Bola A. Akinterinwa Telephone : 0807-688-2846 e-mail: email@example.com
BRICS is an acronym for the association of Brazil, Russia, India, China and South Africa. The BRICS held its 8th summit last week Saturday, 15th and Sunday, 16th October, 2016 in Goa, India. Interestingly too, the theme of the summit was also BRICS but not BRICS in terms of individual concerns of members of the association: ‘Building Responsive Inclusive and Collective Solutions.’
The BRICS is currently a loose association of four original members (Brazil, Russia, India, and China), which acquired cooperative consciousness following Jim O. Neill’s paper presentation entitled “Building Better Global Economic BRICs” in 2001 and South Africa, which acceded to it in 2010. O’Neill, then the Head of Asset Management at Goldman Sachs, gave the acronym within the context of emerging economies capable of surpassing the current big economic powers come 2050. This served as a foundation for self-consciousness and establishment of the BRICS as from 2006 when BRIC Foreign Ministers held their first meeting on the margins of the 61st UNGA in New York. The first BRIC summit meeting was held on 16 June, 2009 in Yekaterinburg, Russia where initial efforts were made to formalise the association following the third meeting of Foreign Ministers which decided to boost cooperation among the original four members. South Africa found this quite interesting and therefore joined it.
The declared objective was ‘building a more democratic international system founded on the rule of law and multilateral diplomacy.” In the thinking of the original members, the current international system is not democratic and not operated on the basis of rule of law, and if it is, it is not good enough and therefore needs improvement. At the international monetary level, for instance, it is argued that the IMF model of growth (Washington Consensus) is a major source of the 2008 global financial crisis because of lack of financial surveillance.
Additionally, Joe Thomas Karackattu of the Institute for Defence Studies and Analyses, also argued that the dollar no longer seems to be sacrosanct and that change in valuation of the dollar necessarily ‘results in sharp spikes in energy and commodity bills for all.’ In fact, ‘with 40% of the world population and a creditable contribution to world economic output (25%) the BRICS grouping feels it is time to seek political access in global rule-setting processes.’ This requires reforming the existing quota and votes in the IMF’s Special Drawing Rights used to lend funds to countries. The BRICs wants a change in the composition of the SDRs basket of currencies: the Euro, Yen, Pound Sterling, and US dollar.
And true, BRICS population is about 3 billion people (43% of world population). Its GDP, put together, is $14.8 trillion. BRICS accounts for about 17% of world trade and has about $4 trillion in foreign reserves. With this impressive profile, it is expected that by 2018, overall economic output in the BRICS may overtake that of the US. By 2020, 33% of world GDP may be accounted for by the BRICS. By 2027, China’s GDP will equal the US, and by 2050, the BRICS economies may absorb 50% of global markets.’ This expectation by the Centre for the Study of Governance Innovation (CSGI, University of Pretoria) appears to be a major dynamic of BRICS’ self-estimation and inducement into error of believing that it has to be .
This self-estimation particularly reminds one of Shakespearean Macbeth in which the valiant cousin of King Duncan, Macbeth, was told by three witches that he would be king and that he could not be killed unless by anyone not born by a woman. Macbeth considered that if he was to be king and King Duncan was still alive, it means he had to kill him. Macbeth believed in the prophecy that no one could kill him but ignored the reality of birth by Ceasarian Section and therefore concluded that he could only become king by killing King Duncan. In the same vein, BRICS similarly considers that, in order to build a more democratic international system, founded on the rule of law and multilateral diplomacy, the approach is to challenge by peaceful means the post-World War II Breton Woods institutional order. It is against this background that the various BRICS summits have been organised. We contend here, however, that
BRICS as Alternative Economic Driver
This is a macroeconomic approach that cannot enable the replacement of the Breton Woods system and therefore, an alternative future for various reasons.
First, the dividends of World War II, in terms of privileges and advantages are already part of national sovereignty of the beneficiaries and therefore cannot be easily wished away on the altar of negotiations, unless predicated by force majeure. For instance, why would the UK or the US accept the discontinuation of the use of their national currencies as instruments of international financial transactions? Which of the UNSC P-5 wants to do away with its privilege and right of veto power?
Secondly, the CSGI sees the BRICS as a GDP Club whose concept ‘has been founded on economic growth projections, with no reference to other parameters such as political/social development and inclusivity,’ but there is nothing to suggest that there will not be deceleration in the GDP growth predictions in the future, especially in light of the income inequality and growing public mistrust in the BRICS countries.
Thirdly, intra-BRICS strategic interests are deeply conflicting. The US does not want China to ever become the dominant stakeholder in the Asian region, and therefore favours Japan’s candidature for a permanent seat on the UNSC. China is not favourably disposed to the candidature of India, which, along with Brazil, want to join the UNSC. China and India have territorial disputes over Tibet, etc.
Fourthly, the membership of BRICS countries in other competing organisations creates a conflict of interest. The six richest industrialised countries (France, West Germany, Italy, Japan, UK and US) constituted themselves into G-6 in 1975. Canada joined it in 1976 while Russia joined it in 1997 to become G-7 and G-8 respectively. The objective of BRICS necessarily opposes what the G-8 or the G-20 stands for. Which is Russia’s priority?
Fifthly, there is the non-controllability of the dollar trap syndrome according to which the weakening of the dollar cannot but strengthen the Yuan, and therefore making exports costlier. In this regard, are other BRICS countries prepared to accept the Chinese Yuan as their common currency?
Sixthly, BRICS, as a technique of enabling a change, is presented as a struggle of the non-developed, versus the developed, world but without securing the support of the truly non-developed countries. Alfred Sauvy, French demographer, coined Tiers Monde (Third World) from the First World of the capitalists and the Second World of the socialo-communists. By implication, China and Russia do not fall under a Third World.
However, not only is China presenting itself as a developing state, the BRICS countries are all purporting to be defending the interests of the developing countries. This is quite arguable as Africa, which plays host to most of the least developed countries of the world, is not carried along. BRICS is likely to become an instrument of a new Cold War as China is apparently set to replace the US as a successor leader of the world but the US wants to sustain its leadership until 2030, at least.
Consequently, it cannot be sufficient to capitalise on the macro-economic progress being made in the BRICS countries to expect that the existing centres of economic decision will no longer exist. The worst scenario is that new candidates can always be accommodated on the basis of force-majeure induced self-imposition.
Goa Declaration and Implications for Nigeria
The outcome of the 8th BRICS summit was summarised under the Goa Declaration of October 16, 2016. It is not only a pointer to the challenges posed to the continued maintenance of the Breton Woods regulations as they are currently, it also raises many issues for Nigeria’s foreign policy.
The Goa Declaration, issued by the Ministry of External Affairs of India, is comprised of 109 paragraphs and dealt with the main issues with which the international community is currently challenged. Paragraphs 17-20 focused specifically on the African Union (AU) matters: Agenda 2063, conflict resolution, operationalisation of the Peace Fund, and war on terror. Regarding AU Agenda 2063, the BRICS reaffirmed its support for the aspirations, goals and priorities for Africa’s development. As the BRICS put it, ‘we will continue to engage in joint endeavours to advance Africa’s solidarity, unity and strength through support measures for regional integration and sustainable development.’
The BRICS also reaffirmed its commitment to conflict resolution in Africa through the AU’s Peace and Security Architecture and also supported ‘efforts aimed at full operationalisation of the African Standby Force (ASF), especially as it is being done at the level of the African Capacity for Immediate Responses to Crises (ACIRC). As regards the situation in North Africa, BRICS supports ‘all efforts for finding ways to the settlement of the crises in accordance with international law in conformity with the principles of independence, territorial integrity and sovereignty of the region’ (paragraph 14). On terrorism, the BRICS simply called on the international community ‘to continue their support in addressing these challenges, including post-conflict reconstruction and development efforts.’
What is clear from the foregoing is simply an intended support which may or may not come. Consequently, there is no big deal yet with an intention to support. Only the situational reality of the time can tell. In the same vein, while paragraph 6 underlines the importance of collective efforts in solving international problems and of peaceful settlement of disputes, the need for collective efforts was further emphasized in paragraph 7: ‘the establishment of sustainable peace, as well as the transition to a more just, equitable and democratic multi-polar international order requires a comprehensive, concerted and determined approach, based on spirit of solidarity, mutual trust, benefit, equity, and cooperation…’
The essence of paragraphs 6 and 7 is necessarily an indictment of the Washingtonian mania of monopolising the conduct and management of international monetary questions, hence BRICS’ call for joint efforts in dealing with the issues. The BRICS wants to be carried along in the management of global economic issues, especially in the determination of the rules in order to ensure fairness, equity and justice.