The new unity of the BRICS-Countries

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CWA # 1055, 12 September 2023
The new unity of the BRICS-Countries
The US and the EU are lacking support in many developing and emerging economies

  Heribert Dieter

About the Author

Prof Heribert Dieter is a Visiting Professor at the National Institute of Advanced Studies, Bangalore, India.

Western industrialized countries are losing important partner countries in the developing and emerging economies. Both the US and the countries of the EU are succeeding less and less in winning allies in international relations. Instead, the BRICS group, which includes the People's Republic of China and Russia, two of the most important adversaries of the West, has surprisingly gained in popularity. The group's recent summit in South Africa held in August saw the inclusion of Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates. For the West, this is a warning signal. In the geopolitical conflict with Beijing and Moscow, the US and the EU depend on allies in Africa, Asia and Latin America. But why do numerous developing and emerging countries go their own ways and forego closing ranks with the US and the countries of the EU?

Lectures instead of cooperation between equal partners
An important point concerns the manner of Western foreign policy rhetoric. Since the war in Ukraine, the tone of Western foreign policy makers has become more aggravated. Western foreign policy makers now like to advocate their political positions in an absolute tone that does not allow for dissent. In Europe, too, the binary thinking familiar from American neoconservatives has now taken hold. The world is divided into good and evil.

Similar words were uttered by American and European politicians after Russia's invasion of Ukraine. In many countries in Asia, Africa and Latin America, however, it remains unforgotten that the US-led group attacked Iraq in 2003 without a mandate from the UN Security Council and based on fabricated circumstantial evidence.

A glance at the history of the first Cold War is enough to understand the futility of cautionary positions. Later US President and then-Senator John F Kennedy noted in 1957 in the New York Times that neither the US nor the USSR could decisively shape international relations in the Cold War. Neither country could continue to shape international politics unilaterally and ignore the perspectives of other nations-Kennedy named India, Japan, China, and a number of nonaligned states. Their thinking and perspectives, Kennedy said, would decisively influence the distribution of power in international relations.

It is by no means only small, insignificant countries that aspire to join the BRICS group. That aspiration is driven by discontent with the current world order. Candidates include Saudi Arabia, which for decades was one of the United States' staunchest allies in the Middle East. Indonesia, a country with the fourth-largest population after India, China and the US is one of the most important players in the Indo-Pacific region. It is surprising that Argentina and Thailand are not afraid to cooperate closely with China and Russia.

Vague goals
The second reason for the popularity of the BRICS group are the current financial policies of Western countries. The US, in particular, has never designed its financial policy with the consequences for developing and emerging countries in mind. After the financial crises in the US and Europe, central banks lowered interest rates to extremely low levels from 2008 onward, encouraging low valuations of their currencies. For a good year now, Western central banks have been focusing on fighting inflation and have once again caused fiscal turbulence.

The result of the self-serving policies of the US and other Western industrialized countries is that the search for alternatives to the American dollar has gained momentum. Apparently, many rulers in Asia, Africa and Latin America can well imagine themselves being hit by sanctions one day. Therefore, one of the economic policy goals of the BRICS group is to reduce the importance of the dollar for the settlement of trade in goods as well as for foreign exchange reserves.

Protectionism
The third reason for the declining popularity of Western countries is the current economic policy of the US and European countries, which is focused on partial self-sufficiency. The US is acting particularly brazenly. With the "Inflation Reduction Act," the US government is spending USD370 billion just to promote climate-friendly production.

The so-called friendshoring, in essence a preference for trading with economies that share the same political vision was propagated by US Secretary of State Janet Yellen, however, is a deplorable throwback to the autarchic striving of the 1930s. However, not only the US but also the countries of the EU have abandoned the previous form of international division of labour. But this departure from liberal trade policies is not only costly, it is also driving them into economic isolation. Poorer countries rightly view this departure from the previous liberal trade order with concern: The US and the EU are making access to their own markets more restrictive and are subsidizing individual industries with massive amounts.

The US and the countries of the EU, on the one hand, want to enter into geopolitical competition with communist China and authoritarian Russia and, on the other hand, behave as if the unipolar moment that began after the collapse of the USSR is still continuing. This will not work: The lack of acceptance of divergent perspectives of many African, Asian and Latin American countries benefits authoritarian China in particular. Beijing knows no supply chain laws in its foreign economic relations and acts less lecturing in foreign policy than Western countries.

References
1. George W. Bush, “Address to a Joint Session of Congress and the American People,” georgewbush-whitehouse.archives.gov, September 2001.
2. Chaguan, “The message to the global south,” The Economist, 08 July 2023, p. 14.
3. John F. Kennedy, “Sputnik has come, American complacency has gone.” The New York Times, 08 December 1957.
4. Michael Pettis, “The High Price of Dollar Dominance,” Foreign Affairs, 30 June 2023.
5. Mark Leonhard, “Governing in a Post-Western World,” Project Syndikate, 05 July 2023.

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