26 August 2023 / https://www.middleeasteye.net/
With the addition of six new countries – and possibly more to come – the Brics bloc is increasingly disrupting western hegemony
The 15th Brics summit has just concluded, with Brazil, Russia, India, China and South Africa issuing a declaration on a potential new global order, including “greater representation of emerging markets and developing countries in international organisations and multilateral fora in which they play an important role”.
Alongside this statement came the largest expansion of Brics since its inception: as of next January, six additional countries will join, including Argentina; Egypt; Ethiopia; Iran; Saudi Arabia; and the United Arab Emirates.
Brics now represents close to half of the global population and nearly half of the world’s oil production as well. It is fast outstripping its alter ego, the G7, comprised of Canada; France; Germany; Italy; Japan; the United Kingdom; and the United States.
With the latest expansion, Brics now includes three military nuclear powers (Russia, China and India); three top Middle Eastern energy producers (Saudi Arabia, Iran and the UAE); important African and Arab countries in strategic locations (Ethiopia and Egypt); and Argentina, a historically important Latin American state.
The next enlargement could include such countries as Algeria; Indonesia; Kazakhstan; Nigeria; Pakistan; Turkey; or Vietnam. This could mean even bigger power in terms of energy, population, GDP growth, military nuclear capabilities, status and strategic geographical positioning.
It is not yet known whether Brics will assume a new name in accordance with its enlarged format. For now, let’s call it the G11, to distinguish it from the G7.
With further enlargements, the G11 could soon resemble a G20 without western countries. The original G20, where the Global West and parts of the Global Rest have mingled for decades, could become irrelevant.
The Global West and its mainstream media have been dismissive towards Brics, focusing on its shortcomings and internal tensions. At best, they considered it an uncoordinated, weak and fragile economic club. At worst, an unrealistic and heterogeneous group of countries committed to launching an inept alternative global governance system. In other words, they viewed it as a clumsy and naive attempt to move from the US-led rules-based world order to an undefined and unpredictable multilateral one.
To a certain extent, such judgements have merit. Brics – and now the G11 – cannot boast the solid mechanisms of interaction, consultation and action that have long been the Global West’s prerogative via the G7, Nato, the EU, Aukus – and other forums.
Brics, after all, arrived late in the “global governance business”, which was for decades a western prerogative, conceived of and led by the US. Yet such summary judgments further confirm how dangerously dissociated from reality the Global West’s members continue to be.
Current and potential future members of the Brics/G11 bloc will all be united by the common aim of disrupting the US dollar’s dominance
If Washington and its main allies had not squandered the extraordinary victory achieved with the end of the Cold War and the dissolution of the Soviet Union, and had not abused their positions, Brics would likely never have been born.
After all, in the last three decades, the Global West has inflicted upon humankind long wars that contravened international law, unilateral sanctions, a weaponised dollar, hypocritical macroeconomic adjustment plans, and overzealous “green transition” rules applied with a glaring double standard (the latest example being Japan, which to the deafening silence of its G7 partners, has started pouring into the Pacific Ocean 1.3 million metric tonnes of radioactive water from the Fukushima nuclear plant).
The rise of Brics reflects a growing unease in large parts of the Global Rest with the Global West’s policies over the last few decades. Its enlargement is evidence that this reaction is reaching a critical mass. What is surprising is not the fact that the Global Rest is having this reaction, but rather that it took so long to manifest.
It would be a mistake to interpret this trend as blind anti-western drive, fuelled by old grievances over past colonial policies or unilateral moves during Washington’s unipolar moment. The Global West is falsely promoting the notion that the world system has reached an epic inflection point characterised by a confrontation between democracies and autocracies, based on the die-hard “either with us or against us” logic. The leaders of the Global West today appear incapable of conceiving global politics in a framework beyond the binary Cold War mindset.
While China and Russia remain the top two players within Brics, India’s role is increasing. But neither Beijing nor Moscow hold a hegemonic position within the group akin to the role of the US within the main articulations of the Global West. Brics, and now the G11, prefer to operate through consensus, which has its own adverse effects.
Shifting trade dynamics
The G11’s military dimension is embryonic, to say the least. But this should not imply that the increasing coordination of its members does not constitute a threat. They seem committed to de-dollarisation and the launch of a financial system outside of New York and London clearinghouses and US Treasury rules. In due course, this could weaken American global power, widely rooted in the US dollar as the global reserve currency.
Russia is already out of western financial circuits. China is doing its best to follow. It is premature to talk about a G11 currency, but the founders’ five currencies could play an increased role in bilateral trade among members.
Saudi Arabia, the UAE and China are increasingly divesting from US debt by selling US Treasury bonds. One of the cornerstones of the global energy trade and of US financial power, the petrodollar, is creaking. Russia is asking for rubles pegged to gold for its oil, while China is pushing to pay for its energy supplies from the Gulf in renminbi.
If within Opec+, where Saudi Arabia and Russia determine global oil output quotas and therefore its price, the transition continues from the petrodollar to alternative currencies, then the implications for the dollar’s status could be massive. There is the potential risk of a bandwagon effect. This trend could even extend to green energy, since the related raw materials and manufacturing capabilities are likewise significantly located among G11 members.
Brics and its new members have reached a delicate crossroads of energy trading and payment systems, which in due course could usher in a Bretton Woods III, reshaping global energy and financial politics. Current and potential future members of the Brics/G11 bloc will all be united by the common aim of disrupting the US dollar’s dominance. The implications could be huge, especially if ad hoc arrangements for trading in local currencies lead to the creation of specific regional trading blocs.
To be sure, the US dollar will not lose its status overnight, but Washington should pay attention to these developments. And going forward, it should be more cautious about weaponising its currency, as it has done compulsively for decades.
The recent freezing of Russian (and Venezuelan) hard currency reserves held in western banks may soon turn out to be one of the biggest mistakes of the 21st century. From the perspective of the Global Rest, the unequivocal message of such moves is akin to the one received by an ordinary citizen who goes to his local bank branch, only to have his savings withdrawal request rejected.
There is a new world out there. The green note is losing much of its attractiveness. At the same time, its master no longer inspires fear or respect.
The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Eye.
Marco Carnelos is a former Italian diplomat. He has been assigned to Somalia, Australia and the United Nations. He served in the foreign policy staff of three Italian prime ministers between 1995 and 2011. More recently he has been Middle East peace process coordinator special envoy for Syria for the Italian government and, until November 2017, Italy’s ambassador to Iraq.