Are the BRICS Building a Non-Western Concert of Powers?
A decade after the Kremlin pinched the BRICS idea from Goldman Sachs and reinvented it as a diplomatic club for emerging regional powers to challenge Western dominance of global economic institutions, the skeptics have been proven wrong. These BRICS are not made with straw and have not fractured from their considerable diversity or economic ups and downs. This week’s gathering of the leaders of Brazil, Russia, India, China, and South Africa for their 7th BRICS Summit in Ufa, Russia shows more than the fact that Russia is not isolated by Western sanctions. This summit marks the transformation of the BRICS club into a nascent non-Western concert of major powers that focuses on their priorities, not those of Washington or Brussels. Concerts are known to involve deep international cooperation among major powers, but they are distinct from alliances and don’t eliminate competitive power politics.
The BRICS will now be bolstered by their own institutions that are intended to operate parallel to the U.S. led order created at Bretton Woods in 1944. On July 7, 2015 Russian Finance Minister Anton Siluanov, in his capacity as the new Chairman of the Board of Governors, convened the inaugural meeting of the BRICS New Development Bank (NDB), led by an Indian president, a Brazilian chairman of the board of directors, and five vice-presidents from each of the BRICS countries. All possess extensive international experience; some have held prominent positions at the International Monetary Fund (IMF) and World Bank. NDB operations will then shift to Shanghai, the bank’s home port, reflecting China’s role as the new anchor of a club that serves simultaneously to advance and shield its rise. China is more than one and a half times the size of the other BRICS combined but so far Beijing has not been overbearing, conceding to equal shares and rotating leadership positions in the NDB, in contrast to its new Asian Infrastructure Investment Bank (AIIB) in which China controls the largest number of shares at 26 percent. At best, the BRICS, the AIIB, and the “One Belt, One Road” initiative, meant to connect Asia by land and sea, loosely form part of a developing larger strategy to secure China’s geoeconomic interests and cement its position as a global power.
Paradoxically, China and the four other BRICS have benefited from participating in Western economic institutions. Yet, they are keen to build their own capacity to serve their development needs which they see as often neglected or adversely impacted by advanced countries’ policies. They accept the value of emulating many best practices and international standards, such as a transparent regulatory framework and creditworthiness for the NDB. At the BRICS Academic Forum held in May, a vice president of the research arm of the China Development Bank, who has also been a visiting scholar at the World Bank, cited Western estimates that the gap between the demand for infrastructure investment and available funds is about $1.5 trillion annually. He suggests that the NDB will emphasize loans and infrastructure investment in developing countries across different continents, and that both the NDB and AIIB could learn from the experiences of the World Bank. The recent flap over a harshly critical World Bank report on China’s financial system doesn’t diminish the value of such interaction, but shows how public criticism may fuel backlashes from powerful vested interests and cause authoritarian governments loss of face. Moreover, although the NDB and AIIB undoubtedly seek good ratings and a return on investments, it is unlikely that they will be totally divorced from Chinese and other BRICS’ geoeconomic interests, any more than the World Bank and IMF are from American and European compelling priorities.