BRICS expansion and a message to the West
Saudi Arabia joining BRICS would cement a geopolitical trend while reminding the US of its diminishing clout
By DNYANESH KAMAT
JUNE 1, 2023
Extending membership to Riyadh would signal the bank’s interest in challenging the West’s monopoly over global financial institutions and represent a counterweight to rich-country clubs such as the Group of Seven, which are seen as neocolonial structures, especially in the Global South.
Saudi Arabia’s financial heft would give the BRICS – or BRICSS? – bank a more prominent role in multilateral funding and is aligned with the group’s plans to create alternative financial structures not dominated by Washington.
Critics often point out that the International Monetary Fund (IMF) and World Bank tend to be structurally under-represent the Global South in their decision-making, and are too closely aligned with Western foreign-policy goals. As global funds shrink away from investments in Russia and China, the NDB might offer an alternative.
In this context, the entry of Saudi Arabia to BRICS would send a message that its current and future members are likely to seek alternative structures of global governance and financing. The West seems to have taken note: The G7 this year invited India, Brazil, the African Union, Vietnam, Indonesia and South Korea as observers.
Like current BRICS members, Saudi Arabia is neutral on the Russia-Ukraine conflict. One factor behind this is that while BRICS states are largely in sync with the post-World War II consensus on the sanctity of national borders and sovereignty, they share a mutual frustration with the West’s double standards in this area.
The calamitous aftermath of US president George W Bush’s Iraq invasion, which killed hundreds of thousands of Iraqi civilians, resonates as a painful reminder of that hypocrisy.
Where BRICS member states diverge markedly from their Western counterparts is on the principle of non-interference in domestic affairs, as they all operate under vastly different regime types and don’t comment on one another’s domestic politics. Politically, this is broadly the glue that keeps the BRICS together.
Saudi Arabia joining BRICS would cement this geopolitical trend while reminding Washington of its diminishing clout. Despite US President Joe Biden’s journey to Saudi Arabia last year to persuade the kingdom to raise oil output to offset high global energy prices, Saudi Arabia did the opposite.
That decision, which no doubt benefited Russian President Vladimir Putin – and which Riyadh justified on the basis of economics – was viewed as a way to distance the kingdom from Washington’s approach to Russia and China.
At the World Economic Forum this year, Saudi Finance Minister Mohammed Al-Jadaan said Saudi overseas funding would now come with strings attached: It would be tied to economic reforms in recipient countries. As such, Saudi Arabia’s BRICS membership would give the kingdom a seat at the table as the grouping seeks to reshape the global financial landscape.
Domestically, at a time when the kingdom is planning to diversify its economy, expand its tax base, and reduce its generous public sector, BRICS membership would provide a platform to showcase a new approach to external funding that is responsible and prudent.
China has likely played a role in championing Saudi Arabia’s BRICS bid. In March, Saudi Arabia joined the China-centric Shanghai Cooperation Organization (SCO) as a dialogue partner and was in active talks with China to conduct oil-related transactions in yuan.
Not that Saudi membership would raise many objections from other BRICS states. None would be averse to de-dollarization initiatives as a form of insurance against repeated American weaponization of the global dollar-dominated financial system.
After taking over the NDB’s presidency in March, Dilma Rousseff, a former president of Brazil, emphasized the bank’s future strategy to fund projects in local currencies, thus nurturing domestic markets and shielding borrowers from volatile currency-exchange fluctuations.
As more countries express interest in joining BRICS, there are likely to be many challenges for its members.
First, the NDB is at least a decade from bypassing Western sanctions against Russia. To assuage investor concerns, the NDB suspended its financial involvement with Russia in March 2022 and has also stopped financing new projects in the country.
Second, there are territorial rivalries among the BRICS (China and India, for instance) that may hamstring the group.
Third, except for India, none of the other BRICS countries have the same rosy economic prospects they enjoyed at the group’s inception in 2009.
Fourth, the NDB has relatively little to show in terms of investments. Since 2015, it has funded about 96 projects to the tune of US$33 billion, compared with the World Bank’s disbursal of almost $67 billion for the year ending June 2022.
Fifth, member countries are separated by vast distances, have different political systems, are not fully complementary on trade, and aren’t fully aligned on geopolitical postures.
Finally, even on the issue of expansion, there are divergences on criteria among member states. Without resolving these issues, an expanding BRICS (or whatever acronym it transitions to) may collapse under the weight of its own contradictions.
Nonetheless, even as the world watches these developments unfold – with interest or trepidation – the potential BRICS expansion should be interpreted by the West as a message that it cannot advocate for an international geopolitical order or global financial system while also attempting to monopolize the definitions.
This article was provided by Syndication Bureau, which holds copyright.
Source: Asia Times
If you wish to contact the author of any reader submitted guest post, you can give us an email at UniversalOm432Hz@gmail.com and we’ll forward your request to the author.
All articles, videos, and images posted on Dinar Chronicles were submitted by readers and/or handpicked by the site itself for informational and/or entertainment purposes.
Dinar Chronicles is not a registered investment adviser, broker dealer, banker or currency dealer and as such, no information on the website should be construed as investment advice. We do not support, represent or guarantee the completeness, truthfulness, accuracy, or reliability of any content or communications posted on this site. Information posted on this site may or may not be fictitious. We do not intend to and are not providing financial, legal, tax, political or any other advice to readers of this website.
Copyright © 2022 Dinar Chronicles