Do the BRICS Threaten America's Role in the World?
By Tibor Nagy - September 17, 2023
Who would have imagined that a British economist’s musings would lead to the formation of a block of nations with the intent to create an alternative to the US- led international system. But that’s exactly how the BRICS came about, after Goldman-Sach’s chief economist Jim O’Neil used that term in a paper in 2001 as short for Brazil, Russia, India and China -- countries he believed would offer exceptional future investment opportunities because of their spectacular growth.
The BRIC nations only embraced the concept of forming a group in 2006 when their foreign ministers held an informal meeting on the sidelines of the United Nations General Assembly, and their first formal conference wasn’t until 2009. The (S) was added in 2010 when South Africa was invited to join.
The BRICS’ reason for being, from the start, was their overall unhappiness with the West’s domination of the global order. This included resentment of institutions like the G7 (Group of Seven) an informal “club” of the West’s leading economies, the US Dollar serving as the world’s reserve currency, and what they saw as America’s hegemonistic global role. Their meetings were little more than gripe-fests over global “unfairness,” and their goals seemed mere fantasies: to create their own currency to compete with and eventually replace the US$; to articulate and advocate a non-aligned foreign policy; and to reduce America’s global influence.
Their goals seem less far-fetched today as the group has evolved from symbolism to substance. Starting out, the BRICS represented a mere 8% of the world’s economy vs 65% for the G7. Now it’s BRICS 36% and the G7 at 43%. And the group now holds 42% of global population, including the two most populous countries: India and China. The group has also created two international financial institutions – serving as mini-versions of the International Monetary Fund and the World Bank – to help member central banks swap hard currency in case of need and for members to fund projects. But the most eye-opening development was that at their just- concluded annual meeting, the BRICS admitted six new members: Ethiopia, Egypt, Iran, Argentina, Saudi Arabia, and the United Arab Emirates – from an alleged group of 40 nations seeking membership.
Doubters about the BRICS’ significance make some valid points. Unlike the G7, there is no political commonality within the group, with governments representing rogue states (Iran), dictatorships (Russia, China), absolute monarchies (UAE, Saudi), authoritarian regimes (Egypt, Ethiopia) and democracies (Argentina, Brazil, India, South Africa). They also have differing views of the US and West, from hostility to neutrality to cooperation. In addition, some members have serious disputes with each other: Saudi Arabia vs Iran, China vs India, and Egypt vs Ethiopia. And even their economic policies vary greatly – from strict state control (China) to relatively open systems (Argentina, Brazil).
However, there are also important commonalities. The group now represents some of the world’s major oil producers (Saudi, UAE, Iran, Russia) and consumers (India, China) and four key Middle East nations, where China seeks to increase its influence. And all of the members are keen to see the US dollar lose its vaulted reserve status and America’s influence diminish. But most worryingly, China sees the group as a forum it can dominate and use to elevate itself to a status equal with the US and eventually step up as the world leader. So, while knowledgeable observers may be right that the BRICS are not ready for prime time today, we should not discount its future potential as a global force. When 40 nations are eager to join a group, we need to pay attention.
We know from history, and I’ve seen in my diplomatic career, how America underestimates threats, or even contributes to them - like encouraging China’s rise - before waking up. Today China, and to a certain extent Russia, are eclipsing our influence and eating our diplomatic lunch in many key areas of the world. And we are actively aiding those who want to replace our currency as the world’s reserve by weaponizing the US Dollar through overuse of sanctions. This makes other nations look for alternatives. The Cold War may have been the “bad old days”, but unlike today, we were then adept at using all of our means to advance America’s global interests. Now, we may be the frog in the pot; while the water hasn’t started boiling yet, it’s getting warmer.
Ambassador Tibor Nagy was most recently Assistant Secretary of State for Africa after serving as Texas Tech’s Vice Provost for International Affairs and a 30-year career as a US Diplomat. Follow him on Twitter @TiborPNagyJr
