BRICS nations share little beyond their acronym

For those who love symbolism, the BRICS summit in Fortaleza, Brazil, this week will be a banner occasion, a remarkable demonstration of how the global political order is changing.

Five significant developing nations — Brazil, Russia, India, China and South Africa — will try to flesh out a multilateral development agenda free from the oversight of the United States. They are expected to set up a BRICS development bank that will be seen by many as an attempt to undercut the World Bank and International Monetary Fund (IMF), both created under Pax Americana. Accentuating this sense of an alternative order, there will be numerous meetings between leaders who nurse varying degrees of antipathy towards Washington.

However, for those seeking hard evidence of what this summit signifies, it may be a damp squib. The five countries share little beyond subscription to a marketing acronym dreamt up by Goldman Sachs. Unlike many multilateral groupings, they are geographically far-flung, depriving them of the relevance of contiguity. They vary vastly in size and heft — China’s economy is 24 times larger than that of South Africa — suggesting that attempts at equality in power sharing could be a struggle.

Nor is it clear that the countries are stable allies. India and China, which fought a border war in 1962, are engaged in strategic competition over naval spheres of influence, relations with Pakistan and the refuge that New Delhi provides the Dalai Lama. Russia’s relationship with China, notwithstanding a considerable warming this year, has been hobbled by mutual suspicion for decades.

None of this would affect the viability of the BRICS grouping if its aim were merely to serve as a forum for blowing off anti-Western steam. But it aims to be much more than that.

CAN CHINA LEAD THE WAY?

The envisaged BRICS bank elevates the grouping to a different level of cooperation and importance. Not only does the bank plan to fulfil the much-needed role of disbursing development finance to fast-growing emerging economies, it also intends to present an alternative developmental vision as it does so.

Experts involved in preparation work for the bank say the lecturing by rich countries and bureaucratic conditionality associated with the World Bank will be jettisoned.

But it is in the profound levels of cooperation required to organise and run such a bank that the BRICS grouping confronts its stiffest test. As the group’s largest creditor nation, much of this burden is likely to fall on China. But Beijing is so unaccustomed to acting as a multilateralist that its ability to exercise effective leadership must be in question.

One big test, therefore, will be whether China compromises its own interests for the good of the group. A contentious issue, for example, is where the bank will be based. Another is whether Beijing will be able to coordinate the actions of its other international development agencies — the China Development Bank and the Export-Import Bank of the United States — to avoid confusion.

The potential tussle for resources is almost certain to be sharpened by China’s recent backing for the Asian Infrastructure Investment Bank, which it will be more likely to dominate than the BRICS bank. As it watches events in Fortaleza, the US and its allies might reflect that they brought this body into being by denying China a share of IMF voting that matches its weight in the global economy.

But while the BRICS bank may become a competitor to the IMF and World Bank in development funding, the Washington-based institutions should not soften their stringent lending standards to governments.

The BRICS bank faces many challenges. As for the five member states, they have yet to prove they can unite to form something more than an acronym.