What is BRICS? Part II

By | October 21, 2021

According to whicheverhealth, BRICS emphasizes its openness to the outside world. China’s historical experience is unequivocal in this respect: In periods of openness, things have gone well, while in periods of introversion, things have gone badly. India opened up around 1990 and is phasing out more and more of its subsidies and safeguards. For Brazil and South Africa, openness is a matter of course. Russia has a mixed history of openness to the outside world, but President Medvedev is among the internationalists.

4: The BRICS and the Bretton Woods Institutions

For the time being, the BRICS will not remove key global and Western-dominated institutions such as the World Bank and the Monetary Fund (Bretton Woods Institutions), but they will require greater voting power and will have a new currency system. In the Monetary Fund, the voting rights of the board are weighted according to the member countries’ contributions. The dollar should be replaced with a scheme that is good for many, not just for one, say the BRIC countries. For example. the importance of the dollar can be reduced by the BRICS countries trading with each other in their own currencies. This is a requirement with enormous potential consequences.

Americans continue to live beyond their means, helped by the ownership of the dominant international currency – the dollar. The United States can print money in its own currency and thus service its debt in a way that no other country has the opportunity to, and the BRICS countries are not alone in believing that this is deeply unfair. The international currency comes and goes with the balance of power. When power shifts go as fast in the BRICS ‘favor as they do now, this American advantage may soon be greatly reduced.

Will the new powers also adapt to the World Bank, the International Monetary Fund (IMF) and the World Trade Organization (WTO) in the longer term, or will they take the lead in an alternative system?

Western countries will “make” the BRICS countries “responsible” by giving them greater voting rights and more important roles in the existing institutions. But all the time it is a goal that the global political economy should be governed by rules that the western countries themselves lay down and by institutions that they themselves lead. Ever since the beginning, the head of the World Bank has been American and the head of the Monetary Fund European . However, it is not easy. If someone is to gain more weight, others must give way, and if it is not the United States, it is the European Union. This is unlikely since the EU is the world’s largest economy (EU 27).

When Strauss-Kahn had to resign as head of the Monetary Fund, there were several non-Western candidates, but in the end, French Christine Lagarde was elected. In general, there is a tendency for the new powers to have less influence than their economic and political weight would suggest. This does not necessarily mean that they will soon be at the forefront of any alternative system, “just” that they are becoming increasingly tough to negotiate with. Despite the growth, they still do not have the economic strength of the West, and their domestic modernization programs are so demanding that they are currently not ready to launch any new economic and political order and run the risk associated with such a project.

5: The world without the West

However, it is not at all certain that integration into the liberal, Western-dominated order, or alternative leadership, are the only possible alternatives. In the last 20 years, regions, countries and peoples have become more closely linked, and this is especially true of the World outside the West. Trade between the 20 largest and richest countries in the east and south is growing significantly faster than world trade, and faster than the economic models would suggest. The economic center of gravity in the world is shifting to the east and south.

Economic growth in countries such as China, India and Brazil does not explain everything: These countries are putting political guidelines on trade for the benefit of each other. They do not cut ties with the West, but they become less dependent on the West. The same applies to direct investments (long-term investments). And for telecommunications: al-Jazeera and al-Arabiya in the Middle East, NDTV in India, Telesur in Latin America and dozens of other national satellite channels and networks allow people to compare what comes from Western media with what their own channels convey .

In cases where the West is self-centered and hypocritical (large gap between beautiful words and actual action), more and more people can register it. The world without the West is increasingly creating its own understanding of reality and thus reducing the West’s power of definition and interpretation . At the official level, the shift in power is promoted by institutional networks that coordinate and stimulate cooperation between members.

Well-known examples are IBSA (India, Brazil, South Africa forum for dialogue), ASEAN (Association of South East Asian Nations), ASEAN plus one (China), ASEAN plus three (China, South Korea, Japan) and Shanghai cooperation organization ( China, Russia, Kazakhstan, Uzbekistan, Tajikistan, with India, Pakistan, Iran and Mongolia as observers). Provoked by George W. Bush, the non-aligned movement has also begun to move again in the 21st century. The majority of the world’s countries were part of this movement, which tried to remain neutral during the Cold War.