July 10, 2022

BRICS+ Circle - A New Platform for South-South Cooperation

B Arjun

THE integration of the Global South has always worried the West. In the 1970s when the poor nations joined hands to demand a New International Economic Order (NIEO), the West got into action to divide the south-south solidarity. A three-way split was engineered – the oil producing third world countries in the middle east were clubbed together as relatively well-off nations and separated from the much larger third-world composed of developing and underdeveloped nations. Similarly, relatively big countries like China, India and a few others were segregated from very poor countries. The three way split in third-world solidarity sounded the death knell for the NIEO demand, paving the way for the spread of Washington Consensusand solidification of US imperialism across the world.  

The Global South is on the rise once again. The emerging economies – Brazil, Russia, India, China and South Africa (BRICS) – are spearheading the effort to bring the developing world together to ensure that the West does not continue to be the sole determinant of the economic and political fortunes of nations across the globe.

Speaking at the virtual BRICS plus summit held in the last week of June, Chinese President Xi Jinping said, "It is important that BRICS countries support each other and reject hegemony, bullying and division,” which the US indulges in with impunity.

The summit brought together 13 other developing countries alongside the five BRICS nations. Algeria, Argentina, Cambodia, Egypt, Ethiopia, Fiji, Indonesia, Iran, Kazakhstan, Senegal, Uzbekistan, Malaysia, and Thailand participated in the online summit. Pakistan that was keen to mark its presence was however not invited due to Indias insistence on keeping it out. Argentina has expressed its desire to become a full member of the BRICS community that represents 42 per cent of the world's population and 24 per cent of the global gross domestic product. At its current stage, BRICS represents 40 per cent of the world population, 25 per cent of the global economy, 18 per cent of world trade, and contributes over 50 per cent for world economic growth.”

The Chinese President Xi Jinping chaired the 14th BRICS Summit. South African President Cyril Ramaphosa, Brazilian President Jair Bolsonaro, Russian President Vladimir Putin and Indian Prime Minister Narendra Modi attended the summit.

China, the current rotating chairman of BRICS has adopted an "outreach strategy" to advance the "BRICS Plus" model that engages more countries in BRICS events and its agenda at both the summit and working level.

Many countries from Southeast Asia, Central Asia, West Asia, Africa and South America are now more keen to conjoin efforts to tackle the after effects of Covid-19 pandemic that severely disrupted the supply chains and the economic downturn resulting from the ongoing Russia-Ukraine war and the hegemonic policies pursued by the United States.

Currently, the force behind the BRICS is shared identification of interests for economic development rather than politics. The participants at the summit made it abundantly clear that the grouping is "not a bloc" that works on geopolitical and economic confrontation. It was emphasised that the idea was not to have a new bloc against another bloc.

The prospects of greater synergy in interaction between the leading developing economies of the world is increasing especially because the developed world is less interested in integrating the global economy and more keen on supporting the rising tide of protectionism. According to economists, "We are at the beginning of a major shock, this time because of a major food crisis. Low- and middle-income countries in Africa and the Middle East will suffer from shortages and rising prices of fertilizers, grains and other substitutes."

One of the root causes of the current round of inflation is the policy of monetary easing initiated by major economies a couple of years ago that  resulted in an excessive money supply in the market. In addition is the American penchant for imposing unilateral sanctions on countries that it dislikes. For example the imposition of sanctions on Russia has caused commodity prices to soar, causing inflation to spike further.

BRICS is opening up new avenues and fostering new alliances. It intends to perform the role of an aggregating platform’ for some of the RTAs (Regional Trade Agreements) and other types of agreements. The BRICS plus initiative seeks to create a new platform for forging regional and bilateral alliances across continents and aims at bringing together the regional integration blocks, in which BRICS economies play a leading role. According to experts, the main regional integration blocks that could form the BRICS+ platform include Mercosur, South African Customs Union (SACU), EEU, SAARC, as well as the China-ASEAN FTA. Altogether, in such a setting 35 countries form the BRICS+ circle.”

For example, India during the previous BRICS summit invited leaders of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) – an RTA formed by India, Bangladesh, Nepal, Myanmar, Thailand, Bhutan, and Sri Lanka to hold a joint summit with the BRICS. India could contemplate that the South Asian regional block within BRICS+ be represented by BIMSTEC.

Besides acting as a platform for trade and investment integration BRICS plus could also find ways to enhance coordination and cooperation in international organisations, including the Bretton Woods institutions to increase the consolidated voting share to more than 15 per cent which would enable the BRICS plus to have a blocking stake with respect to the key decisions of the Fund.”

The reckless imposition of sanctions and locking Russia out of a G7-dominated financial system has accentuated the need for the development of an alternative international reserve currency. The BRICS+ circle could serve as an extensive platform for creation of a payment system that is free of G7 controls. It could also serve as a platform for extending the use of national currencies in mutual trade and investment transactions, thus reducing dependency on the US dollar and the Euro.

Over the years BRICS has evolved as a platform for discussing and deliberating on issues concerning the developing countries. BRICS countries have always been in the vanguard for reform of the multilateral system in order to make it more representative and inclusive.

The strengthening of South-South cooperation can help erect a viable counter-hegemonic force in the world that can curtail the unbridled use of economic and political power by the West. The challenges are enormous: the West is once again employing the divide and rule mechanisms to ensure the white supremacy in global affairs.