Russia is hoping that the BRICS can become a counterweight to the influence of the West, both economically and politically. This year’s summit in Brazil could become a test of that strategy.
Foreign Ministers of the BRICS countries (left-right): Russia's Sergey Lavrov, India's Salman Khurshid (former minister), China's Wang Yi, South Africa's Maite Nkoana-Mashabane and Brazilia's Alberto Figueiredo at the Nuclear Security Summit in the Hague in March. Photo: RIA Novosti
The 2014 BRICS Summit in Fortaleza, Brazil might become a turning point in global affairs. Most notably, the international situation has drastically changed since the Durban summit in March 2013: the Snowden affair, the end of the “Arab spring” in Egypt, Syria, Iraq… And, of course, Ukraine.
The current standoff between Russia and the West, as well as growing U.S.-China tension, signify the start of a new geopolitical era. As a result, the BRICS are widely expected to demonstrate their role as an alternative center of power, a bearer of the banner of a more just international political and economic order, based on fair rules of the game.
Just one question remains: Are the BRICS ready to answer these expectations? Global tensions could cast a shadow on the summit and might even lead to a wider range of opinions on the pressing international issues facing the BRICS leaders.
Most probably, the issue of Crimea and its accession to Russia, which is not something clearly defined as a legitimate action according to international law, will hardly be discussed in detail. The BRICS have worked out a way of avoiding topics inconvenient to some of their members.
However, the discussion of the Ukraine situation cannot be avoided, as the BRICS state their adherence to the basic principles of international relations. Russia will expect denunciation of the politics of sanctions used by the West a new weapon against its global opponents.
However, as the Russia-China link grows stronger as an answer to the Western pressure, that may cause questions among other members, who do not want to see the BRICS becoming dominated by Beijing (and the decision to house the new development bank in Shanghai would add fuel to such concerns).
The BRICS also demonstrate their desire for “outreach” – such as the establishment of dialogue and cooperation with regional powers. The BRICS help to incorporate their development plans into the overall strategy of the BRICS and create the diplomatic network for addressing problems.
As more and more countries wish to join BRICS, it is also important to create a system of BRICS partners for dialogue and observers. Russia has clearly stated that before enlargement BRICS should put its house in order. However, the prospect of establishment of closer ties with aspiring countries and probable future members, such as Argentina, is of strategic importance.
What are the main achievements of the bloc to date? Above all it, has positioned itself as a multi-civilizational union, which gives it additional legitimacy to determine the future paths of mankind’s development. Over the last six years, two-dozen multilateral tracks have been created in addition to Summit meetings. Last year, the Business Council and BRICS Think Tank Council were inaugurated.
Critics say BRICS economic growth has slowed down and economic integration boosting their economies is insufficient. However, during the last ten years, the GDP of the “big five” increased more than fourfold, and now it stands at 21 percent of global output. The trade between BRICS countries grows faster that the pace of global trade, increasing over the last 5 years almost two times to reach $300 billion.
New intra-BRICS projects are discussed, like the Russia-India project on the extension of a $30 billion gas pipeline Moscow plans to build to China until the Indian border – which so far is the most ambitious project linking the three biggest countries. Also, Russia suggested the creation of an energy association of BRICS along with a reserve stock of fuel and an Institute of Energy Policy.
The theme chosen for discussions at the summit is rather trivial: “Inclusive growth: sustainable solutions.” It, however, reflects the dissatisfaction of the biggest emerging economies of the current socio-economic development model, and the fact that the existing world economic growth model appears to be malfunctioning.
Seen from that point of view, the Contingent Reserve Arrangement (CRA) and establishment of a BRICS Bank, both expected during the Summit, could be a highly symbolic step. In the more harmonious world of 2011, when the suggestions of their creation were first floated, the idea of financial structures independent from the West-dominated financial system seemed exotic and irrelevant.
These days, some commentators see these institutions as alternatives both to the IMF and the World Bank, which is clearly an overstatement. It is true, however, that in the volatile financial situation the world finds itself now, it is important for the big emerging economies to be able to turn to an independent organization able to provide liquidity in the case of capital outflow – and provide it “in U.S. dollars, as a mini-IMF” – as Russian Finance Minister Anton Siluanov has mentioned.
The unpretentiously named New Development Bank is an even more promising and strategically significant undertaking. In the first years, its paid-in capital would not exceed $10 billion, with equality of quotas (a long-time discussion result, symbolizing the preference of equality over a possible wider scope of the investment).
The bank might not only be an alternative source of investment for the infrastructure projects needed for developing countries that the West-dominated financial institutions are reluctant to support. It also has a more important long-term mission – becoming the first intra-BRICS multilateral institution that could gather and analyze economic information, judge economic policy and prospects of the developing countries.
Thus, it should function as a nucleus of a coordination mechanism for their economic development strategies. This is an important contribution to the eventual institutionalization of the BRICS, which is imminent if the BRICS are to fully carry their geopolitical and geo-economic responsibility.
For Russia, this summit is especially important – it should become a demonstration that U.S. claims of “isolating” Russia in the wake of Ukrainian events are far from reality. Russian mass media has already stated that Putin’s trip to Latin America – which Washington still sees as its backyard – is a snub to the U.S.
The BRICS have acquired a new strategic dimension in Russian long-term strategy due to the sudden realization of the Russian political class and the general public that the U.S. still views - and will continue to view - Russia as an opponent rather than partner.
BRICS is now seen as a geopolitical alternative for Russia in the 21st century, a possibility for Russia to increase its role in global affairs after a 30-year decline and become a core member of the group of nations determining the new world order. It is not Russia’s choice that it was denied that role by the West, which chose instead to view Russia as the “loser” of the Cold War.
The opinion of the author may not necessarily reflect the position of Russia Direct or its staff.