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Foreign Policy

What’s Next for the BRICS?

Jul 14 , 2014

When the leaders of the five BRICS (Brazil, Russia, India, China, South Africa) nations meet together for their sixth summit on July 15 in Brazil, they will be faced with fundamental questions about the purpose and utility of the group. Since the first gathering of BRICS leaders in 2009 (South Africa was not then a member and did not participate), meeting together has been its own reward, a tangible symbol of the geo-economic shift purportedly underway from the developed to the developing world.  Now, however, that meme has lost a little of its original luster; growth among the BRICS nations is slowing while growth in the United States, Europe, and Japan is slowly strengthening.  As the BRICS idea has matured, the onus is now on leaders to begin to deliver concrete results consistent with the interests of the individual members while promoting the BRICS as an entity greater than the sum of its parts.  Otherwise, pre-existing contradictions inherent to the BRICS idea—originally a moniker designed as an analytical tool to describe economic potential, not political cooperation—could become increasingly difficult to overcome.  

Some of the BRICS nations are traditional enemies.  Governance varies from democratic to authoritarian and several shades in-between.  And, despite much talk about creating a new world order out from under the weight of the United States and its Western allies, China’s own economic strength, compared to the other four BRICS nations, clearly creates new and potentially uncomfortable asymmetries within the BRICS itself. 

Chinese President Xi Jinping will be in Brazil for the first time since gaining his position just over one year ago, and is looking to build the bilateral relationship while promoting China’s growing presence in Latin America and the Caribbean.  India’s newly-elected Prime Minister, Narendra Modi, is traveling to Brazil for his first multilateral meeting and his first trip to the region, and is looking to build his own bona fides on the world stage.  Russia’s leader, Vladimir Putin, seeks to blunt condemnation of his Crimea annexation and his effort to destabilize and dominate Ukraine.  South Africa’s Jacob Zuma is keen to be seen as part of a bigger club beyond southern Africa.  And Brazil’s leader, Dilma Rousseff, seeks re-election in October and is looking to burnish her reputation as a global leader and convener.  For their own political reasons, each respective leader wants and needs the meeting to be a success.  

One item on the agenda for the meeting in Brazil includes the creation of a BRICS bank to amplify—some would say rival—the work of the World Bank and other existing development banks.  Significant issues including capital allocations, location, leadership, and charter must all be agreed.  At the same time, there is yet no meaningful decision of how the products of a BRICS bank would be superior to those of existing international financial institutions. Thus, it is unclear why non-BRICS developing nations would avail themselves of lending from the new bank.  Most likely, the conditions under which loans were made would have to de-emphasize governance, human rights, environmental, and corruption issues in order to attract the interest of borrowers for reasons beyond the purely politically motivated. 

Much depends on China as it is the largest BRICS economy by far, representing some 70 percent of the BRICS’ GDP.  As a practical matter, bilateral trade between China and other Asian nations dwarfs its trade with the other BRICS.  Therefore, it appears China’s de facto leadership of the BRICS is both inevitable and probably necessary.  And despite the BRICS as an economic entity being only marginally useful for Beijing, the group of nations is an effective tool to promote China’s efforts at democratizing the international system away from a unipolar or G2 world.  

At the same time, China is seeking to downplay the overwhelming economic weight that it enjoys relative to the others in order to forestall any tensions.  There is no particular appetite in Brasilia, Moscow, New Delhi, or Pretoria to substitute Chinese dominance for perceived U.S. and Western dominance of the international system.  When it comes to the question of who establishes and enforces the international rules of the game, these nations want a larger voice, clearly, but it is not yet evident that they are willing to substitute the existing system for one led or even significantly influenced by Beijing, which would entail concomitant direct and indirect costs.  As of now, it is costless to be a member of the BRICS.  But as the grouping of nations institutionalizes it has the potential to become more than a symbolic or theoretical challenge to the system. At that point, its members will have to decide where their ultimate interests lie.  

In the meantime, President Xi and the other BRICS leaders will also meet with the leaders of Latin America and the Caribbean in Brazil on July 16.  The Chinese leader will then travel to Argentina, Venezuela, and Cuba from July 17-23, taking advantage of his visit to Brazil to make state visits to each. 

It is a continuation of China’s active courting of Latin American and Caribbean nations, a region long considered to be a sphere of influence for the United States.  That doesn’t make conflict or even competition between Beijing and Washington inevitable, but it does require that Washington pursue a more active and engaged economic agenda with the region reinforcing mutual interests.  The July 15 BRICS meeting in Brazil and the Chinese President’s onward travel within Latin America only reinforces this reality.  

Eric Farnsworth is Vice President of the Council of the Americas and Americas Society, heading the Washington, D.C., office since 2003.

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