Monday, April 10, 2023


A new world order? BRICS nations offer alternative to West

Astrid Prange
DW

Predictions about the BRICS countries as the fastest growing economies haven't quite panned out. Instead, the alliance is now offering a diplomatic forum and development financing, outside of the Western mainstream.

The acronym began as a somewhat optimistic term to describe what were the world's fastest-growing economies at the time. But now the BRICS nations — Brazil, Russia, India, China, South Africa — are setting themselves up as an alternative to existing international financial and political forums.

"The founding myth of the emerging economies has faded," confirmed Günther Maihold, deputy director of the German Institute for International and Security Affairs, or SWP. "The BRICS countries are experiencing their geopolitical moment."


Brazil, Russia, India, China and South Africa are trying to position themselves as representatives of the Global South, providing "an alternative model to the G7."

The G7 is an "informal forum" of heads of state of the world's most advanced economies, founded in 1975. Germany, France, the United Kingdom, Italy, Japan, Canada and the US are members, as is the EU.

 
Economic growth in China has outpaced that of other BRICS nations
Hector Raramal/AFP

The acronym BRIC, which initially stood for Brazil, Russia, India and China, was coined by Jim O'Neill in 2001 when he was chief economist of the multinational investment bank, Goldman Sachs. At the time, the four countries had sustained rates of high economic growth and the BRIC label stood for economic optimism about the future of those nations. Opponents of the label said the countries were too diverse to be grouped together like this and that it was really just a Goldman Sachs marketing ploy.

But what may have started as a marketing ploy to encourage investors has grown into a platform for intergovernmental cooperation similar to the G7. In 2009, the four nations met for their first summit in Russia's Yekaterinburg. In 2010, South Africa was invited to join the group, adding the "S" to BRICS.
Challenging the World Bank model

In 2014, with $50 billion (around €46 billion) in seed money, the BRICS nations launched the New Development Bank as an alternative to the World Bank and the International Monetary Fund. In addition, they created a liquidity mechanism called the Contingent Reserve Arrangement to support members struggling with payments.

These offers were not only attractive to the BRICS nations themselves, but also to many other developing and emerging economies that had had painful experiences with the IMF's structural adjustment programs and austerity measures. This is why many countries said they might be interested in joining the BRICS group.

The headquarters of the BRICS-founded New Development Bank is in Shanghai
Wang Gang/Costfoto/picture alliance

The BRICS bank is open to new members. In 2021, Egypt, the United Arab Emirates, Uruguay and Bangladesh took up shares. However, these were much lower than the respective $10 billion investments made by the bank's founding members.
Set to expand

South African Foreign Minister Naledi Pandor has said worldwide interest in the BRICS group was "huge." In early March, she told television interviewers that she had 12 letters from interested countries on her desk.

"Saudi Arabia is one," she said. "United Arab Emirates, Egypt, Algeria, and Argentina," as well as Mexico and Nigeria.

"Once we've shaped the criteria [for lending], we will then make the decision," she said, noting that the topic would be placed on the agenda for the upcoming August summit in South Africa.

The most recent economic developments in BRICS member states have little to do with the initial myths upon which the group was founded. Of the five members, only China has achieved sustained and extensive growth since then.

As China's gross domestic product grew from $6 trillion in 2010 to nearly $18 trillion in 2021, the economies in Brazil, South Africa and Russia stagnated. India's GDP grew from $1.7 trillion to $3.1 trillion, but was outpaced by China's growth.

No sanctions against Russia

Since the start of the Russian war in Ukraine, the BRICS countries have only distanced themselves further from the so-called West. Neither India, Brazil, South Africa or China are taking part in sanctions against Russia. This has become increasingly clear with near-historic levels of trade between India and Russia, or in Brazil's dependence on Russian fertilizer.

"Diplomatically, the war in Ukraine appears to have drawn a stark dividing line between an eastern-backed Russia and the West," political scientist Matthew Bishop from the University of Sheffield wrote for the Economics Observatory late last year. "Consequently, some European and US policymakers worry that the BRICS may become less an economic club of rising powers seeking to influence global growth and development, and more a political one defined by their authoritarian nationalism."

VIDEO: Ukraine: Are new alliances dividing the world?  26:06

Maihold of the German Institute for International and Security Affairs agrees. He said the BRICS alliance is not so much a counter to the West but more a forum for increased sovereign and autonomous thought. In a bipolar world, he believes South Africa, India and Brazil are simply "vying for better terms."

China, on the other hand, is using the platform for its global political ambitions, Maihold added, pointing to Beijing's offers to mediate the war in Ukraine and the joint military exercises it held with Russia in South Africa.

Maihold believes the West has noticed this change in tack and is trying to counteract it. "They are looking very closely," he said. "At the G7 summit in Germany in 2022, they made a point of inviting South Africa and India, in order to prevent the optics that the G7 was standing against BRICS."

This article was translated from German.

Ukraine conflict on Lula's agenda in delayed China visit


Ramon SAHMKOW
Mon, April 10, 2023


Brazil's leftist President Luiz Inacio Lula da Silva will meet Chinese counterpart Xi Jinping in Beijing this week to discuss trade and Ukraine mediation, having overcome the pneumonia that forced him to postpone the trip.

Lula, 77, also hopes to reclaim Brazil's role on the geopolitical stage following a period of isolation under his far-right predecessor, Jair Bolsonaro.

Expected to arrive in China on Tuesday, Lula, who was originally due to visit the Asian powerhouse from March 25-30, will meet Xi on Friday.

They "will talk about the war in Ukraine," Foreign Minister Mauro Vieira told reporters, with Lula hoping to promote his proposal for mediated talks to end Russia's invasion of the country.

By the time Lula returns home, a group of mediator countries will have been "created," said Vieira.

Lula, who has been president of Brazil twice before, is keen to position the South American giant as a go-between, as he did in his second term, which ended in 2010, during nuclear discussions between Iran and the United States.

However, his diplomatic stock took a hit last year when he came under fire for claiming that Ukrainian President Volodymyr Zelensky was "as responsible" for the war as his Russian counterpart, Vladimir Putin.

He has also refused to join Western nations in sending weapons to Ukraine to help in its defense.

And on Thursday, while Lula said that "Putin cannot keep Ukrainian territory," he qualified that statement by insisting that Zelensky "cannot want everything."

He also suggested that Kyiv renounce its claim to Crimea, annexed by Moscow in 2014 -- words that did not endear Lula to authorities in Ukraine.

"There is no legal, political or moral reason why Ukraine should give up even a centimeter of its land," Foreign Ministry spokesman Oleg Nikolenko said on Twitter.

"Any mediation efforts to restore peace must be based on respect for the sovereignty and full restoration of Ukraine's territorial integrity in accordance with the UN Charter," he said.

- 'Exaggeration' -


China, for its part, has proposed a 12-step resolution to the conflict, based on a ceasefire and dialogue, a plan Xi discussed with Putin during a visit to Moscow last month.

"Those are basic conditions" for peace, said Vieira, judging Beijing's proposal as "very positive."

Ukraine's Western allies have heavily criticized Xi's approach as tacitly supporting Moscow's invasion.

In a joint statement with French president Emmanuel Macron, who was visiting Beijing, Xi pledged on Friday "to support any effort in favor of a return to peace in Ukraine."

But Moscow has rejected any "political solution" to the conflict.

And after Lula's chief adviser Celso Amorim met Putin in Russia last month, the Brazilian diplomat told CNN it would be an "exaggeration" to say that the doors were open for a negotiated peace.

- Trade no longer tops agenda -


Just over three months into his third term as president, Lula is making his third major foreign trip, having previously visited Argentina and the United States.

China is Brazil's largest trading partner and key to Lula's ambitions to re-establish the South American giant on the global geopolitical stage.

Officials in Beijing also see Brazil -- a leader in the global south -- as a linchpin in their strategic and economic plans.

Lula's original trip was due to put trade at its core, an important topic even if the focus has shifted.

Last week, ahead of his arrival, China hosted a forum for 500 Brazilian and Chinese business people that resulted in the signing of more than 20 cooperation agreements.

One of those was to allow business transactions between the two countries to be carried out in reais and yuan rather than US dollars.

Bilateral trade between the two countries reached a record of more than $150 billion in 2022.

Brazil was also the main destination for Chinese investment in Latin America from 2007 to 2020, worth $70 billion according to the Brazil-China Business Council.

But this trip will be primarily political.

From Beijing, Lula will travel to Shanghai, where his domestic political ally Dilma Rousseff, who succeeded him as president in 2011, recently took over as head of the New Development Bank, also known as the BRICS bank.

During Lula's last two terms, from 2003-10, Brazil joined Russia, India, China and South Africa in creating the BRICS group of emerging economies.

On his way home, Lula will visit the United Arab Emirates.

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