Western institutions like Goldman Sachs expect BRICS to dominate the world economy by 2050, but still cannot understand how it works despite its strengths.
FOUR countries, each with considerable growth promise, were exploring greater trade and investment prospects at the turn of the century.
They were already among the world’s top 10 countries by way of geographical spread, population size, and national economic strength in GDP, in both nominal and purchasing power parity (PPP) terms. They were also working well together.
Brazil, Russia, India, and China then came together in 2009, and Goldman Sachs nicknamed them by the acronym “BRIC”. South Africa joined the following year to make it “BRICS”.
Almost immediately, Western scepticism worked overtime. It ranged from how a grouping with no discernible identity could achieve anything, to how long such an association with no conceivable purpose could possibly last. The sceptics did not seem to notice that the five countries happened to form a quarter of the Group of 20 (G20). Serious observers had known that the G20 was steadily surpassing the Western-led Group of 7 (G7) countries in global significance.
The International Monetary Fund had initially identified the G7 as the world’s leading economies. Yet just the five BRICS countries had exceeded the G7 in terms of GDP in PPP – with the promise of more.
Clearly, BRICS represented a shift in the global economy’s tectonic
plates. A new planetary alignment in economic power was underway, but this could not be understood through old ways of thinking.
Within the typically narrow Western perspective, an alliance could hold only by targeting significant others outside the group – or had clear affinities among members in seeking to target others.
Evidently, BRICS did not fit this notion of an intergovernmental grouping to work. BRICS was not about targeting anyone, but about developing members’ potential for building a more equitable global order together.
Obviously, those intent on keeping the Global South permanently down will be alarmed by BRICS’ development. However, such neocolonial attitudes are now the ones fading out.
BRICS is about the Global South spreading its wings, in solidarity with transnational partners and megatrends moving in that direction.
To emerging regions in the developing world this is identity and purpose enough, even if it is a blur to former colonial powers.
Typically, many in the West cannot fathom how BRICS can
nd appeal to any “friendly” or nonaligned country. They assume that countries come together only as an “alliance”, which in turn must work to rival or oppose others in zero-sum fashion.
They tend to forget that BRICS began as a small community of emerging economies exploring greater trade and investment opportunities. Economic development is crucial to countries of the Global South because colonialism had robbed them of it.
Among the Global North’s misperceptions is that BRICS is a rival to the G7. That is a mistake in terms of BRICS’ identity and purpose.
Rivalry is another party’s definitive challenge to the point of rendering one redundant or irrelevant, and then usurping one’s purpose through displacement.
To that end, the G20 should be paired with the G7 and BRICS with the Organisation for Economic Cooperation and Development (OECD). The G20 and G7 are competing entities much like BRICS and the OECD, not BRICS and the G7.
Each group has agency, yet only represents emerging or receding megatrends. Countering “unfavourable” megatrends is an enormous or impossible task that requires addressing their historic undercurrents, not the organisations themselves.
The fact that the G20 includes major BRICS countries shows that the G7 as its Western component, in ceding some influence, is facing the global shift towards multipolarity. This reality should be acknowledged and managed intelligently.
Most countries see no contradiction between joining BRICS and continuing healthy relationships with Western powers for mutual benefit. Of course, such relationships have to be based on equality and mutual respect between sovereign nations, not any kind of neocolonial or patron-client arrangement.
Indonesia reportedly considered joining BRICS, only to shelve the idea in prioritising OECD membership. Malaysia has applied to join BRICS, with an intention to join the OECD as well.
India as an important partner of the West is a leading member of BRICS. Vietnam is another Western partner considering BRICS membership.
US ally Thailand has applied for membership, while Laos and even its former “protectorate” master France have indicated interest in BRICS. Another Nato (North Atlantic Treaty Organisation) member Turkey showed interest in 2018 and applied for membership this year.
Naturally, nonaligned Malaysia seeks better economic opportunities with BRICS. After joining the Us-led Indo-pacific Economic Framework and the Trans-pacific Partnership (now Comprehensive and Progressive Agreement for Trans-pacific Partnership) once led by the US to exclude China, for Malaysia to snub BRICS would be to tilt against its main trading partner.
BRICS membership provides pluses that are cumulative with no trade-offs elsewhere. Even if only some Asean members join, it would benefit Asean as a whole through better global economic networking, without disadvantaging neighbouring countries that are not BRICS members.
BRICS offers expanded trade and investment opportunities in new, untapped markets and preferential trading arrangements among members. Greater use of local currencies also reduces transaction costs, minimises exchange rate volatility, and strengthens the value and status of local currencies.
Membership also means access to funds from BRICS’ New Development Bank, and exchange-traded funds invested in members’ emerging economies that are among the world’s fastest growing. The potential benefits explain BRICS’ popularity among dozens of countries worldwide regardless of culture, history or politics.
For Asean countries like Malaysia, membership of BRICS and the Regional Comprehensive Economic Partnership (RCEP) as the world’s biggest trading bloc can mean powerful new synergies for accelerated and sustained economic growth. Every country has the responsibility to its citizens of making the most of every available development opportunity.
For the developing world, BRICS provides a means for fasttracking the route to fully developed status. For all countries in the Global South and North, it also provides coordinated efforts for fulfilling such global public goods as UN Sustainable Development Goals.
By BUNN NAGARA Bunn Nagara is director and Senior Fellow of the BRI Caucus for Asiapacific, and Honorary Fellow of the Perak Academy. The views expressed here are solely his own.
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