(Not just) another BRICS in the wall

These steps taken by the BRICS are the direct outcome of this criticism.

By MICHAEL PEARL-TEPLITSKY
A vendor sells flags in Tahrir Square 370 (photo credit: MELANIE LIDMAN)
A vendor sells flags in Tahrir Square 370
(photo credit: MELANIE LIDMAN)
The new emerging power on the international arena is the somewhat amorphous organization called BRICS, the acronym for: Brazil, Russia, India, China and South Africa. BRICS’s new economic strategy: independence and self-sufficiency as a method of fighting western “soft power.”
These days, when Washington and Moscow compete with each other on who takes the tougher stand in the Ukrainian crisis, one might have a flashback from the “jolly” days of the cold war, when the world was torn between NATO and the Warsaw Pact. However, the fact of the matter is that with respect to these two major players, the Warsaw Pact is long gone and NATO’s strength and unity has hit rock bottom, judging from its failure to find a remedy to its “Ukranian headache.”
The establishment of BRICS was a result of the rapid changes in the global economy, such as the fact that since the fall of the Berlin wall, emerging markets went from holding less than a third of world GDP to over half. According to the recent data of the IMF (International Monetary Fund) report, the combined GDP of the BRICS countries is $16.039 trillion, a figure that puts it at the same level as the economies of the US or the European Union.
Therefore, it is apparent that BRICS’s strength is in its unity.
Only unified can it be an edge in the global “economic triangle,” between the US and the EU. This fact, alongside frequent mutual geopolitical interests, alters this union from a mere economical organization into an alliance with a military tone. This can be clearly seen in its recent unanimous backing of Russia’s takeover of the Crimea peninsula.
The fact that unlike other military alliances, BRICS countries are geographically distant and don’t share the same goals (not to mention having occasional conflict of interests), may raise some eyebrows.
However, the main thing these countries do share is anti-Western agenda, or at least a collision with western interests. For all BRICS member states, the roots of this adversarial agenda are both historical and practical.
Recently, this alliance has begun taking its might one step further.
On its fifth annual summit, BRICS countries agreed to establish a new development bank. The setting up of the bank is planned to finish by the next summit in July this year.
The next step is the announcement on the establishment of a new alternative International Monetary Fund, this April.
The IMF and the World Bank are two international organizations created in the aftermath of Second World War, with the purpose of accelerating economic growth and development, and preventing financial crises in developing countries. However, there is a growing criticism against the policy of these two bodies. The main claims focus on unequal distribution of funds, such as favoring of post-communist European countries over third-world countries.
Moreover, they claim that the West is using these institutions to support its agenda, such as in the case of the IMF assisting the new Ukrainian government (even though it is considered illegal by the BRICS countries) or the World Bank approving a $12 billion loan to India’s adversary, Pakistan.
These steps taken by the BRICS are the direct outcome of this criticism.
The purpose of these newly established institutions will be to create an independent body that with combined resources, will sponsor development projects, tailor made to their needs and agenda.
Besides these far-reaching measures, BRICS countries are also increasing their economic independence by promoting extensive trade agreements among the member states. These efforts to find alternative markets were recently prompted by Russia, when the Western sanctions began to affect its economy. Eventually, these agreements are expected to create a Free Trade Agreement (FTA), similar to the Transatlantic Trade and Investment Partnership between the US and the EU being promoted these days.
These steps are a result of BRICS’s risk management. These countries understand that their threat from the West is shifting from bombs to dollars. NATO’s recent hesitation in the cases of Iran’s nuclear capabilities, Syria’s use of chemical weapons and the crisis in the Ukraine has signaled the BRICS nations that NATO (and the US in particular) is reluctant to exercise its military force and would do almost anything to avoid doing so. However, NATO still holds the sword of “soft power.” It possesses almost 45 percent of global GDP, thus making the possibility of economic sanctions extremely dangerous to BRICS countries (Like the recent sanctions imposed on Russia). Recognizing this problem, BRICS countries are constantly trying to develop solutions for this threat, alongside the growing improvement in their military capabilities.
BRICS countries are determined to become leading players in the international arena and to increase their liberty to exercise domestic and foreign policies without Western interference. Therefore, they are creating their own banking and monetary cooperation institutions to reduce reliance on what they see as biased decision making, and to minimize the consequences of possible economic sanctions.
BRICS is challenging Western hegemony. Time will tell whether or not it will succeed.
The writer is a lawyer and a public diplomacy specialist, who holds a master’s degree in international relations and a bachelors of law degree from the University of Haifa. He formerly headed the University of Haifa Students Union as Vice Chairman and C.E.O.