April 20, 2023
Brazilian President Lula’s recent visit to China brings the BRICS back into the spotlight, but the seeds for multipolarity were planted years ago. This week, Brazilian President Lula da Silva’s trip to Beijing reinvigorated the discussion of multipolarity and distributed alternatives to Washington’s economic dominance. Despite broader rhetoric on reducing the role of Western-dominated financial institutions, what Lula really wants from China is investment to help rejuvenate Brazil’s industrial sector. When Lula speaks of multipolarity, as he has done for decades, he means that his country wants options. And China offers finances without many of the regulatory restrictions imposed by the European Union or Washington.
The concept of the BRICS – Brazil, Russia, India, China, and South Africa, was originally coined by members of the US financial industry for the purpose of spotlighting investment opportunities. But thus far, the group has struggled to fully live up to its potential- the Brazilian economy contracted last year, China suffered economic fallout from its zero-Covid restrictions and Evergrande crises, South Africa’s economy contracted more than expected in late 2022 due to its failing power grid limiting industrial growth, and India’s economic growth is also anticipated to decrease in the near term. Russia, of course, is locked in an expensive and self-destructive war with no end in sight.
The BRIC countries, aware of their growing potential, held their first formal summit in Russia in 2009, and the concepts that the group discussed then were close to what they are now. The group still wants alternatives to the US Dollar and over the years has been inching towards this goal. BRICS members have increased the use of their own currencies when trading with one another and jointly established the New Development Bank in 2014- as a hopeful rival to US-dominated institutions like the World Bank. Since 2022, Russia, under sanctions, has also been advocating to create a common currency among BRICS members.
Although challenging the dollar’s hegemony has been a consistent BRICS theme, so long as the United States remains the dominant global economy, there isn’t much of a credible alternative. The group’s potential collaborative financial prowess is also impeded by a deep-seeded China-India rivalry. Further, over the decades of leadership, Washington has gained unique insights and refined its financial policies, whereas China is new to the challenges of being a global lender. What has quietly been sowed over the course of the BRICS years, however, is the investment that China and Russia have made throughout the developing world- including a concerted propaganda effort to present the West as responsible for all global financial and geopolitical woes.
Both China and Russia have looked to Africa for investment opportunities, but their efforts have been weakened by Russia’s war on Ukraine. In Africa, Russia has been diligently presenting itself as an alternative to the West for security cooperation, energy, and natural resource exploitation for years. It’s also been actively curating local media to shamelessly present its invasion of Ukraine as an act against Western dominance. With the upcoming Russia-Africa summit to be held for the first time post-Covid, battle-torn Russia will try to further reap the political rewards of its ongoing investment efforts. But Ukraine has fully commanded Putin’s attention and he doesn’t have as much to offer as in previous years.
China has also invested heavily in infrastructure throughout the continent via its Belt and Road Initiative. So far, this seems to be a double-edged sword, particularly as myriad loan recipients are suffering from the economic reverberations of Russia’s war. Chinese policies to maximize debt repayment have turned ugly in places like Sri Lanka and Zambia, with China ostensibly afraid that it will lose too much from some of its riskier investments. This struggle could ultimately play out with China deciding to collaborate with multilateral financial institutions or, more likely, doubling down on its own strategy.
As the BRICS are set to meet for their 15th annual summit this summer in South Africa, the group is expected to discuss expanding its membership, with countries like Algeria at the forefront. Putin has also reportedly accepted the invitation to attend the summit, but as South Africa is a signatory to the Rome Statute and is required to comply with the International Criminal Court, it would be expected to arrest Putin should he step foot within its territory. The topic is already making waves within local South African media, and it’s uncertain exactly what will happen. What’s clear, however, is that while Putin has invested heavily to control the narrative in Africa, his ongoing invasion of Ukraine is likely to challenge his alliances.