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How Putin's war turned the economic conference into an alliance against the West

Russia's ties to Cyril Ramaphosa's ANC party date back to Soviet involvement in the apartheid movement Photo: Sergei Chirikov/Pool EPA

South African President Cyril Ramaphosa faces an uncomfortable diplomatic puzzle.

Two months after he invited Vladimir Putin to a summit in Johannesburg this August, the International Criminal Court issued an arrest warrant for the Russian president for war crimes in Ukraine. If Putin arrives in South Africa, Ramaphosa will be required to lock up his guest.

South Africa has since announced that dignitaries who attended the BRICS meeting will be granted diplomatic immunity, which could secure legal release from custody. the arrest warrant.

Ramaphosa's attempt at a legal gymnastics shows how the BRICS bloc — Brazil, Russia, India, China and South Africa — is becoming an increasingly significant alliance against the West after Putin's war.

The Alliance should become a much more geopolitical heavyweight.

The foreign ministers of the five countries met in Cape Town last week ahead of the August summit. They were joined by their counterparts from a number of other countries, including Saudi Arabia, which has applied to join the bloc.

Another 18 countries have expressed interest in joining.

In addition to expanding its membership, the alliance is also discussing plans to introduce a cross-border currency for the BRICS countries.

The foreign ministers of the five BRICS members met in Cape Town as the bloc gains more geopolitical importance. Photo: RODGER BOSCH/AFP

Over the past year, the bloc has shown renewed enthusiasm for policy development, says Kobus van Staden. Senior Fellow in Foreign Policy, South African Institute of International Affairs.

“It was prompted by Russia and China and, in particular, the need to try to find these alternative trade spaces that go beyond Western norms and, in particular, Western sanctions,” he says.

“The conflict in Ukraine dragged out the BRICS got into an aggravated conflict with the West. This dragged BRICS members, who may not have wanted to get involved in this fight, into some kind of positioning with Russia,” adds van Staden.

Bloc members do not necessarily approve of the war, but are increasingly siding with Moscow.

For example, India and China buy Russian oil. Celso Amorim, a foreign affairs adviser to the Brazilian president, told the Financial Times last week that Russia's concerns about Ukraine needed to be «taken into account.» this is the statement they make in the West. «[They say] 'we're the big guys in this business, whereas in all other global organizations you basically treat us like your puppets.'»

The bloc began life as «BRIC,» an acronym first coined by O'Neill in a 2001 article for Goldman Sachs, when he identified four rapidly emerging markets—Brazil, Russia, India, and China—that would become defining players in the global economy. arena.

Importantly, O'Neill called for greater representation of these countries on the world stage to reflect their growing economic importance.

He argued that the EU should have one joint seat at the G7 table, rather than individual representation of Germany, France and Italy, and instead include China, Brazil and Russia — and possibly India — to expand the group up to eight or nine.

That didn't happen. Instead, the BRIC countries formed their own formal union in 2006, adding South Africa in 2010.

group of G7 countries for emerging powers, such as the BRICS countries, never gained momentum. Photo: MINISTRY OF FOREIGN AFFAIRS OF JAPAN

“We have the G7 and then the BRICS is kind of a G7 for the developing world and as time goes on there is some kind of confrontation that doesn’t really help with any truly global issues,” says O’ Neil.

“Certainly, the point is that each of these participants sees their own interest in diplomatic firmness and refusal of public support for the West.”

BRICS is a bloc with “excessive emphasis on symbolism,” adds O'Neill. But symbolism and identity politics are the determining factor in world politics.

If the BRIC countries had been included in the G7 20 years ago, it is quite possible that there would be no war in Ukraine today, he suggests.

These countries united because they were ignored by the Western system. The bloc is now positioning itself as an alternative geopolitical force as tensions escalate with Western powers.

“Most of these maneuvers are related to Russia and China. China is generally concerned about the sanctions,” says van Staden. It needs alternative trading partners that won't make demands of common human values, he adds.

The war also ignited long-standing resentment against Western power structures.

“I don’t think some of the other BRICS members are burning with the desire to get into a fight with the West right now, but such a conflict does reflect a wider discomfort with this old annoyance they feel about aspects influence of the West in the global system. says van Staden.

Whether or not the number of BRICS members is expanding, the BRICS countries are becoming more and more powerful players on the world stage.

At the turn of the century, China's economy, measured in US dollars, was the equivalent of just 12% of US GDP, says Kevin Daly, managing director and senior economist at Goldman Sachs. Now it costs about 80 pc.

In 2000, China was the world's sixth largest economy in dollar terms, behind the US, Japan, Germany, the UK and France, according to Goldman Sachs analysis. In 2022, China was the second largest economy and India was the fifth.

India's economy overtakes UK

China will be the world's largest economy by 2050, analysis shows. By 2075, the US will remain the only Western power remaining in the top five, sandwiched in third place between China and India in first and second, and Indonesia and Nigeria in fourth and fifth. The UK will take 10th place.

“There has already been a shift in economic gravity away from the West and in particular towards Southeast Asia. This is where you have a much larger share of the world's population and economic development,” Daly says.

South Africa has joined the BRICS, not the West, because it knows there is a ceiling on what it can do with the latter, says van Staden.

«There seems to be a certain limit to what these countries can expect from Western institutions,» he says.

While Europe is an important trading partner for South Africa, it has little scope for expansion.

“There is a perception in Africa that there will not be some new macro-trade regime that could radically change the amount of goods they can export,” adds van Staden.

“The agrarian lobby is very powerful in the EU, it is already structurally limited. This is not the case for China.”

While BRICS is fraught with its own power struggle, O'Neill says, the bloc's potential is enormous.

“China and India almost never agree on anything. If they could, we would probably see much more significant changes in the world system as we know it,” he adds.

China under Xi—a map of the belt and the road

If China invites India, for example, to help develop part of its Belt and Road strategy, the global power dynamics will change dramatically, O'Neill says.

“The transformation for global, especially Asian, trade would be truly monumental,” he says.

If Saudi Arabia, the world's largest oil-producing country, joins the bloc, that could also have major repercussions for the dollar's dominance of world trade.

«It could go considerably fast,» says van Staden. But the BRICS do not yet have the infrastructure to challenge the dollar, he adds.

Despite all the geopolitical turmoil that Putin has provoked, he will most likely not attend the August summit: the Russian president will be too scared to go, says Anders Åslund, chairman of the advisory board of the Center for Economic and Social Research, who has been an adviser to previous presidents of Russia, Ukraine and Kyrgyzstan.

“I'm afraid. convinced that Putin will never go abroad again, because he is not ready to take such a risk,” says Åslund.

«He travels in an armored train between his three main residences, and in order to talk to him even now, you need to spend a week in quarantine due to his Covid paranoia.»

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