The world’s eye has been glued to South Africa this week, all thanks to the coming together of the world’s emerging economies. Johannesburg played host to BRICS Summit consisting of Brazil, Russia, India, China and South Africa.
Worthy of note is that the latest edition appears to have attracted huge interest from countries outside the current membership. To be precise, more than 40 countries including at least six from Africa and a dozen more from Middle East and South America have asked to be allowed to be part of the bloc.
At the conclusion of the summit, the founder members announced they had agreed to expand the bloc and approved requests from Argentine Republic, the Arab Republic of Egypt, the Federal Democratic Republic of Ethiopia, the Islamic Republic of Iran, the Kingdom of Saudi Arabia and the United Arab Emirates to become full members of BRICS from 1st January 2024.
All these countries consider the alliance a better alternative. But why would countries all of a sudden start clamoring to join BRICS? To respond to this question, one ought to establish its relevance in the contemporary global order.
One can only seek an alternative if the prevailing conditions have either failed or altogether fell short of the expectations. It remains unclear but there is a sense these nations have scouted and realized BRICS will serve them better. Others, have said, their voices have been suppressed for long whereas BRICS has been designed in a way that accommodates them and their views, particularly, through constant consultation.
Most significantly, these countries are successfully shifting focus from the Global North to the Global South in terms of engagements. There is the issue of the US dollar being the dominant currency of the world. BRICS countries have loudly spoken about the need to establish an alternative payment system that allows seamless transactions between parties that trade with each other. On this, the goal is for countries to become less reliant on the dollar.
The genesis of this clamour can be traced to last couple of years when the value of US dollar appreciated significantly against most other currencies as the US Federal Reserve hiked interest rates. This had a negative effect in almost all countries that borrow, pay for imports, or food products, in dollars, for the reason that transactions cost have become more expensive. It has been argued that African countries bore the greatest brunt of this turn of events.
Holes have also been poked on the existing international financial system that is accused of charging developing countries heavy interest rates on loans. President William Ruto of Kenya decried that developed countries enjoy interest rates of as low as 0.5 percent as compared to more than 10 percent rates levied on developing countries.
“The high interest rates have made it impossible for developing countries to finance any meaningful development,” he said
This hue and cry resonates across the whole continent and it also appears to have captured the attention of BRICS countries that have gone ahead to unveil a financial institution, the New Development Bank (NDB), to serve as an alternative to the World Bank and the International Monetary Fund. NDB’s major goal is to push forward reform of the international financial and monetary systems, and increase the representation and voice of developing countries. The bank is also now providing funding for infrastructure and sustainable development projects. So far, the NDB has sanctioned almost $8 billion in renewable energy and infrastructure projects across the BRICS countries.
To accommodate members’ interests, BRICS fashioned a mechanism designed to support member countries facing payment difficulties. This is huge seen from the perspective of global economy that is smarting from disruptions caused by covid-19 pandemic. Besides pursuit of socioeconomic recovery, the bloc is eager to build resilient and self-sufficient supply chains.
The fact that China, the world’s second-largest economy is a member speaks volumes particularly given the strides the East Asian nation has made over the last few years.
During the summit, Chinese President Xi Jinping emphasized the need to rally behind developing countries especially at a time the world economic recovery remains shaky, hence hampering their efforts to realize the Sustainable Development Goals.
He, just like on numerous occasions, reiterated that “development is an inalienable right of all countries, not a privilege reserved for a few,” underscoring his wish to see countries in the Global South also attain desired levels of development.
The Chinese leader said BRICS is a tool that will shape the international landscape, in such a way that whereas countries will choose their development paths independently, they will march in tandem toward advancing human society, and profoundly impact the development of the world, by creating an environment that is “more just and equitable,” in all respects.
Perhaps more significant is the fact that Xi envisions a bloc that only focuses on practical cooperation, particularly in such fields as digital economy, green development, and supply chain, and bolster economic, trade and financial exchanges.
Keen observers have discussed its growing influence. And, Economist Jim O’Neill, has suggested that the bloc would in the near future dominate the world economy.
Artificial intelligence is a new area of development, and promises huge dividends, and it is telling that the BRICS countries have announced plans to launch the AI Study Group soon. Its goal is to step up information exchanges and technological cooperation.
These nations have been promoting some of the world’s notable ambitious projects, reflecting their respective visions for sustainable development. They have individually, with the exception of South Africa, championed initiatives that have given the continent a foundation for growth. China’s Belt and Road Initiative, for instance, aims to establish extensive infrastructure networks connecting Asia, Europe, and Africa. Its impact is already being felt in Africa and beyond. The demonstrated willingness and ability by BRICS countries to significantly contribute to global poverty reduction and end disparities is also a plus, and bodes well in efforts to defend the rights of the developing countries, or the Global South.
The bloc, therefore, presents another platform to share development opportunities and tackle pertinent issues facing humanity. And thanks to its founders, it is not an exclusive bloc.
Eric Biegon is a multimedia journalist at Kenya Broadcasting Corporation.