The emergence of BRICS Plus signifies a movement towards economic freedom from the hegemonic domination of the West
Published Date – 8 March 2024, 11:59 PM
By V Upadhyay
The nature of the world order after World War II was described as bipolar with the United States and Soviet union as the two power centres. The bipolar nature of global politics provided many of the Global South countries which had gained independence from the colonial rules in the late 1940s and early 1950s a space of relative independence from the domination of the global power centres. This period saw the emergence of the Non-Aligned Movement (NAM), and several of the Global South countries were able to pursue policies focusing on their national interests.
The era of bipolarity came to an end with the collapse of the Soviet union in 1991. This sudden, drastic and largely unexpected collapse created a situation of unipolarity where the other superpower, the US, almost instantly acquired the status of the sole global superpower. The US exercised hegemonic domination of the world for about two decades. Nations that had enjoyed a situation of relative independence during the bipolar period lost their autonomy in the new unipolar world.
New World Order
With several Global South countries gaining strength in both economic and military terms in recent years, the phase of unipolarity has ended and a new world order characterised as multipolar is emerging. A multipolar world provides a meaningful space for independent action to powerful nations of the Global South, such as China, India, Brazil, Turkey, Iran, South Africa and Saudi Arabia. These countries are now exerting considerable influence and playing nontrivial roles in all major geopolitical matters.
The BRICS is seen by many Global South countries as a vehicle that has the potential to steer the global order in the direction of multipolarity. India is a founding member of BRICS (Brazil, Russia, India, China, South Africa). At the time of its formation, BRICS had a limited agenda of enhancing investment opportunities between them. With time, however, BRICS has transformed into a major global entity. It is now seen as a counterweight to Western international structures, such as the World Bank, the IMF and the G7.
The BRICS family saw a major expansion at the 15th BRICS Summit in South Africa in August 2023. This year, five new countries joined the grouping, now referred to as BRICS Plus. The new expansion includes three major Middle Eastern nations — Saudi Arabia, the UAE and Iran. Egypt and Ethiopia are the other countries that have joined. With the new members, the majority of the world’s biggest oil suppliers are BRICS Plus countries, giving the grouping enormous clout in the field of energy. The 10-country grouping constitutes 46% of the world population and their share of global GDP (in purchasing power parity terms) is 36%. BRICS Plus
The phenomenal interest in joining the BRICS by the Global South countries is reflective of the deeply held sense of angst and anger in the Global South countries against the Western hegemony in geo-economic and geopolitical affairs exercised primarily through the Bretton Woods organisations like the World Bank and the IMF. BRICS Plus is emblematic of the emerging multipolarity in the world affairs. Like the Non-Aligned Movement (NAM) signified political freedom for the newly independent countries from colonialism, BRICS Plus signifies a movement towards economic freedom from the hegemonic domination of the West. And just as India played a leading role (along with others) in the NAM, it now has an opportunity to play a leading role in establishing a multipolar world order through institutions like BRICS Plus.
Many countries use concepts like multi-alignment or strategic autonomy to describe their foreign policy. However, these concepts are not the same as multipolarity. Multi-alignment or strategic autonomy are concepts that are rooted in the ‘realist’ theory of international relations that are largely focused on national self-interest. Multipolarity, on the other hand, should be seen as an ideology that is opposed to Western hegemony.
In the ongoing Ukraine war, the US (along with its European allies) has made full use of its global economic might to crush Russia economically to the point of a complete collapse. The dollar’s hegemonic status allows the US to exercise near complete control over financial transactions between countries globally. The US imposed the harshest possible economic sanctions on Russia, banned most Russian banks from the SWIFT system (the world’s dominant financial messaging system), and froze $300 billion worth of Russian reserves held in the US and European banks. The Western countries recently issued threats to confiscate these reserves. Many countries in the Global South now realise that they could also become victims of the US’ similar extreme actions if they run into situations of dispute with the US for whatever reasons.
Insulating Themselves
There is now an intense desire by many developing countries including BRICS Plus members to devise means that insulate them from the unilateral actions of the US. In the past few years, many countries have been making attempts towards de-dollarisation of their economies. Central banks around the world are reducing the share of US dollar assets in their total reserves and have been engaged in buying gold in large quantities for several years now. BRICS Plus members and many other countries in the Global South have been making concerted efforts to devise new payment systems that are independent of Western financial structures. These countries are now actively promoting their trade-related settlements with one another in their local currencies without the use of the dollar. Saudi Arabia has indicated it is open to discussing trade in currencies other than the dollar. India has taken several initiatives to internationalise the rupee to reduce dollar dependence. It has signed agreements with the UAE and Indonesia to promote the use of local currencies for cross-border transactions.
In 2024, Russia has taken over the presidency of BRICS from South Africa. There is a great likelihood that many new members will be invited to join the group. There is a possibility of progress towards the evolution of new international financial infrastructure that would be a substitute for the Western-dominated systems like the SWIFT. There is also an expectation that steps will be taken to develop a common BRICS currency that will eliminate, to a great extent, the need for the use of the dollar in international trade and investment flows.
India has, so far, been wary of the idea of a common BRICS currency. But as the recent government statements suggest, it is now willing to study the prospects of a BRICS currency, albeit with certain conditions. This year’s BRICS Plus summit is crucial in this regard because it will be presided over by Putin who is very keen to see rapid progress in this area. Given the size of the 10 BRICS economies, it is now generally agreed that a BRICS currency has the potential to challenge the dollar’s pre-eminence.
It is also hoped that in the coming months, the BRICS nations will be able to work out mechanisms to enhance cooperation not only in dealing with each other but also on matters of great geopolitical significance.
V Upadhyay is S K Dey Chair Professor, Institute of Social Sciences, New Delhi.
