The recent visit by the Brazilian president to the United States points to a lack of unity within the BRICS, which could dent the Kremlin’s aspirations to break its isolation from the West.
President Barack Obama puts his hand on Brazilian President Dilma Rousseff's back as they leave their joint news conference in the East Room of the White House in Washington, Tuesday, June 30, 2015. Photo: AP
In the run-up to the BRICS Summit, which this year will take place in the Russian city of Ufa from July 8-10, Russian experts and members of the media have taken to expressing diametrically opposite views on the future of the BRICS.
Some experts are still taking an optimistic view of the BRICS. For example, in the opinion of the executive director of the National Committee for BRICS Research Georgy Toloraya, the BRICS has become an “alliance of international relations reformers.” He believes that it is not an economic union in the traditional sense of the word, such as the North American Free Trade Agreement (NAFTA) or other free trade zones, and that the economic focus is an artificial appendage.
“It is not an economic union, but an alliance of international relations reformers,” he asserts, stressing that the meeting in Ufa will be a “full-scale summit probing all 25 areas of BRICS cooperation.”
Other Russian experts believe that the BRICS partners have “foiled U.S. plans to blockade Russia.”
Recommended: "BRICS: From 'odd grouping' to political alliance?"
“Russia’s cooperation with the other BRICS countries is developing rapidly, particularly in areas hit by anti-Russian sanctions,” says Russian Institute for Strategic Studies expert Vyacheslav Kholodkov.
He cites as an example the signing of an agreement at the previous BRICS summit in Fortaleza, Brazil, on the establishment of two financial institutions: the New Development Bank (NDB) and the Contingent Reserve Arrangement (a pool of foreign exchange reserves).
“These structures will help Russia to wriggle free and provide a source of external financing, which we will certainly use,” Kholodkov belives. “That way, the BRICS will not allow Russia to be internationally isolated.”
A week before the summit in Ufa, the Standing Committee of the National People’s Congress of China ratified the Fortaleza agreement on the creation of the NDB.
The bank will have an initial authorized capital of $100 billion. The capital to be distributed equally among the BRICS will amount to $50 billion, according to Xinhua News Agency. Russian media believe that the decision marks a bid for political independence by developing countries, including those outside the BRICS, which will no longer have to go hat in hand to the International Monetary Fund (IMF) and the European Bank for Reconstruction and Development (EBRD) to stabilize their finances.
In addition to China, however, the agreement has so far been ratified only by Russia and India, while Brazil and South Africa remain uncommitted.
Is Brazil backing away from the BRICS?
Why such caution? A few days before the opening of the summit in Ufa, Brazilian President Dilma Rousseff paid a state visit to the United States. It should not be considered as a demarche addressed to the country’s BRICS partners, but speaks volumes all the same.
During the visit, Rousseff was at pains to make clear to U.S. President Barack Obama that the tension between the two countries was over. Recall that in 2013 she canceled a scheduled visit to the United States in the wake of press reports about U.S. snooping on her telephone conversations and correspondence. With characteristic bravado, Rousseff delivered a sharp rebuke to the White House.
Her hardliner criticism has since been replaced by extensive attempts to get closer to the U.S. As noted by the Brazilian director of the Moscow-based Ibero-American Institute Vicente Barrientos, Rousseff’s rapprochement with the United States has both economic and political undercurrents.
The United States is second only to China in terms of trade relations and investments in the Brazilian economy. However, another important factor led Rousseff to Washington: She is currently going through the most difficult period of her presidency, having secured a second term last October only by a very narrow margin.
Hanging over her is the Sword of Damocles, more specifically, possible impeachment in connection with the epic scandals engulfing state oil company Petrobras, accused of large-scale corruption. Rousseff’s once high approval rating has plummeted to 9 percent, even lower than that of neighboring Venezuela’s unpopular leader, Nicolas Maduro.
Further still, in December 2014 the U.S. city of Providence filed a suit against Petrobras, in which connection Rousseff herself could be subpoenaed by a U.S. court. Hence, her trip northwards is probably intended to take some of the sting out of the criticism coming her way from the Brazilian Congress and domestic opposition.
Russian media downplays Brazil’s relationship with US
As noted by Russian news agency REGNUM, Dilma Rousseff’s visit to the United States barely warranted a mention in Russian media. Almost nothing was said about the fairly solid package of agreements signed in Washington.
The talk was essentially about resetting bilateral relations after the recent tension. The agenda included the expansion of bilateral trade, including in the military sphere, investment and infrastructure cooperation, the problems of global climate change, and other important topics. Neither did the tense internal situation in Brazil escape attention.
“The BRICS have cracked: Brazil surrenders to the United States” was how REGNUM headlined an opinion piece on Rousseff’s visit to the United States.
Perhaps that assessment is too abrupt. But the very fact of the Brazilian president’s full state visit to the United States, with almost half her cabinet in tow, is telling. It seems that she is no supporter of Russia’s defiant rhetoric about BRICS independence from international lenders, and rejects the artificial anti-Americanism of the union. It is also in the interests of the White House for Brazil not to swap trade relations in the Western hemisphere for the still nascent BRICS.
Having termed Russia a “regional power” in March 2015, Obama at his meeting with Rousseff described Brazil as a “major world power” and the key to Latin America for the United States.
Russia’s long road to a true multipolar world
As noted by distinguished economist and member of the Russian Academy of Economic Sciences Victoria Perskaya, “Russia is overly optimistic if it believes that the BRICS forum is in itself an important structural element towards multipolarity. No G7 member is about to voluntarily surrender its preeminence in the global community.”
According to Perskaya, the BRICS “should not be perceived as an integration union... the BRICS partnership can and will progressively develop only in those sectors and segments that correspond to national priorities and interests.”
Recommended: "Russia needs a Plan B now that the G8 is history"
In this context, Rousseff’s visit to the United States is evidence that Brazil is not at all interested in restricting cooperation with the United States, no matter what role it plays in the BRICS.
China is displaying similar flexibility. Russian journalist and Orientalist Vladimir Skosyrev writes in Nezavisimaya Gazeta that the Greek drama did not prevent the European Union from holding a summit with China in Europe.
Chinese Prime Minister Li Keqiang after talks in Brussels called for the abolishment of tariffs on trade between Europe and China and the conclusion of an agreement on investments.
“Such an agreement,” writes Skosyrev, “would make it easier for China to buy up companies in Europe, and would chime with the geopolitical ambitions of Beijing.” The headline is also striking: “Russia pivots to the East, China to the West.”
Beijing’s desire to move closer to the EU should not be viewed as an obstacle to partner projects within the BRICS framework, the primary aim of which is to counter the trans-Atlantic bridge being built between the United States and Western Europe. However, China is setting an example of a multivector policy in marked contrast to the extreme position occupied by Russia, which has taken offense at the West and is now marching eastwards at full pelt.
Likewise, renowned economist Sergei Aleksashenko doubts that Russia is a priority for China. Rather the opposite: In the long term, Beijing is looking to the West, not at the Kremlin’s slapdash proposals.
“Browsing the papers, it is not difficult to see that China has decided to shift westwards,” says Aleksashenko. “But don’t rejoice just yet. China does not intend to go west along the Trans-Siberian Railway, but via its New Silk Road megaproject, which involves the construction of infrastructure, including roads, railways, pipelines and power grids, in countries that lie to the south of Russia. Because China believes that a good neighbor is a rich neighbor. And any infrastructure will make these economies richer and more stable.”
Aleksashenko cautions that “in 7-8 years’ time China could overtake Russia on its western journey, i.e. towards Europe,” which Russia has “emphatically turned its back on for the sake of the East.” “But if China departs for the West, who will Russia turn to then?” concludes the expert.