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WORLD | 09-10-2024 14:07

An expanded BRICS needs to innovate to show its influence

Q&A session with research scientist Mihaela Papa, of Center for International Studies at the Massachusetts Institute of Technology.

Emerging market nations in the expanded BRICS group would see their economic integration boosted by tangible progress on proposals such as developing a payments system and grain exchange for members.  

That’s according to Mihaela Papa, director of research and principal research scientist at the Center for International Studies at the Massachusetts Institute of Technology and co-author of the 2022 book: Can BRICS De-dollarize the Global Financial System?

“With BRICS doubling its membership in 2024, new members are expected to support existing BRICS agendas,” she said in a written interview with Bloomberg News. “A key question is whether they can innovate together.”

The BRICS — comprising Brazil, Russia, India, China and South Africa — expanded on January 1 to include Iran, the United Arab Emirates, Ethiopia and Egypt.

Russia is due to host the BRICS Summit October  22 to 24, just a couple of weeks ahead of a US presidential election that will be crucial for the group’s prospects.

Donald Trump’s ‘America First’ policies align with the BRICS’ vision of multi-polarity and issue-based cooperation, Papa said. Vice-President Kamala Harris would likely continue Biden administration policies such as engaging in economic and security relations with allies and NATO, strengthening the Group of Seven and leading on climate issues, she said. 

The following Q&A accompanies Bloomberg Markets Magazine’s story on how global power is realigning. 

 

How has Russia’s invasion of Ukraine and the subsequent difficulties in enforcing its diplomatic and economic isolation by the US-led G7 shaped the Global South’s view of BRICS since early 2022?

After Russia’s invasion of Ukraine, countries outside the G7 and BRICS faced an uncertain geopolitical environment and sought to manage emerging risks. The core principles of BRICS have resonated with the Global South. The BRICS ‘brand’ is linked to positive economic prospects and growth, as well as the group’s ambition to diversify global leadership, promote development, and modernise multilateral institutions. BRICS has actively engaged Global South countries through outreach efforts, emphasizing non-ideological and mutually beneficial economic cooperation.

BRICS’ risk management credentials have grown since early 2022. Countries in the Global South have observed the freezing of Russia’s reserves while facing the consequences of a stronger US dollar. This led many to question their heavy reliance on the dollar, which BRICS seeks to address. States applying to join BRICS cite reasons like strengthening South-South trade and financial cooperation, supporting multilateralism, and enhancing their global role. While BRICS members have differing views on major geopolitical conflicts, their solidarity and cultivation of non-Western narratives increase the group’s hedging value.  

Although the demand for BRICS membership is high, skepticism about its ideological direction and benefits is also increasing. Argentina has withdrawn, Saudi Arabia is undecided, Indonesia is not ready, and Mexico is uninterested. Additionally, internal concerns, especially regarding human rights, were highlighted by debates over hosting President Putin for the 2023 Johannesburg summit.

 

How would a second Trump presidency and accompanying 'America First' policies influence the BRICS grouping and its prospects for further expansion and cooperation?

The BRICS group cooperates on numerous issues through strategies, working groups, and institutions, making its cooperation internally-driven and self-reinforcing, regardless of the next US president. Although the group could accept all applicants this year, it has paused the expansion of full membership. Russia’s 2024 BRICS presidency prioritises socialising new members and enhancing internal coordination to strengthen the group’s cohesion and economic integration.

A second Trump presidency may seek to revive America First policies based on a more narrowly defined self-interest. However, the current volatile foreign policy environment and major geopolitical conflicts make it harder to disentangle from existing international commitments or relax established economic policies. America First policies generally align with BRICS’ vision of promoting multipolarity, issue-based cooperation, and de-emphasizing alliances. If Trump downsizes US global engagements and exits international institutions, it will test whether BRICS can provide global public goods and reform the system.

 

Significant rivalries among BRICS members — notably China and India — remain a roadblock to closer coordination. What factors could push BRICS members toward closer cooperation and do you see prospects for that happening?

Despite their rivalries, China and India have been deepening their cooperation through BRICS. I co-edited a special section of the Global Policy journal on this topic, which found that the 2020 Galwan Valley clash did not undermine BRICS due to its core principles, consensus-based decision-making, and shared interests, including the New Development Bank. Although the clash strained bilateral relations, BRICS adopted the Strategy for BRICS Economic Partnership until 2025 and accelerated the implementation of the BRICS Counter-Terrorism Strategy later that year. Recently, India has also supported China-prioritised agendas, such as BRICS expansion.

Our BRICS Convergence Index revealed policy convergence of the BRICS states from 2009 to 2021 in finance, industrial development, agriculture, health, trade, and climate change. Close cooperation evolves as each country champions its own issues, leading to significant issue trading where countries support each other’s agendas. External developments also play a role. For example, states experiencing tensions with the West have a strong incentive to pivot toward BRICS, and the group may foster alignment in their collective responses to external developments.

With BRICS doubling its membership in 2024, new members are expected to support existing BRICS agendas. A key question is whether they can innovate together, particularly in developing a BRICS payment mechanism and a BRICS grain exchange, which could catalyze greater economic integration.  

 

The outlook for the G7 and BRICS will be strongly influenced by who wins the US election. What scenarios do you see in the case of a Trump or Harris victory on November 5?

Both Trump and Harris would aim to prevent rising tensions that could lead to World War III and would address trade concerns and national security challenges in the U.S-China relationship. Harris is likely to continue Biden/Harris administration policies, engaging extensively in economic and security relations with allies and NATO, strengthening the G7, and leading on climate issues. However, she will need to clarify her own doctrine on democracy and human rights promotion, especially given BRICS’ efforts to represent the non-Western majority and its growing alignment on Gaza and Palestine’s UN membership. 

Trump’s support for the G7 will likely depend on his perception of its value in handling major geopolitical conflicts and advancing his trade agenda. He plans to abandon climate leadership and likely cut related financial commitments while prioritising bilateral relations with major powers and the Southern border. Trump’s campaign suggests a greater focus on currencies, especially the future of the US dollar and its use in economic relations. He has also advocated for tougher policies on Iran, which is now a member of BRICS.

 

Longer term, do you expect the quicker population and economic growth rates among the BRICS as a whole relative to the G7 to boost its influence on the world stage?

Amid various global development challenges and crises, the willingness of states to invest in institutions like the G7 and BRICS to foster international cooperation is promising. To compare the relative influence of BRICS and the G7, we can use a business analogy in which each entity invests in product quality, differentiation, marketing strategies, and adapts to evolving consumer preferences.

In this context, there is clear differentiation between the two regarding membership and the global norms they promote. The G7 has significantly strengthened over the last four years; however, it has not modernized its membership or innovated its strategic positioning for multipolarity. In contrast, BRICS is a relatively new group facing different challenges. While it has been innovating and expanding, its rapid growth has outpaced its ability to effectively translate economic power into the political influence necessary for reforming international institutions.

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by Malcolm Scott, Bloomberg

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