BRICS, an acronym for the developing or newly industrialised nations Brazil, Russia, India, China and South Africa, is a rapidly growing association that represents 18 percent of the world’ economy. It came into being in 2006 as BRIC but South Africa joined the group in 2010, completing the pentad. Without stating it categorically, BRICS provides a counterweight to the dollar and the IMF. Its declared aim is to play an active role in enhancing multilateralism and international cooperation for the promotion of peace, security, economic and social progress, and sustainable development in an interdependent and increasingly complex, globalised world. Interestingly, each of the member countries represents a civilisation that is both particular and highly important on the global scale.
The economic meltdown of the US made it clear that the financial empires built by the Rockefellers and Rothschilds were crumbling, yet individual states that chose to shed the shackles of the dominance of the dollar paid dearly. It is no coincidence that Saddam Hussein, who had banned dollar circulation in all spheres of Iraq’s economy, including the oil trade, was toppled, summarily executed and his country was reduced to rubble. Muammar Gaddafi, who had begun the process of replacing the dollar backing of Libya’s oil and gas transactions with gold-backed Arab currencies, was brutally killed and his homeland has been turned into a hotbed of turmoil. Tehran, which planned to make its economy devoid of dollar support, has been threatened, challenged and warned, thus shelving its agenda.
The time thus was ripe for the BRICS nations to establish an independent international organisation encouraging commercial, political and cultural cooperation between its members and also woo the Muslim nations into its fold. In late March 2013, during the fifth BRICS summit in Durban, South Africa, the member countries agreed to create a global financial institution that would counterbalance the western-dominated IMF and World Bank. At the BRICS leaders meeting in St Petersburg in September 2013, China committed $ 41 billion towards the pool, Brazil, India and Russia $ 18 billion each, and South Africa five billion dollars, setting the course for achieving its aim. The fruition of this dream thus came about at the sixth summit of BRICS on July 15, 2014, at Fortaleza, Brazil where the member states signed the long-anticipated document to create the $ 100 billion BRICS Development Bank and a reserve currency pool worth over another $ 100 billion. Documents on cooperation between BRICS export credit agencies and an agreement of cooperation on innovation were also inked.
Doubting Thomases including Robert Zoellick, the outgoing president of the World Bank, had opined that the BRICS Development Bank would never take off because of the clash of interests of the member states but it has now become a reality. Critics have gone to the extent of predicting that Russo-Sino rivalry will cause it to collapse. They miss the point: even a cursory glance at the Shanghai Cooperation Organisation (SCO) indicates that such misgivings are unfounded.
Top priority for the BRICS bank is the funding of development projects and infrastructure in developing nations. This programme will enable the countries to pool resources for infrastructure improvements and serve as a financial institution for lending during global financial crises such as the one in Europe. This confidence emerges from the fact that in contrast to the US and the EU, BRICS countries altogether own natural resources sufficient not only to keep their economies afloat in the settings of contracting availability of hydrocarbon fuels, food, potable water and electric power, but also to sustain vigorous economic growth. Trade will be carried out between the BRICS nations in their own currency, thus shedding the influence of the dollar and averting the possible negative impacts arising from a euro or dollar crisis. This raises the prospects for the creation of a special reserve BRICs currency that could rival the IMF’s special drawing rights and in time a regional currency could emerge.
The advent of BRICS thus will have definite ramifications on current global geopolitical dynamics. The contemporary unipolar world order, propped up by financial and military might, has created global conflicts. BRICS is poised to provide an alternative world order that would seek to resolve global and regional issues pragmatically. The unipolar world order attempted to gain access to or control the scarce energy sources of the developing world. Replacement of this order could have positive consequences like tackling the core issues through a collectivist approach, effecting moderation in the use of natural resources and refining consumer appetites.
Indonesia and Turkey are candidates for full membership of BRICS, while Argentina, Egypt, Iran, Nigeria and Syria are aspiring to join it. Pakistan may lack economic prowess and rich energy sources but has a lot to offer in terms of its geostrategic location and should make a bid for BRICS’s membership.
The writer is a former group captain of PAF, who also served as air and naval attaché at Riyadh. Currently, he is a columnist, analyst and a television show host