BRICS: towards a new world order | Page 2 | Sunday Observer

BRICS: towards a new world order

20 August, 2023

Anew North-South confrontation looms in West Africa, even as the world’s emerging new geopolitical power bloc, BRICS, prepares for its annual summit this week hosted by South Africa.

Brazil, Russia, India, China and South Africa, increasingly seen as the leaders of what is popularly called the ‘Global South’, are to meet August 22-24, in Johannesburg at the City’s Sandton Convention Centre.

Such is the geopolitical significance of BRICS that a news agency analysis expects the summit to“discuss how to turn a loose club of nations accounting for a quarter of the global economy into a geopolitical force that can challenge the West’s dominance in world affairs”.

South African President Cyril Ramaphosa, President Xi Jinping of China, Brazil’s President Luiz Lula da Silva and Indian Prime Minister Narendra Modi are expected to attend the summit. Nws agency reports: “Russian President Vladimir Putin will not attend in person due to a warrant for his arrest issued by the International Criminal Court (ICC) for alleged war crimes in Ukraine, something Moscow denies.”

President Putin, who will be a virtual participant, will be represented in Johannesburg by Russian Foreign Minister Sergei Lavrov.

Invitations to attend the Summit were also extended to 67 leaders across Africa, Latin America, Asia and the Caribbean, agencies quote South African Foreign Minister Naledi Pandor as announcing. Heads of 20 multilateral institutions, including the Secretary-General of the United Nations (UN), the Chairperson of the African Union Commission (AUC) and the President of the New Development Bank (NDB) have also been invited. Business leaders are also expected to be in attendance.

This will be the BRICS’ 15th annual summit. Formed mainly on the initiative of China, BRICS actually brings together the world’s largest population grouping (by far), a sizeable share of global economic production, and easily comprises the world’s biggest consumer market.

The BRICS have a combined area of 39,746,220 km2 (15,346,100 sq mi) and an estimated total population of about 3.21 billion, or about 26.7 percent of Earth’s land surface and 41.5 percent of the global population.

Brazil, Russia, India, and China are among the world’s 10 largest countries by population, area, and Gross Domestic Product (GDP), and the latter three are widely considered to be current or emerging ‘superpowers’. All five states are members of the ‘Group of 20’ largest economies (G20). The original acronym “BRIC” was coined in 2001 by Goldman Sachs economist Jim O’Neill to describe the four fast-growing economies that would collectively dominate the global economy by 2050. Africa’s richest country, South Africa, was later invited to join, adding an ‘S’ to the acronym.

Gross world product

The BRICS have a combined nominal GDP of US$ 28.06 trillion, making up about 26.6 percent of the gross world product. They hold an estimated US$ 4.46 trillion in combined foreign reserves (as of 2018). In comparison, the nominal GDP of the United States of America stood at US$ 23.3 trillion in 2022 while the European Union’s GDP amounted to US$ 14 trillion. The long-term intentions of BRICS are best exemplified by the innovative financial institution they have set up – the NDB.

The NDB was first proposed by India at the 4th BRICS summit in 2012 held in Delhi.

According to the BRICS Agreement on the NDB formally signed at its 2014 summit in Brazil, “the Bank shall support public or private projects through loans, guarantees, equity participation and other financial instruments.”

The initial authorised capital of the NDB is US$ 100 billion divided into 1 million shares having a par value of US$ 100,000 each. The initial subscribed capital of the NDB is US$ 50 billion divided into paid-in shares (US$ 10 billion) and callable shares (US$ 40 billion). The initial subscribed capital of the NDB is equally distributed among the founding Members (Brazil, Russia, India, China, South Africa). The agreement on the NDB specifies that every Member will have one vote and that no Member would have any veto power(s).

Although, in financial terms, the NDB is virtually underwritten by China’s new wealth as the world’s largest producer, what is most significant about the NDB is its contrast with its older rival, the Washington DC-based World Bank, in terms of internal governance. The major capitalist powers that set up the World Bank, hold institutional governing power according to their shareholding based on invested capital.

Controlled by the US and its (formerly colonial) European allies – all grouped in the North Atlantic Treaty Organisation (NATO) – the World Bank is notorious for its practice of dictating terms for credit to the world’s poorer countries. Those imposed terms are geared to enable the further penetration into their national economies of the businesses and products of those capitalist powers that control the World Bank.

The NDB has a structure and operational style that negates such coercive and one-sided political-economic intent. All NDB share-holding states have equal voting power. Bank decisions, policies and plans are made strictly in accordance with the equal recognition of the interests of Member States. Policy represents the collective interests of Member States. NDB objectives and operations meet the needs of countries that are outside the old concentration of global power, namely the old colonial powers now led by the newly dominant USA.

Historical sense

In that historical sense, the BRICS and its NDB are in geopolitical opposition to the continuing world hegemonist thrust of NATO and World Bank-IMF. The Bank is headquartered in Shanghai, China. The first regional office of the NDB is in Johannesburg, South Africa. The second regional office was established in 2019 in São Paulo, Brazil, followed by offices in Gandhinagar (Gujarat), India and Moscow, Russia. The NDB’s financial operations are already creating new spaces of global economic development free of the burdensome practices of the Western powers and their remorseless enforcement of trade and industrial dominance.

A new world economic and political order is heralded by BRICS, now seen as heading the ‘Global South’ that comprises what was once the Third World but now includes newly developed powers like China and most States not allied with the West.

But the BRICS must face up to enormous challenges even as they challenge the old world order. Most significantly, four of the five BRIC economies are hugely dependent on vital economic, especially industrial, resources from outside their territories. Russia is the one, lucky, exception. Moscow has most of its vital resources, including essential food supplies, within its own vast territory.

What Russia lacks is capital (lawful capital, that is) and, most recently, access to its own wealth banked overseas. Most immediately, Russia is hamstrung by massive economic and political sanctions, imposed by NATO after the invasion of Ukraine, that have global sway because of NATO’s own global enforcing military and political intimidatory might.

Weaker nations

No doubt, the war in Ukraine will be a major topic of discussion in Johannesburg. All the world’s poor and weaker nations, including Sri Lanka, are struggling to survive the severe effects of NATO’s sanctions against Russia and also the West’s similar sanctions against Iran and other perceived ‘anti-West’ states such as North Korea.

BRICS will attempt to build regional capacities to enable the poorer and Non-Aligned states to survive these Western sanctions.

However, a looming conflict in western Africa following the recent military coup in Niger, is likely to be the next important topic on the BRICS agenda.

Three of Africa’s greatest ancient civilisations may soon be in battle against not just the old European colonisers but also with their once colonial African foot soldiers and former slaves as represented in the postcolonial Economic Community of West African States (ECOWAS). ECOWAS earlier gave “one week” for the Niger coup leaders to return power to the pro-West civilian Government, but a fortnight later, the pro-Western alliance has refrained from the military intervention it had threatened. ECOWAS insists that intervention is yet possible.

In logistical terms, military invasion seems almost impossible both geographically as well as in terms of military capacities. ECOWAS’ access to Niger is only through its southern border given that the other neighbouring States all have regimes hostile to the West and have already allied themselves with Niger.

In the centuries prior to Europe’s colonial aggression and the devastation of Africa, there flourished no less than three massive indigenous empires and civilisations in the Western African region. This is a vast region bordered by the Mediterranean to the north, and the Atlantic Ocean to the west and south, down to the Gulf of Guinea and including the Sahara Desert and Sahel region in its interior.

In the north there flourished various Berber chiefdoms and kingdoms. Further south, covering Saharan and Sub-Saharan Africa there flourished the Tuareg desert tribal federations, along with the Songhai, Mali and Ghanian empires with satellite tribal chiefdoms in their peripheries.

African civilisations

The Europeans who arrived to scoop up the economic and intellectual riches of these African civilisations, came with one major advantage: naval and military power based on large, sophisticated sailing ships and gunpowder-based armaments, neither of which could be matched by the African powers.

Africa first experienced the cruel European slave trade – a scale of slavery that far surpassed the slavery that was already practised by the African tribal societies themselves. Next, there followed the actual invasion and defeat of the African kingdoms and chiefdoms and the physical colonisation of Western Africa by the Spanish, Portuguese, British, Belgians, and French.

In the past two weeks, ECOWAS, comprising those States aligned with the Western big powers – principally the US, UK and France – have been gearing up to actually invade Niger to attempt to restore the civilian, West-aligned, Government toppled by the coup.

Niger, wholly dependent on imports for most modern economic resources, including electricity and even basic food items, is currently suffering from a total suspension of all such supplies by its ECOWAS affiliated neighbour States. The world’s poorest country now lives in a total blackout because Nigeria, to its south, has cut the electricity supply.

The world must now hold its breath and watch whether the ‘civilised’ West will use its client States grouped in the ECOWAS to violently interfere – yet again - in the domestic politics of yet another tragically impoverished but resource-rich former colony which it has exploited for so long.