/ 20 June 2023

Poland fiasco highlights need for Brics unity

Brics Currency

There has been a lot of debate about the relevance of Brics (Brazil, Russia, India, China and South Africa) and the capacity for its disparate countries to be able to work together coherently given their diverse cultures, histories, economic muscle and politics. But difference does not preclude cooperation. 

The countries that make up the European Union and Nato — an intergovernmental military alliance between 31 member states, 29 European and two North American — are very different and often disagree on policy and politics, yet they find a way to work together. There is no reason Brics cannot find a way to develop a coherent, collective position that works for all its members. 

South Africa’s membership is often derided due to its small economy. This is not justified. South Africa’s relatively small GDP does not disqualify it from bringing other kinds of value to the table. Brics is not just about economic might it is also about representation and developing a more just and inclusive global order. It is about ensuring that the global south becomes a political voice that is heard and respected, and, ultimately, working to put an end to the long epoch of Western domination. 

South Africa has always been vocal on international issues and the need to restructure the international political and economic landscape at the United Nations, International Monetary Fund (IMF), the World Bank and the G20. This makes the country a politically important player.

Moreover, South Africa remains an important gateway to the rest of the continent, and especially Southern Africa, where there is a wealth of the minerals that are needed for the burgeoning artificial intelligence industries that will ensure that this part of the continent remains globally important.

The current international monetary system ensures that countries’ debt is based on the dollar. This has a negative effect on countries’ domestic monetary policies as fluctuations in domestic markets are caused by the dollar’s performance and the whims of the United States’ central bank. These disrupt the economies of the rest of the world, letting the dollar have more of an effect on domestic monetary policies than domestic policy decisions. This, coupled with the increasing weaponisation of the dollar has seen a growing call to de-dollarise, a project that Brics is well placed to advance. Brics is also committed to wider reforms of the global financial system that is skewed against the countries of the global south.

After this year’s summit, planned to take place in South Africa in August, the Brics formation is likely to expand because more than 19 countries have expressed an interest in joining. These countries include Algeria, Argentina, Egypt, Iran, Mexico, Nigeria, Saudi Arabia, and the United Arab Emirates. The expansion of Brics and the sanctions that have been unilaterally imposed on Russia and its exclusion from the global Swift financial system have lent impetus to the call to de-dollarise.  Since the imposition of these sanctions more and more trade between some global south countries has started being conducted in currencies other than the dollar. The Chinese currency, the renminbi (RMB), has become the currency of choice for some transactions by Brazil, India, Iran and Saudi Arabia. 

The current Brics countries account for 40% of the global population with more than three billion people and a GDP that is greater than that of all the G7 countries — North America, France, Germany, Italy, Japan and the United Kingdom — combined. Brics has the largest foreign currency reserves of $4.4 trillion, making up 17% of all global trade. 

South Africa’s membership of Brics, especially as it relates to the new countries that want to join the grouping, has been criticised and South Africa said to want to be in the company of despots and tyrants. Even the head of South African Reserve Bank’s  financial stability department, Nicola Brink has been quoted saying: “Our membership of Brics and bilateral political engagements add to the complexity of maintaining a convincing neutral stance.” But similar questions are seldom asked of the standing of any Western country that is a member of Nato despite all the violent destruction and heartache that organisation has been party to.

Instead of criticising Brics you would think that our Reserve Bank would be excited about the opportunities that its growing power would bring for the country. After all, if the project to reform the global financial system has some success our Reserve Bank would not have to stand in front of South Africans and tell us that our economy will only grow by 0.1% and that, despite this, they must still increase interest rates.

Participation in Brics would place Pretoria, and the rest of Africa, among the world’s fastest-growing economies. With our raw materials and young labour force the continent needs to develop its own industries and use the advantage that it has in natural resources to set the pricing in those markets. Having the support of a strong Brics would be a significant advantage in this endeavour. Situations such as the one that happened this past weekend when South Africa’s sovereignty was disrespected in Poland would be a thing of the past. No matter what documentation the South African delegation might have been missing there is no justification for them being held on a tarmac for 26 hours. It is unimaginable that any Western country would have received such treatment.

Participation in Brics would help Africa to attend to the inequality that besets most societies on the continent, the high rates of unemployment and the debilitating poverty. A strong Brics with the attendant New Development Bank which, unlike the IMF and World Bank, is willing to lend to countries in their own currencies, would be more willing to assist Africa allowing it to leverage its position economically and politically.

Some critique of Brics is aimed at undermining the grouping and ensuring that it doesn’t get support from the populace of member states and those wanting to join it. Brics is often cast as a grouping of autocrats. There are some autocrats in the project, but the most significant democratic leader in the global south, Lula da Silva, is also part of the project. 

Moreover, the allegation that Brics is complicit with autocracy is hardly one that the West has the moral standing to make. For the West even outright tyrants are considered allies when they are acting in concert with its wishes. Take Saudi Arabia, a highly repressive state. During his campaign US President Joe Biden said that he would make the kingdom a pariah, but he was on television in 2022 fist bumping Crown Prince Mohammed bin Salman. Two weeks ago US Secretary of State Antony Blinken was in Saudi Arabia to mend fences. This past Sunday he was meeting his Chinese counterpart and President Xi Jinping on Monday to try to reset and stabilise the US’s relationship with China. Yet Africa is being warned by Washington against developing stronger relations with Beijing. Double standards in global politics need to be called out. It simply can’t be acceptable for the West to embrace repressive states and morally outrageous for countries in the global south to make tactical alliances with states that are not liberal democracies.

The wailing critique of Brics and South Africa’s membership of it is driven by fear that a strong, expanded and united Brics would be a threat to US and Western hegemony. The irony here is that the US and its allies have been partly responsible for the resurgence of Brics because of the way the dollar has been used to fight geopolitical wars. Under these circumstances the ambition of building a multi-polar world makes perfect sense for many states in the global south across the political spectrum, including democracies like Lula’s Brazil. 

In an environment where a shrill pro-West chorus has inordinate power in our public sphere and unilateral international decisions are taken by the West with calamitous consequences for whole nations and regions, there is bound to be a counter project. For the first time in a long time the global south has a cohort of leaders, in and out of the current Brics membership, that is trying to stand up and change things. This should be encouraged and supported.

Nontobeko Hlela is a researcher for South Africa’s national security adviser. She writes in her personal capacity.

The views expressed are those of the author and do not necessarily reflect the official policy or position of the Mail & Guardian.