March
27, 2023
Predictions
about the BRICS countries as the fastest growing economies haven't quite panned
out. Instead, the alliance is now offering a diplomatic forum and development
financing, outside of the Western mainstream. The acronym began as a somewhat
optimistic term to describe what were the world's fastest-growing economies at
the time. But now the BRICS nations -- Brazil, Russia, India, China, South
Africa -- are setting themselves up as an alternative to existing international
financial and political forums.
"The
founding myth of the emerging economies has faded," Günther Maihold,
deputy director of the German Institute for International and Security Affairs,
or SWP, confirmed. "The BRICS countries are experiencing their
geopolitical moment."
Brazil,
Russia, India, China and South Africa are trying to position themselves as
representatives of the Global South, providing "an alternative model to
the G7."
The
G7 is an "informal forum" of heads of state of the world's most
advanced economies, founded in 1975. Germany, France, the United Kingdom,
Italy, Japan,
Canada
and the US are members, as is the EU.
The
acronym BRIC, which initially stood for Brazil, Russia, India and China, was
coined by Jim O'Neill in 2001, when he was chief economist of the multinational
investment bank, Goldman Sachs. At the time, the four countries had sustained
rates of high economic growth and the BRICS label stood for economic optimism
about the future of those nations. Opponents of the label said the countries
were too diverse to be grouped together like this and that it was really just a
Goldman Sachs marketing ploy.
But
what may have started as a marketing ploy to encourage investors, has grown
into a platform for intergovernmental cooperation similar to the G7. In 2009,
the four nations met for their first summit in Russia's Yekaterinburg. In 2010,
South Africa was invited to join the group, adding the "S" to BRICS.
Challenging
the World Bank model
In
2014, with $50 billion (around E46 billion) in seed money, the BRICS nations
launched the New Development Bank as an alternative to the World Bank and the
International Monetary Fund. In addition, they created a liquidity mechanism
called the Contingent Reserve Arrangement to support members struggling with
payments.
These
offers were not only attractive to the BRICS nations themselves, but also to
many other developing and emerging economies that had had painful experiences
with the IMF's structural adjustment programs and austerity measures. This is
why many countries said they might be interested in joining the BRICS group.
The
BRICS bank is open to new members. In 2021, Egypt, the United Arab Emirates,
Uruguay and Bangladesh took up shares. However, these were much lower than the
respective $10 billion investments made by the bank's founding members.
Set
to expand
South
African Foreign Minister Naledi Pandor said worldwide interest in the BRICS
group was "huge."
In
early March, she told television interviewers that she had 12 letters from
interested countries on her desk.
"Saudi
Arabia is one," she said. "United Arab Emirates, Egypt, Algeria, and
Argentina," as well as Mexico and Nigeria.
"Once
we've shaped the criteria [for lending], we will then make the decision,"
she said, noting that the topic would be placed on the agenda for the upcoming
August summit in South Africa.
The
most recent economic developments in BRICS member states have little to do with
the initial myths upon which the group was founded. Of the five members, only
China has achieved sustained and extensive growth since then.
As
China's gross domestic product grew from $6 trillion in 2010 to nearly $18
trillion in 2021, the economies in Brazil, South Africa and Russia have
stagnated. India's GDP grew from $1.7 trillion to $3.1 trillion but was outpaced
by China's growth.
No
sanctions against Russia
Since
the start of the Russian war in Ukraine, the BRICS countries have only
distanced themselves further from the so-called West. Neither India, Brazil,
South Africa or China are taking part in sanctions against Russia. This is
increasingly clear with near-historic levels of trade between India and Russia,
or in Brazil's dependence on Russian fertilizer.
"Diplomatically,
the war in Ukraine appears to have drawn a stark dividing line between an
eastern-backed Russia and the West," political scientist Matthew Bishop
from the University of Sheffield wrote for the Economics Observatory late last
year. "Consequently, some European and US policymakers worry that the
BRICS may become less an economic club of rising powers seeking to influence
global growth and development, and more a political one defined by their
authoritarian nationalism."
The
SWP's Maihold agrees. He says the BRICS alliance is not so much a counter to
the West but more a forum for increased sovereign and autonomous thought. In a
bipolar world, he believes South Africa, India and Brazil were simply
"vying for better terms."
China,
on the other hand, was using the platform for its global political ambitions,
Maihold added, pointing to its offers to mediate the war in Ukraine and the
joint military exercises it held with Russia in South Africa.
Maihold
believes that the West has noticed this change in tack and is trying to
counteract it. "They are looking very closely," he said. "At the
G7 summit in Germany in 2022, they made a point of inviting South Africa and
India, in order to prevent the optics that the G7 was standing against
BRICS."
This
article was translated from German.
Saudi, Iranian foreign ministers to meet during Ramadan
March
26, 2023
Saudi
Foreign Minister Prince Faisal bin Farhan Al Saud and his Iranian counterpart,
Hossein Amirabdollahian, have agreed to meet during the ongoing Muslim holy
month of Ramadan, the Saudi state news agency SPA said on Monday, under a deal
to restore ties.
Both
ministers spoke by phone for the second time in a few days, SPA said.
"During
the call, a number of common issues were discussed in light of the tripartite
agreement that was signed in the People's Republic of China. The two ministers
also agreed to hold a bilateral meeting between them during the ongoing month
of Ramadan," SPA said.
Ramadan
is likely to end on April 20.
Earlier
this month, Iran and Saudi Arabia agreed to revive relations after years of
hostility that had threatened stability and security in the Gulf and helped
fuel conflicts in the Middle East from Yemen to Syria.
Worshippers
pray on the first Friday of the Muslim holy month of Ramadan, in front of the
Dome of the Rock, on the compound known to Muslims as the Noble Sanctuary and
to Jews as the Temple Mount, in Jerusalem's Old City, March 24, 2023 (credit:
REUTERS/AMMAR AWAD)
The deal
between the regional powers, Sunni Muslim Saudi Arabia and long-time rival
Shi'ite Iran, brokered by China, was announced after previously undisclosed
talks in Beijing between top security officials from the two countries.
Analysts
say both sides stand to benefit from de-escalation, as Iran seeks to undercut
US efforts to isolate it in the region and Saudi Arabia tries to focus on
economic development.
Cutting
ties seven years ago
Saudi
Arabia cut ties with Iran in 2016 after its embassy in Tehran was stormed
during a dispute between the two countries over Riyadh's execution of a Shi'ite
Muslim cleric.
The
kingdom also has blamed Iran for missile and drone attacks on its oil
facilities in 2019 as well as attacks on tankers in Gulf waters. Iran denied
those allegations.
Yemen’s
Iran-aligned Houthi movement has also carried out cross-border missile and
drone attacks into Saudi Arabia, which leads a coalition fighting the Houthis,
and in 2022 extended the strikes to the United Arab Emirates.
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