Why Does Russia Need BRICS?

19 march 2015

On the Way Towards a New World Order

Georgy Toloraya is a professor, Director of the Center for Russia’s Asian Strategy at the Institute of Economics, Russian Academy of Sciences. He holds a Doctorate in Economics.

Resume: The BRICS can serve as a locomotive for Russia’s geopolitical rise in the 21st century. This development will not necessarily imply a deterioration of relations with the West, which would be almost inevitable if Moscow were to face it alone.

A veteran diplomat told me in a private conversation recently, when we were discussing Russia’s foreign policy priorities, that the BRICS (an association of Brazil, Russia, India, China, and South Africa) was nothing more than a “photo opportunity” for its leaders and politicians, a kind of window dressing aimed at demonstrating “the failure of attempts to isolate Russia internationally.”

His arrogant and habitually skeptical tone with regard to the BRICS was nothing new. Very many politicians and scholars criticize and debunk the association as artificial and existing only in theory, with no prospects and even harmful. It is understandable why the West tries to belittle the role of this grouping. Part of the Western establishment views the BRICS as an emerging alliance of its competitors who, on top of that, are grouping around China and who can challenge the United States and the rest of the West on basic parameters of the current world order. Others view the BRICS as a group of countries of the South intended to oppose the North and therefore impinge on the basic interests of developed countries as regards access to resources and markets.

These commentators are guided by the zero-sum game logic and simply ignore the fact that this association can achieve its goals only in cooperation, which will benefit the West too, rather than in confrontation. BRICS members emphasize this at every opportunity.

Many studies and publications analyze problems and differences pertaining to the BRICS. For example, Ruchir Sharma wrote in Foreign Affairs that “no idea has done more to muddle thinking about the global economy than that of the BRICs.” Authors argue (not without reason) that association members are very much different, there are serious disagreements between some of them (above all, between India and China) and that there are conflicting interests between producers and consumers of raw materials within the BRICS. Some analysts still use the canons stated a decade ago (when the term “BRICS” was coined by Jim O’Neill) and describe the association only as a cluster of advantageous investment markets. And since this is no longer the case now, some authors even speak of the association’s imminent decline. Indeed, economic problems in the member countries are solved slowly, and in some of them, such as Russia, they become even more acute; their international competitiveness is not growing, and the countries are facing political and social problems.

Unfortunately, many pro-Western Russian experts share this point of view. And by so doing they fall into the trap of imposed ideas that there is no alternative to the liberal model of globalization and that Russia does not belong among underdeveloped countries which will only pull it backwards or even erode its identity. Russia, it is claimed, should make concessions to the West and merge with “the advanced civilization.” The opposite view claims that there is no place for a weak Russia in the group of fast-developing Asian giants and Brazil.

These arguments cannot be accepted, especially as one views the association’s progress from the inside. If steered properly, this global association built on the principles of equality will become a powerful factor and bring much benefit to mankind and Russia, primarily by giving them a chance to prevent an emerging global conflict. But will the leaders of the five countries have enough skill and determination for that? And will the West put up with such a prospect?

BRICS TODAY

There is more than enough information about the BRICS’ activities and plans; however, some cannot see the forest for the trees, being unable to get the full picture behind details of various projects and lengthy declarations. The BRICS today is not only summits but also regular interaction in more than two dozen areas ranging from trade and finance to security, health, and agriculture. Its member countries draft and sign documents on cooperation which is progressing, albeit at different speeds. The main areas of BRICS activities, where real results can be achieved, include reforming the monetary/financial system, ensuring compliance with the rules in trade/economic relations, developing mutually complementary economic cooperation,  maintaining global stability, and supporting the role of international institutions and international law. At the next stage, they could influence  the global agenda, create mechanisms for maintaining security and settling conflicts (with the United Nations playing the central role, of course), and facilitating inter-civilizational interaction.

At their latest summit in Brazil last summer, the BRICS member countries signed agreements to create a $100 billion New Development Bank and a reserve currency pool worth an additional $100 billion. The agreements drew much public attention as a visible example of joint efforts to create independent global structures, which had not happened for a quarter of a century. It would be an exaggeration to say that these institutions can serve as an alternative to the IMF and the World Bank. To work properly, they must interact with established organizations. But it is also true that when the new mechanisms become fully operational, they will allow the BRICS to implement major global projects on its own. Until now, at least after the Soviet Union’s break-up, this was the prerogative of the United States and the “collective West.” China has begun to try on this role only recently.

In the course of its nonlinear evolution the BRICS is becoming not only a geo-economic but also a geopolitical group, with its members leading the way in repartitioning the world. Of course, these countries belong to different political systems, use economic development models and have different civilizational identities. But they have never sought to make themselves uniform. The purpose of their association is to change the geo-economic and geopolitical systems shaped in the second half of the 20th century.

Global governance mechanisms created after World War II (the United Nations, the Bretton Woods system, and even the GATT/WTO) are losing their effectiveness. The global economic model based on the dominance of financial capital and market fundamentalism is becoming obsolete. The “anti-hegemony” attitude is growing stronger, and not only in the developing world. However, too many factors – ranging from the technological and social backwardness of the East to deliberate sabotage by the West – impede this process.

The world is witnessing the fragmentation of international security, bloc mentality, double standards, and the regionalization of economic life. The crisis of the EU will hardly lead to its collapse; rather, it will cause it to reset European integration (possibly, in a smaller format). The United States’ financial problems should not overshadow its strong real economy and its innovation potential, which is unique to the contemporary world. Washington’s hard line to prevent a weakening of its positions is backed by military power, the threshold for using which seems to be lowering.

But can resistance change history? The balance in the world is changing anyway, and the centers of power are shifting. In fact, this has been the history of mankind since the formation of nation-states. Now we are witnessing the emergence of not just a polycentric but a multiplex structure of international relations. This structure is multi-layered and involves many state and non-state actors. Yet, states still play a prevailing role, and it is not ruled out that a group of countries will form one of the poles of power.

As Russian researcher Andrei Vinogradov wrote, the BRICS countries “represent not just different socio-economic models but different civilizations. [...] The globalization has brought them together and endowed them with new functions, also making them major actors of international relations. […] The historical responsibility of a civilization is much higher than political responsibility inherent in states.”

Does the BRICS oppose the West? No, it does not. Multi-civilizational cooperation does not imply excluding or ignoring one of the world civilizations, especially if it is the leading civilization today. All BRICS countries in one way or another view Euro-Atlantic values and lifestyle as an example to follow (naturally, adapted to local conditions) and understand that it is impossible and unreasonable to destroy the established financial and economic architecture. It is crucial that to all of them Western states are the main source of technologies and investment and the main market for export. This is especially true for Russia which, for all its specificity, is part of the Judeo-Christian paradigm.

Some people criticize the BRICS for its star-like structure centered in Beijing, with which each country has more extensive ties than with each other. On the other hand, the entire global economy is centered around China. Perhaps, it is destined to play the leading role in the BRICS simply by virtue of its economic power. It is no secret that the planned overhaul of the global financial and economic system to reduce unilateral benefits for the West implies benefits primarily for China. The latter has set itself the task of becoming by mid-century a “rich, powerful, democratic, civilized and harmonious modern socialist state,” that is, a world economic leader. But politically China does not seek (at least, for the time being) dominant positions in the group, understanding that not only Western countries but also the other BRICS members will disagree to accept a Chinese plan for reorganizing the world, and this would ruin the association. On the contrary, let’s be frank, without such a “controlling mechanism” as the BRICS, Beijing would be much freer in its actions and would need less to heed the interests of its partners.

But to what extent are the BRICS countries ready to act together, considering the differences between them and the relatively short history of their association? Current tendencies within the BRICS are centripetal: the interests of the five countries more often coincide than diverge. They have comparable technological levels and similar weight in world politics and economy. They all seek to change the existing rules on the world stage and stay committed to the primacy of international law. Obviously, the association will never become a military alliance like NATO as the core of the “collective West.” The North Atlantic Alliance is based on the United States’ harsh diktat, whereas the founding principles of the BRICS are different: dialogue among equal states.

TASKS FACED BY BRICS

The BRICS is now largely an elitist project based on political will. But it should not be simplified or viewed as “anti-Western.” The BRICS has ripened as an instrument aiming not to oppose but assist the establishment of a fairer balance of power in the world that would take into account the interests of all countries – in contrast to the second half of the 20th century marked by obvious dominance of the West in politics and economy.

Economy is now the main area of interaction within the BRICS. Naturally, economic problems affect the aggregate power of its members, but the need for collective action only increases. Particularly important today are consolidated positions within the G20 (a kind of world government), and this unity should be valued. The most important goal for the BRICS to pursue is to change the international monetary/financial model, including the creation of a more representative, stable and predictable system of international reserve currencies, and reform the IMF (such proposals have been openly opposed by the U.S. and blocked by U.S. Congress in a recent vote).

Economic ties among BRICS members have so far been asymmetrical. But the organization seeks to improve partner relations in the areas of monetary and financial cooperation, settlement and payment mechanisms, banking, investment, and the creation of joint rating institutions.

In addition to economic and environmental issues, the BRICS agenda now and then includes security and international stability. And even if the member countries’ points of view do not coincide on all issues, as was the case during the crisis in Ukraine, the BRICS is an alternative platform, as opposed to Western-centric ones, for discussing the prospects of geopolitical evolution.

In the coming years, the BRICS will focus its efforts on improving interaction among its members, building its organizational frameworks, and strengthening its positions in the world. Russia’s conceptual documents set the goal of gradually turning the BRICS from an informal dialogue forum and an instrument for coordinating positions on a limited number of issues into a full-fledged mechanism for strategic and current interaction. This will radically change the association’s position in the system of international relations.

The project’s success will depend on whether or not it becomes an incubator for a new global socio-economic strategy. The combined intelligence of BRICS members should produce an alternative model for human development. This would be a new paradigm that would meet the need for sustainable development, a kind of “new capitalism.” Like traditional capitalism, it must be based on private property and competition, but it must also have social and environmental constraints. This concept will have to overcome conflicts inherent in the existing model and ensure a much more equitable distribution of wealth among classes and territories on the basis of sustainable development indicators.

The historical mission of the BRICS as a new community of countries and civilizations is not to oppose the West within the existing system but to propose a new ideology for human development that will meet the demand for sustainable development.
 
RUSSIA’S CHAIRMANSHIP OF BRICS

In April 2015, Russia will take over chairmanship in the BRICS. In July, the BRICS will hold a summit in Russia’s Ufa. Some people may say with a bitter smile that Russia has nothing left except the Shanghai Cooperation Organization and the BRICS, and then complain about Russia’s increasing orientation towards China.

The reality is much more complex. Now that Russia’s relations with the West are strained, its membership in the BRICS gives it a chance to take a worthy place in the system of global governance and to use this factor for its own modernization. The BRICS can serve as a locomotive for Russia’s geopolitical rise in the 21st century (in contrast to the downward tendency at the end of the 20th century). This development will not necessarily imply a deterioration of relations with the West, which would be almost inevitable if Moscow were to face it alone. For Russia, such a conflict would be devastating. But other BRICS members can help to avoid it.

The association’s formation was prompted by the 2008 financial crisis. That is, this phenomenon came into being shortly before the moment of truth arose in relations between Russia and the West when Moscow rebelled against attempts to ignore its interests and to put it into a subordinate position. Yet the creation of the BRICS was not accidental as it was consonant with Russia’s policy, pursued since the mid-1990s, towards building a multipolar system that would “realistically reflect the diversity of the contemporary world and its interests.” One should give credit to Academician Yevgeny Primakov who proposed the idea of ??a Russia-China-India triangle, from which the BRICS emerged as a geopolitical reality.

Soon the BRICS began to play an increasingly important role in Russia’s foreign-policy strategy. In 2006, President Vladimir Putin proposed establishing closer ties among the initial four BRIC states (Brazil, Russia, India, and China). After Dmitry Medvedev took over the presidency, the “club of emerging powers” was taken to the highest level of heads of state and government. Putin’s article, published on the eve of the presidential election in 2012, said that Russia would continue to give “high priority to interaction with BRICS partners” because this unique organization “best symbolizes the transition from a unipolar system to a fairer world order.”

These ideas were codified in Russia’s Foreign Policy Concept of 2013 and in the Concept of the Russian Federation’s Participation in the BRICS, approved by the president on February 9, 2013. The Concept says, in particular, that the emergence of the BRICS came as “one of the most important geopolitical events since the beginning of the new century” and that it reflects the objective tendency towards the formation of a polycentric system.

What focal points in the BRICS agenda are most advantageous for Russia (naturally, with due regard for the interests of its partners)? According to strategic documents, by participating in the association Russia wants to achieve the following goals:

  • making the international monetary and financial system fairer, more stable and more effective;
  • ensuring peace and security on the basis of respect for the sovereignty and territorial integrity of other states, and non-interference in their internal affairs;
  • consolidating the multivector nature of its foreign policy;
  • developing privileged bilateral relations with other BRICS partners;
  • broadening its linguistic, cultural and informational presence.

Russia should work hard to promote dialogue and coordinate, wherever possible, its positions with other partners on issues pertaining to the inadmissibility of unilateral sanctions, to the strengthening of the role of international law and global institutions, including the central role of the U.N., strategic stability, regional security, the settlement of regional conflicts and the maintenance of regional stability. Together with the other BRICS members, it should press for the reform of the international monetary and financial system. And it should not fall into despair if things do not go smoothly due to other partners being too cautious.

Russia should make a realistic and sober evaluation of efforts within the BRICS to develop trade and investment cooperation on a multilateral basis, and the pros and cons of establishing free trade zones and trade alliances and forming regional integration groups. It should find its own niches for cooperation with other members in various economic sectors and consider creating a technological alliance with them. Jointly with other members it will also have to address issues pertaining to the association’s development, including organizational matters, and form infrastructure for inter-civilizational interaction, including at the level of civil society.

Important tasks facing Russia as BRICS chair include:

  • strengthening interaction with the other BRICS members within the G20;
  • jointly developing and coordinating a policy to reform the global financial and economic architecture;
  • coordinating positions on major issues in the U.N. and other international organizations, especially in the IMF;
  • broadening ties within the BRICS, especially in science and technology;
  • giving priority to these countries in foreign-economic relations;
  • promoting the idea of creating a network of interacting regional integration associations (to be led by these countries) on four continents; and
  • putting forward initiatives to institutionalize the BRICS (secretariat, and an interstate and expert interaction network).


POTENTIAL OF EXPERT VISION

The association is, in a way, a product of intellectual efforts of analysts, scientists and experts. Research, which includes the analysis of the association’s strategy and tactics, expert consultations, and the formulation of proposals and recommendations for the leaders of the member countries on how to develop and improve the association’s work, may be even of greater importance to the BRICS than to other, earlier established alliances. It should be noted that it is Russia, as the association’s initiator, that is expected by its partners to provide new initiatives and ideas, which is a sign of recognition for the potential of the Russian scientific and expert community. Every self-respecting university is setting up various centers and groups to study the BRICS, and citizens’ initiative is gaining momentum. BRICS member countries need to coordinate their efforts in this field.

The BRICS summit in Durban, South Africa, in 2013 established the BRICS Think Tanks Council to work out a scientifically-based development strategy and serve as a platform for expert opinion exchanges. The move was initiated by Russia (the first conference of BRICS representatives was held in Moscow in 2008). The Think Tanks Council has united five national research organizations that coordinate respective studies. In Russia, it is the National Committee on BRICS Research.

However, the recognition of the priority imposes responsibility on Russian scientists, who are expected to take the lead in intellectual efforts and innovative ideas. The role of scientific hypotheses and developments in the BRICS’ progress – at least, at the current early stage – is very important. Since its establishment, the Think Tanks Council has become an international scientific organization which has an increasingly significant impact on the evaluation of the BRICS’ prospects.

Scientists of the five member states are currently finalizing their joint recommendations for the leaders and governments of their countries concerning long-term development of the BRICS. They suggest that this development must be based on the following five pillars, which define priority areas for cooperation:

  • facilitating economic development (active cooperation both within the BRICS and within international organizations);
  • maintaining global peace and security;
  • promoting social justice, sustainable development and a decent quality of life;
  • reforming global economic and political governance to enhance the role of the BRICS members and developing countries in a polycentric world system;
    developing innovations and the knowledge economy.

However, there are many issues on which experts do not agree, for example, the BRICS’ enlargement. From our point of view, it is too early to invite other countries to join the association (although in the future it may be advisable to invite Indonesia, which represents the Islamic civilization, and, possibly, Turkey). But this is an issue to be addressed in the future. At present, it is important to form organizational frameworks for the association’s work.

Another important issue is the institutionalization of the BRICS. Some of its members do not want to push things too fast, but the need for that is growing. The role of the new Development Bank (whose inauguration is to be announced at the summit in Ufa) is not only to be a source of investment for programs important to the member countries but also to coordinate their economic policies. This is the beginning of the future convergence of the emerging powers.

From a technical point of view, the top priority issue is the creation of a secretariat, initially with limited functions. There are still no coordinated minutes of multilateral meetings or texts of agreements as diplomats of each of the five countries keep their own records, which may lead to misunderstandings. There is still no coordination center to formulate the agenda and draft texts (this is currently done by Sherpas). The strength of bureaucracy, which is rooted in its consistency and desire for self-preservation, in this case will help to make the association stronger.

Naturally, there are questions which have no answers yet. For example, what will the BRICS look like in 10 or 20 years from now? Can it develop a concerted ideology of development and translate it into life? I have repeatedly proposed creating a forum for discussing the association’s long-term strategy,  a kind of “wise men’s club” that would unite leading analysts, scholars and intellectuals from the five countries. In fact, they still do not know each other well enough; they participate in discussions hosted mainly by Western countries and judge the situation in the partner countries by publications in the West. It is time to establish direct cooperation in order to find answers to the key questions: How should the peoples of the emerging countries build their future? What can a coordinated strategy of global development be like? How to create an interaction model that would be of interest to all modern centers of power? These are issues of worldwide importance, and they will have to be addressed, sooner or later.

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