only half-truth! India, Argentina and South Africa ought to be credited for the pole-dance of a fine balancing act! The West-tilted observations indeed fall a brick short of a load! India backed the new members based on its own long-enriching diplomatic rapports with Saudi Arabia, UAE, Egypt, Iran and also Argentina. In fact, India maintains sustained fealty to all Middle East countries and has thriving bilateral trade with them. India, last year, signed Free Trade Agreement with the UAE. Saudi Arabia is a large investor for the Indian economy besides being a reliable supplier of energy. Saudi Arabia hosts a good swathe of Indian diaspora in the Middle East - about 4.1 lakh and 3.5 lakh in UAE. Egypt is no less important for India as there are Indian investments there and huge imports of commodities to India. Similarly, India has forged close trade and investment ties with Argentina besides Brazil and Chile in Latin America. Ethiopia may not be a large economy but India has an ancient trade relation with it. Iran is no exception a la Indian investment in Chabahar Port and import of energy. South Africa also has close trade ties with all these countries.

However, the Western think-tanks and the media threw brickbats at China which has of late locked horns with the US for geo-economic and geopolitical reasons. China being the second largest economy and a military power, has questioned the US-led global economic and political order. The bilateral tiff has acquired many other facets and has become more intense particularly after the Russian invasion of Ukraine. China declining to lambast Russia and peddling a growing curve of bilateral trade with Putin, the West suspects that China is clandestinely backing up Russia. Having been cornered against a brick wall by America and also EU and other close allies of America, China has been trying to expand its ambit of geopolitical mojo among all such countries which feel being ill-treated by the US sanctions and other punitive measures. A case of tagging easy prey! A good example is the China-brokered Saudi Arabia-Iran agreement to re-establish diplomatic ties and non-escalation of fratricidal war in Yemen. China is also pumping in huge investments in Saudi Arabia in many sectors against the pact for stable export of cheap crude oil. For gas and oil, China has inked a 25-year treaty with Iran whose economy has lost vital economic muscles owing to the West-peddled economic sanctions on nuclear weapon issue. Though the US provides huge funding to Egypt but Russia has much closer ties with it as unlike America, Russia does not question its 'Jack the Ripper' records of human rights abuse!

In terms of geopolitics, one of the stated long-term goals of BRICS is to lurch towards multi-polar world in subtle defiance to the US-led tent. Though India also favours such a political philosophy but also believes in working closely with the West - no antagonism, please! If a particular stand suits India, it does not feel coy about stating it. Similarly, South Africa has a preferential trade pact with the US but works independently on many issues which may appear to be burning its bridges with the US. One such issue is that of its stand on Ukraine. Argentina, albeit caught in the Darwinistic whirlpool for survival - debt-ridden and 100% inflation rate, also believes in not gingering the tail of the US! However, China frets and flinches if a country talks about stabilising diplomatic ties with the US. Its on-going trade and geopolitical skirmishes with the US indicate that it gets unwholesomely exasperated if one talks of not burning the bridges with the West! Vampirish mood of 'Dracula' bureaucracy of China is shared by all those countries which have suffered at the hands of America such as Iran, Egypt and Ethiopia. Though Argentina also has a running tiff over USD 44 bn loan from IMF and is not getting any relief but it is still not against having close ties with the US. China's amped-up efforts would predictably be to rope in all such countries which nourish enmity against the West so that its long-term goal of constructing an alternative or US-plus-one world order is realised! Here, though Saudi Arabia has huge investments in the US and also a security agreement but its reigning prince 'MBS' is more keen to board the boat for a multi-polar world!

How would BRICS evolve in the future if one goes by the latest developments? Will it atrophy in the future like NAM or G77? Is BRICS going to be beneficial for India in the long-run? BRICS, among all other forums like SCO, is more promising platform for the Global South. Since the world is heading to be multi-polar, BRICS will have a critical role to articulate the interests of poor, middle-income and emerging economies. India needs to hold its guns and bide its time. China appears to be a more dominant player today because all bilateral ties are largely anchored by capital supply besides the security paradigm. Since resource-starved countries always look for easy moolah, China is one such good and rich source for them. Such countries do not mind extending their diplomatic support if they get easy access to loans or other benefits. China can afford such opportunistic ties today but certainly not tomorrow! Its growth has gone into reverse and all macro indicators appear to be lurching from one ditch to the next. A crisis of confidence has gripped its fizzling and flickering economy! Its dewy-eyed time is round the corner when it would barely splurge resources for forum-shopping! It will have to scramble for shelter and also card game craze among its citizens! Oops! Its dog days are within sight now! The present global economic downturn is a petri dish for a new trend to emerge in the next seven years when the Indian economy will be the most shining star in the constellation of economies! Let's not sally out for hurried policy measures merely because India has a border conflict with China! Spectacularly ruthless diplomacy is the one where one bides for propitious time to act! Even a little patience goes a long way! Long live BRICS and let there be more 'Bricks' coming from the 'brick-yard' of the Global South!


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