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19.06.2022 Business Features

What is BRICS Plus and what is the purpose of this new mechanism?

What is BRICS Plus and what is the purpose of this new mechanism?
19.06.2022 LISTEN

Moscow (Russia) June 19, CDA Consult - On May 19 this year China's State Councillor and Foreign Minister Wang Yi chaired a videoconference dialogue between foreign ministers of BRICS countries and their counterparts from emerging economies and developing countries.

This was the first BRICS Plus dialogue at the level of foreign ministers. Participants in the dialogue came from BRICS countries as well as invited countries such as Kazakhstan, Saudi Arabia, Argentina, Egypt, Indonesia, Nigeria, Senegal, United Arab Emirates, and Thailand.

According to Chinese Foreign Minister Wang Yi, the dialogue is of significant importance to further expand cooperation between the BRICS countries and other emerging economies and developing countries.

As a BRICS Plus participant country, Argentina has on several occasions expressed its interest in joining this mechanism. The Argentine president, Alberto Fernández, considered that BRICS represents for Argentina "an excellent alternative for cooperation in the face of a world order that has been working for the benefit of a few."

Understandably some leaders are advocating for multipolar system. Primarily due to geopolitical tensions, rivalry differences and competition to lead the world, Russia is currently pushing an initiative for creating a group.

In June 2022, Russian State Duma (the lower house of parliament) Speaker Vyacheslav Volodin wrote on Telegram that the United States and its allies are destroying economic ties by their sanctions policy, but at the same time creating new points of growth in other countries, as captured by Kestér Kenn Klomegâh, Moscow Special Correspondent, Communication for Development and Advocacy Consult (CDA Consult).

"The move by Washington and its allies to cut the existing economic ties has created new points of growth in the world," he pointed out. According to the parliament speaker, Western sanctions are leading to the establishment of another group of eight nations - China, India, Russia, Indonesia, Brazil, Mexico, Iran and Turkey - that is 24.4% ahead of the old group of developed countries in terms of Gross Domestic Product (GDP) and purchasing power parity.

"The United States, with its own hands, has created conditions for countries willing to build an equal dialogue and mutually beneficial relations to actually establish a new G-8 group with Russia," Volodin noted.

Understandably, there is a Group of Seven (G-7), an inter-governmental political forum, that includes highly developed countries. These are Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. In addition, the European Union is a non-enumerated member.

Its members are the world's largest IMF advanced economies and wealthiest liberal democracies.

According to reports, the group is officially organized around shared values of pluralism and representative government. As of 2020, the collective group accounts for over 50 percent of global net wealth (which is US$418 trillion), 32 to 46 percent of global gross domestic product, and approximately 770 million people or 10 percent of the world's population.

Its members are great powers in global affairs and maintain mutually close political, economic, social, legal, environmental, military, religious, cultural, and diplomatic relations. From 2022, Germany has taken over the rotating presidency of the G-7, following the presidency of the United Kingdom.

Russia dismembered itself from the group. This prompted the U.S. President Donald Trump's reiteration that Russia should be readmitted to the group, instigation of a trade war with China, increased tensions in Iran, Trump's alleged reluctance to attend the conference and a number of international crises made the 2019 G-7 meeting in Biarritz, France the most divided since its inception.

Following Trump's previous rescinding of his signature to a joint communiqué agreed in 2018 due to an alleged slight from Canadian Prime Minister Justin Trudeau, French President Emmanuel Macron agreed that the group would not issue a joint communiqué at the Biarritz conference.

Since then, Russia has remained critical about the group, basing its argument that the G-7 has no relevance to exist as there the members meet at Group of Twenty (G-20).

Similarly to the above argument, if the establishment of another new Group of Eight nations - China, India, Russia, Indonesia, Brazil, Mexico, Iran and Turkey - and compared to BRICS - Brazil, Russia, India, China and South Africa, it follows that BRICS will have to be absorbed by the new Group of Eight organization, and thus pushing out South Africa.

Lucio Blanco Pitlo III, a Research Fellow at the Asia-Pacific Pathways to Progress Foundation, argued that the already established BRICS may have better chances of enticing new members.

The new members could be Argentina, Egypt, Indonesia, Kazakhstan, Nigeria, United Arab Emirates, Saudi Arabia, Senegal, and Thailand that participated in recent consultations.

In fact, UAE along with Bangladesh and Uruguay became the first expansion members of BRICS' National Development Bank (NDB), last September. But the timing makes parties cautious. With no permanent secretariat and a fixed hub, at least the NDB fixed its headquarters in Shanghai, and further establish its regional offices in South Africa (Johannesburg).

As the world is facing massive challenges, it also requires international collaboration and cooperative solutions, importantly not to grossly endanger the economic prospects of poor and underdeveloped countries. Here live millions and millions of impoverished population.

Indonesia is hosting the G-20 summit in Bali this November and is doing its best to insulate the meeting from politics. Whether Indonesia is capable to arbitrate between angry clashing superpowers is simply unpredictable. The chances of a sudden rapprochement between the United States and China – let alone between the US and Russia – are exceedingly low.

Russia and China's strategic alliance is strengthening and China has resisted so many attempts for excluding Russia from international organizations. Both are staunch members of BRICS. On the other hand, China's push for expanding BRICS's roster may alleviate external pressures on its relations with Russia and its own actions in disputed spaces with neighbours.

The author of this article has contacted several experts on this question. But for Dr. Pankaj Kumar Jha, an Associate Professor at O. P. Jindal Global University in Sonipat, Haryana, China and India border conflict will continue influencing BRICS.

However, India and China are cooperating to develop alternate financial structures, cohesive guidelines within Asia and the global south on many issues such as trade, investment and developing an understanding so that dominance of the of west could be reduced to a minimum in global financial architecture, he said and added, "the foundation of cooperation in BRICS brings potential resources and critical development requirements under one umbrella."

Questions about the future of BRICS are bound to be there especially when a new world order is being discussed. Drawing insipration from Quad plus, BRICS countries are also discussing BRICS plus format.

The formation of new grouping G-8 is primarily a fusion of BRICS and VISTA (Vietnam, Indonesia, South Africa, Turkey, Argentina). The formation is primarily to connect BRICS to middle income and middle power countries, according his explanation.

Dr. Pankaj Kumar Jha concluded his argument: "This geopolitical configuration is in exploratory phases, undoubtedly meant to bring a new axis of Russia-China but inclusion of Mexico , Indonesia and Turkey has its own strategic baggage. How much successful this grouping would be is still a matter a conjecture. From geopolitical point of view, much would depend on how sanctions on Russia shapes up and the post-coronavirus recovery of China."

Professor Aslan Abashidze, Head of the Department of International Law of the Russian University of Peoples' Friendship and Member of the Scientific Advisory Board under the Ministry of Foreign Affairs explained to the author of this article that in general, international associations in the form of international intergovernmental organizations or integration associations emerge on the basis of prerequisites that may be of a different nature: political, defensive, cultural, et cetera.

The emergence of such "para-organizations" as the Group of Seven (G-7), the Group of Eight (G-8), and the Group of Twenty (G-20) is associated with the inability of international institutions of the global level to meet the increased needs of modern development in the face of growing challenges in the form of pandemics, financial crisis et cetera.

The invitation and then exclusion of Russia from the Group of Seven (G-7) and similar unilateral restrictive measures of the "collective" West headed by the United States control all institutions of global control, including the International Monetary Fund and the International Bank for Reconstruction and Development, force other states that are not inferior in their raw material, human and intellectual potentials to the United States and the European Union to seek their own development path.

Therefore, it does not matter whether BRICS, or the unification of China, India, Russia, Indonesia, Brazil, Mexico, Iran and Turkey, will be more viable or not.

The main thing is that the process of searching for new models by the states dissatisfied with the United States policy has started, which means the end of the dominance of the United States in all spheres of international relations.

At some point, the West, headed by the United States, will have to negotiate new models of international economic and other relations, based on new international treaties that ensure equality of all states.

According to Professor Abashidze's conclusion is that "until this is achieved at the global level, Russia, China, and India will establish trade relations on national currencies and therefore it will be attractive and beneficial to other states, not only from the Asia-Pacific region but also from Latin America, the Middle East and Africa."

Whether Russia, China, India, and a number of countries, there are arguable variations in political, economic, and cultural capabilities. Russia's President Vladimir Putin last year explained in one of his speeches that after the collapse of the Soviet era, Russia has to begin from the scratch.

It was the ideological confrontation between the West and the East that gave birth to the Soviet era. Lenin spoke about the birthmarks of capitalism, he reminded and added that "It cannot be said that we have lived these past 30 years in a full-fledged market economy.

In fact, we are only gradually building it, and its institutions. Russia had to do it from the ground up, starting from a clean slate. Of course, we are doing this, taking into consideration, developments around the world. After all, after almost one hundred years of a state-planned economy, transitioning to a market economy is not easy."

On other way round, it is necessary to take a closer look at approach, economic capability and the services by the Chinese. China has such a diverse landscape, with investment and trade around the world. According to the World Bank, China has the largest economy and one of the world's foremost infrastructural giants. China is the world’s largest exporter and second-largest importer of goods.

China holds 17.7 percent of the world's total wealth, the second largest share held by any country.

It has the world’s largest banking sector, with assets of $40 trillion, and the world's top 4 largest banks all being in China. In 2019, China overtook the US as the home to the highest number of rich people in the world, according to the global wealth report by Credit Suisse.

It has the highest number of rich people in the world's top 10 percent of wealth since 2019. There were 658 Chinese billionaires and 3.5 million millionaires.

China's Belt and Road Initiative has expanded significantly over the last six years and, as of April 2020, includes 138 countries and 30 international organizations.

Along with Brazil, Russia, India, and South Africa, China is a member of the BRICS group of emerging major economies.

Nearly all the experts contacted for this article have arguable points. They acknowledged the fact that the countries seeking a multipolar system have to address problems of the less developed world. In addition, judging from their lengthy discussions, one key factual description is given - the western dominance and imperial approach of the United States.

These imperialist endeavors aimed at maintaining the political and economic domination of the world's population has created enormous difficulties for peoples globally including the working class, nationally oppressed and impoverished living within the western capitalist countries.

The emerging new coalition group is feasible and coming up at the crucial time when over the last two decades, the United States, Britain, the European Union (EU) countries and their allies globally, have been embroiled in numerous imperialist interventions resulting in destabilization, military interventions, proxy wars and the expansion of western imperialism throughout Africa, Asia and Latin America.

CDA Consult
CDA Consult

News ContributorPage: CDAConsult

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