BRICS flex their muscles on the world stage
The traditional September diplomatic highlight is the UN General Assembly, but next month there is strong competition from global summitry that includes the BRICS and the Shanghai Cooperation Organisation forums.
Leaders from Russia, China, India, Pakistan, Tajikistan, Uzbekistan, Kazakhstan, and Kyrgyzstan will convene for the SCO summit on Sept. 16-17. The SCO is still a relatively little-known grouping, but covers about 60 percent of the Eurasian continent where 3 billion people live, almost half the world’s population. It could grow, with Iran, Mongolia, Belarus, and Afghanistan observers in the group, while Armenia, Azerbaijan, Turkey, Cambodia, Nepal and Sri Lanka are dialogue partners.
Important as the SCO is, the BRICS (Brazil, Russia, India, China, and South Africa) capture much more of the international limelight. This is partly because the five powers are increasingly flexing their muscles on the world stage, pushing for an international order with a bigger role for developing nations.
While the origin of SCO lies in defense and security, it is economics that drove the formation of the BRICS, reflecting the fact that the five powers account for about a quarter of global GDP, and over 15 percent of world trade. In its first decade, the bloc became a more cohesive force with a strong desire to advance itsdevelopment strategies by coordinating macroeconomic policy.
However, the bloc is increasingly prioritizing political cooperation, exemplified by this year’s Indian presidency. The four priorities for New Delhi in 2021, with the leadership summit on Sept. 9, are enhancing intra-BRICS anti-terrorism cooperation; enabling greater people-to-people interaction; delivering the Sustainable Development Goals; and reform of the multilateral system to deliver on what BRICS says is a common ambition of sovereign equality of all states and respect for territorial integrity. This emphasis on reforming the multilateral order is also showcased in broader BRICS projects, such as the creation of the New Development Bank as an alternative to the World Bank and International Monetary Fund.
The bank finances infrastructure and other projects in the BRICS, and a related $100 billion special currency reserve fund. One driver is the perception that it will allow BRICS to better promote their interests abroad, strengthening positions and opinions which are sometimes ignored by Western colleagues.
At the same time that BRICS are stepping up their political cooperation, there is growing skepticism of the relevance of the group as an economic club given the diverging long-term economic trajectory of the powers.
Another recent initiative, perceived to challenge US and wider Western preponderance in information technology, was agreed when the BRICS signed a letter of intent to cooperate in the sector.
These examples underline the hunger of the BRICS to become even bigger political players, raising fears in some quarters that the bloc could ultimately become a unified anti-Western alliance. However, this is most unlikely in the immediate future, and the bloc will probably not decisively move beyond an increasingly institutionalised forum for emerging market cooperation any time soon.
Part of the reason for this is their diverse interests, as illustrated by Beijing’s periodic tensions with New Delhi. This has been one driver of the so-called anti-China Quad of powers comprising India, the US, Japan and Australia.
At the same time that BRICS are stepping up their political cooperation, there is growing skepticism of the relevance of the group as an economic club given the diverging long-term economic trajectory of the powers. Before the pandemic, generally robust economic performance in China and India over the past two decades contrasted with disappointing results in Brazil, Russia, and South Africa. However, even India went into recession in 2020 while China was the only major global economy to grow.
Despite diverging fortunes, the BRICS’ share of global GDP has grown by over 10 percentage points from about a decade ago, and this is having a major global impact. World Bank research has shown that for the first time in about two centuries, overall global income inequality appears to be declining, driven by the emerging market powers. At the same time, however, there is an opposing force — growing income inequality within many countries. This has assumed growing political salience helping fuel populist, nationalist politicians such as Brazil’s Jair Bolsonaro.
With these pressures pushing against each other, the net global trend for the past 200 years has been toward greater overall income inequality. But there is growing evidence in the past two decades that the positive effect of growing income equality between countries is superseding the negative effect of increasing inequality within nations.
When the pandemic recedes, it is unclear whether this dynamic has enough momentum to keep driving forward a more equitable world order. This will therefore be one of the major agenda items at September’s BRICS summit, given the concerns that the fragile process could yet go into reverse, especially if growth in China and India flattens significantly in the 2020s.
- Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics