Brics by brick, and groupings beyond numbers

The problem of plenty is often an unintended consequence of international relations. In 2001, when British economist Jim O’Neill coined the term Brics– to club emerging countries Brazil, Russia, India, and China together – he wouldn’t have imagined a day when the global grouping would suddenly expand to include Argentina, Ethiopia, Iran, Saudi Arabia, Egypt, and the UAE.

As the expansion becomes a reality, the burgeoning Brics – with South Africa included in its first stage of development – has more than just coinage to boast of in its next growth phase. With around 26 per cent of the world’s land surface and 41.5 per cent of the global population already under its umbrella, the grouping – Brics+ anyone? – goes beyond the rapid consolidation of a buzzing Global South into a compelling story of shifting power balance.

O’Neill’s paper – The World Needs Better Economic Brics – accurately identified emerging economies with significant potential. Moreover, this massively growing tribe is more than a clever coinage. The Brics agenda has grown beyond its mandate for economic cooperation, political collaboration, alternative global governance, cultural and academic exchanges, and diversification.

Even before this expansion, a Finnish Institute of International Affairs paper described the Brics evolution in these profound words. “Once deemed a mere investment buzzword by some, today the Brics group has evolved into an increasingly notable informal forum reflecting a call for an international order that ought to reflect better the needs and interests of the non-Western world.” Acknowledged or otherwise, the group was the expression of a “resentment about the perceived inability of Western-led institutions to respond to the global financial crisis.”

The Brics mechanism has focused on promoting peace, security, development, and cooperation. It can perhaps add “flexing muscles” as a salient feature manifest with the world’s largest crude oil exporter, Saudi Arabia, joining the bloc with the world’s biggest oil importer, China, and much more. It also means some leading Opec members sharing another platform, possibly with a more significant bearing on global energy supply-demand dynamics.

The newly inducted members would add around 400 million of the population to the 3.27 billion people in the five Brics countries, already 41.13 percent of the world’s population. To put things in perspective, Brics accounted for about 27 percent of the global GDP in 2013, and its total population was 2.88 billion. Before the South Africa summit, over 40 countries expressed interest in joining Brics, and 23 formally applied.

Lurking in the background is a collective desire to reform international institutions and establish a more equitable multipolar world order. However, there are points of contention among member countries due to their diverse geopolitical, economic, and strategic interests. Economic disparities and long-standing border disputes are significant, while trade disputes and widely differing political systems do not make things easy. Brics nations are also involved in different regional alliances and groups with often overlapping or conflicting agendas.

There have also been differences over the operationalisation and role of Brics institutions such as the New Development Bank (NDB). Formerly referred to as the Brics Development Bank, the NDB was set up as an alternative to West-led institutions like the World Bank. Despite making giant strides, the NDB is still some distance from achieving its potential as it debates strategic direction and lending policies.

Mere calls for a common Brics currency do not automatically guarantee benefits from a declining dollar dominance. South Africa’s Central Bank Governor, Lesetja Kganyago, says building a Brics currency would be a “political project” requiring a “banking union, fiscal union, and macroeconomic convergence.” Some pundits believe having a unified base currency might be impossible given the Brics scale. Each nation’s unique economic model and development priorities can lead to divergent views on financial integration, trade liberalization, and investment priorities.

Notably, relations between Brics partners are built on the UN Charter. These are generally recognized principles and norms of international law and the following regulations agreed by member countries at their 2011 Summit: openness, pragmatism, solidarity, non-bloc nature, and neutrality concerning third parties. So, stacking numbers does not guarantee cohesion and influence. There are also other unintended consequences of balancing Brics with G20 and the Shanghai Cooperation Organization for member countries sailing on more boats than one.