CETRI
Golden Age
The post-World War Two (WW2) Keynesian ‘Golden Age’ saw significant postwar reconstruction and post-colonial development, especially in South Asia.
In 1964, developing countries formed the G77 caucus and created the UN Conference for Trade and Development (UNCTAD) within the UN system.
In 1974, the UN General Assembly called for a New International Economic Order (NIEO) after President Nixon ended the 1944 Bretton Woods international monetary system in 1971.
In 1979, the US Fed responded to Western stagflation by sharply raising interest rates. This triggered fiscal and sovereign debt crises in Latin America and Africa, forcing many to seek IMF emergency funds to cope.
Meanwhile, the Thatcher-Reagan-inspired counter-revolution against Keynesian and development economics led to ‘neoliberal’ Washington Consensus policy reforms, deepening economic contraction.
At New York’s Plaza Hotel, the US got its G7 caucus of the world’s 7 largest allied economies to address its overvalued dollar by requiring the currencies of Japan and Germany to appreciate sharply.
G7-encouraged financial liberalisation, especially the IMF-promoted opening of national capital accounts in the 1990s, increased the frequency and impact of crises.
With its legitimacy at stake following the East Asian, Russian, and other financial crises of 1997-99, G7 finance ministers agreed in 1999 to create a more inclusive G20 grouping of finance ministers of the world’s 20 largest economies.
Soon after the 2008 global (actually Western) financial crisis began, the first G20 leaders’ summit convened in the White House in November 2008.
Making BRICS
‘BRICs’ was coined in late 2001 by then-Goldman Sachs Global Economic Research head Jim O’Neill, referring to Brazil, Russia, India, and China.
Ostensibly to include Africa, the BRICs invited South Africa to join, creating BRICS as a coalition of the five more independent large ‘emerging market’ economies.
Also serving as a caucus within the G20, BRICS has tried to improve international monetary and financial relations. It has since admitted more nations into an expanded BRICS+ with two tiers of affiliation.
To be sure, neither BRICS nor BRICS+ was ever intended to represent the even more diverse interests of the entire Global South. Understandably, it serves its ‘financially significant’ developing economy members.
BRICS and the South
The BRICS promise a world less dominated by the rich and powerful nations of the Global North, mainly in the West.
The world has been dominated by the US since the end of WW2, and especially after the first Cold War. Despite occasional dissent, the US’s European NATO allies seem happy playing second fiddle.
Many developing countries have long felt that existing arrangements do not serve their best interests. The BRICS seem to offer some ‘voice’ and alternative bases for international economic cooperation.
BRICS has undoubtedly strengthened the Global South’s voice and developed new arrangements to support developing country interests, especially to finance development.
The BRICS have also advocated on specific international issues for the Global South. All five BRICS countries have also led developing-country groupings on specific issues with varying degrees of success.
Unsurprisingly, many developing countries appreciate the BRICS role in such matters, with some choosing to publicly align with and even affiliate with it.
However, the BRICS expansion into BRICS+ is unlikely to resolve many problems faced by developing nations due to international power asymmetries and imbalances.
Potential and problems
The diversity of the Global South complicates any grouping’s claim to represent it.
BRICS+ brings together countries with very different political and economic systems, priorities and aspirations, including development goals and interests.
This diversity enhances BRICS’ broad appeal but also makes it difficult to ensure it becomes an effective platform consistently advocating all developing nations’ interests.
This challenge becomes more apparent when the interests and ambitions of weaker developing countries are compared with those of the major BRICS+ powers.
Many vulnerable nations are preoccupied with food security, structural change, deindustrialisation, environmental sustainability, planetary heating, and financialization.
Meanwhile, BRICS members seek to pursue their own strategic interests, garner finance and investments, boost their exports and increase their influence internationally.
Such objectives are not inherently contradictory, but rarely fully aligned. This makes it more difficult to pursue shared interests, advocate collectively, and sustain cooperation.
BRICS+ membership by invitation also limits its effective accountability to the Global South. It is unrealistic to expect BRICS+ to consistently advocate for the full range of concerns of all developing countries, especially the poorest and least influential.
The Global South should undoubtedly try to benefit from the economic weight and voice of BRICS+. But it can best advance its shared interests with its own voice and organised strength via a revived NAM, repurposed for peace, development and justice.
