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BRICS (Not to) Become an Anti-Western Platform

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Photo: Will the BRICS become the prototype for a future 'anti-Western' bloc. Source: Collage The Gaze.
Photo: Will the BRICS become the prototype for a future 'anti-Western' bloc. Source: Collage The Gaze.

The formation of a bloc of 11 leading countries of the Global South could be a real challenge for the modern geopolitics of Western democracies. Back in the summer, Bloomberg wrote an article that raised an important question: "Will the BRICS become the prototype for a future 'anti-Western' bloc?" It is a bold thesis, but it is not too far-fetched. 

Two members of the bloc are already, in fact, to some extent either opponents (Russia) or rivals (China) of the West. Iran, a country that has been under sanctions from the West for decades, has now joined the BRICS.

Brazil is traditionally a "leftist" country, although it has the status of a "non-NATO ally of the United States," a title given by Trump in exchange for the Brazilians' promise to buy American weapons. This status should not mislead us, as a candidate for this status is, for example, CSTO member Armenia. Or pro-China Pakistan. 

The United States and Brazil have traditionally been considered partners as the two largest countries on the two American continents. America was the first to recognize Brazil's independence from Portugal in 1822. The United States accounts for a fifth of Brazil's trade. But suddenly the notorious Green Deal intervened in this idyll. If earlier wars were fought over gold, coal, and oil, now they are fought over climate resources. 

In the case of Brazil, this thesis is being transformed into "taking control of the Amazon forests." In early 2023, Bloomberg reported that the Biden administration had allocated $500 million to the Amazon Fund, which protects rainforests and fights deforestation. 

This is many times more than previously allocated, and each time such grants have angered Brazilian political elites. It is worth noting here that the fight to preserve the Amazon forests is more than just about ecology. This is politics, including domestic politics. That is, $500 million will be used to create numerous grant-funded NGOs in Brazil that are opposed to the government. 

Official Brazil wants to industrialize and get rich. And the United States wants to live in a world with a relatively suitable environment. These countries are simply at different stages of development according to the Rostow model: Brazil is a consumer society, and the United States is in the final stage of searching for standards of living and new values. 

In addition, the basic industrial policy of the United States is now reshoring, i.e. bringing the largest companies back to their home country. America no longer wants to share jobs with the developing world. 

That is why Brazilian President Luiz Inácio Lula da Silva met with Chinese President Xi Jinping this year. And Brazilian Finance Minister Fernando Haddad, while expressing his condolences over the withdrawal of US companies from his country, also noted that cooperation with China opens up opportunities for Brazil to attract direct investment from China. And the basic vector of Brazil's development is reindustrialization. 

Another member of the bloc is South Africa. Since 2010, the United States has been conducting an in-depth strategic dialog with this country. For example, South Africa can supply the United States with its goods under the preferential customs regime under the African Economic Growth Program (implemented by the Americans). 

In addition, South Africa is a member of the Southern African Customs Union, with which the United States has signed a trade, investment, and development agreement. This trade union (one of the oldest in the world, founded in 1910) includes the main countries of Southern Africa: South Africa, Botswana, Lesotho, Swaziland, and Namibia. 

Among other things, South Africa and the United States have signed a bilateral agreement on the elimination of double taxation. In general, the legal framework and economic interests should push South Africa toward the United States, especially given the commodity exports from the Southern African Trade Union: diamonds, gold, nickel, fish, platinum, wine, tobacco, and sugar. 

Difficult Reflections

Nations sometimes act irrationally when it comes to deep social complexes. It should be understood here that the phantom pain of apartheid is not a reflection against the once ruling Boers, but a larger mental "abscess" against whites in a broad sense and the West in a more specific sense. 

The key member of BRICS, on which its positioning depends, is India. This is the country that can pick up the baton of high development dynamics from China (which is increasingly relying on the domestic market) and become a new driver of global economic growth. The nature of global economic growth is complex. Developed countries are characterized by high levels of consumption, sustainable growth, and the generation of innovations that shape the technological order. On the other hand, their growth dynamics are within small but stable values (1-2%). 

On the other hand, developed countries are aging demographic systems with sluggish population growth dynamics, mainly with the help of migrants or the integration of new countries (as in the EU). 

By and large, the developed world has largely solved the problem of outpacing infrastructure development.

And what do young economic giants like China and India offer the world? They have a large population (1.4 and 1.3 billion people, respectively) and thus the greatest GDP growth potential in the world, if we consider human capital as a key factor of growth in the 21st century. 

Reaching the standards of living of the EU or the US in the context of the demographic matrix of these two countries provides the largest margin for global GDP expansion in the coming decades. Of course, we are leaving out such an important nuance as the possibility of transforming these countries from developing to developed ones, given the limited natural resources. 

The dialectic of catching up with developed countries suggests that the distance between their economic indicators can only be closed if growth accelerates to more than 5%. 

At the moment, China's GDP has reached $17 trillion with a population of 1.4 billion and a per capita GDP of more than $10 thousand per year. This is a kind of turning point in development. 

On the other hand, analysts predict India will grow by 6-6.5%, while the world of developed economies will be in a "sideways trend." 

Prime Minister Narendra Modi has formulated a new "trimurti" ("three faces" - a triad that unites the three main deities of the Hindu pantheon (Brahma the Creator, Vishnu the Preserver and Shiva the Destroyer) into a single whole - ed: 

  1. a model of tax cuts; 
  2. stimulating exports by adopting the Chinese experience; 
  3. implementing large infrastructure and mega-regional projects. 

In this context, India will either become the largest development project in the West in the 21st century (and most likely the last). Or it will try to become one of the axial countries of the Global South. 

In the first option, India is offered a free trade zone with the EU, trillions in investment, technology, and an alternative to China's Silk Road - the Spice Route. 

On this path, India will be constrained by ideological incompatibility with the West, plus the historical memory of the colonial past. 

Yes, India is the largest democracy in the world, but it is not a liberal country in terms of economic development. India will not cooperate with the IMF. 

In addition, India has a positive experience of cooperation with the USSR, which it mistakenly extrapolates to Russia. 

On the other hand, India already got burned in 1962 during the Indo-China border war when it believed Mao's concept of two countries (China and India) as "two mountains" standing next to each other. 

More recently, in 2020, the border conflict flared up again. In addition, China is actively supporting Pakistan, which is India's adversary. In general, India's choice is far from clear, and it will try to balance between the two sides of history, while South Africa and Brazil will fluctuate in sync with it.

Unobvious Conclusions

Most likely, we will see the institutional crystallization of the BRICS as an alternative project to the West, but not a hostile one (which does not negate the "hostility" of individual members of the bloc). 

As a result of the next expansion of the bloc (Argentina, Ethiopia, Iran, UAE, Saudi Arabia, Egypt), its parameters will increase to more than 3 billion people, 25-30% of the world GDP, more than $25 trillion of gross domestic product per year, and more than half of the world trade. 

The main advantage is high, outpacing growth rates: in the decade before the pandemic, the GDP of the bloc's countries doubled, while the global economy grew by only 40%. 

The weakness is the low internal trade turnover of about 10-15%, which makes the bloc dependent on markets in developed countries. 

In addition, the bloc does not yet have foreign exchange reserves similar to the IMF and its own unit of account similar to the SDR. 

As for trade turnover, a tectonic shift is possible only if China opens its market to the bloc's countries. Only then will commodity flows begin a global reversal from west to east. This will turn China into a country with a trade deficit (which sounds fantastic for now) and will require it to issue its own financial instruments to attract free liquidity from the bloc members (analogous to Chinese treasuries). 

In other words, China will allow earnings on its domestic commodity market, but in return will require that part of the earnings be invested in its bonds. 

This will be possible as part of the program to turn the Chinese currency into the world's reserve currency - the yuanization of a part of the developing world. 

If we look at the stages of global power, it is very, very similar to the plan for global dominance of the dollar and the United States, but only in the context of China and its role in the structure of the Global South. 

And to do so, China will have to try to seize leadership in the new technological order that is now emerging. In this case, this will become the global agenda for the next 20 years. 

And the very fate of the bloc and the Global South as a whole will be determined in India, not China. This is understood in New Delhi, Washington, and Beijing. After all, the "golden share" is now in Hindustan.

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