Brics Expansion: Descend Of Pax Americana
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The world witnessed several geopolitical upheavals in the year 2023. From the Israel-Gaza conflict to Suadi-Iran normalisation, 2023 will be marked as a year of major changes. But the most consequential event of 2023 has to be the BRICS expansion. In 2023, the BRICS summit was held in Johannesburg, South Africa. At this summit, it was officially announced about the BRICS expansion with six new entries. Argentina, Ethiopia, Egypt, Iran, Saudi Arabia, and the UAE are the new additions to the BRICS. Furthermore, 40 more nations expressed willingness to join the group. This was a bombshell announcement for the world for many reasons. Many analysts saw BRICS+ as a threat to the Western-led world order. While some took it as the rise of the global South. In this piece, we’ll discuss the rationale behind this expansion and what it means for the US-led world order.
MAKING SENSE OF BRICS EXPANSION
The BRICS in itself was a major grouping, but with this expansion, it reached new heights. However, Argentina opted out due to a change in government. Still, with five additional members, indubitably, BRICS is now way ahead of the G7 grouping in many terms. What makes it even more distinctive is that, for the first time in history, Iran, the UAE, and Saudi Arabia are joining a group together. This came after the normalisation of Iran-Saudi ties earlier this year. With these three fuel-rich nations, along with Russia, the BRICS alone will command 43.1% of the global oil share. Saudi Arabia alone accounts for 12.9%, with 12,136 thousand barrels per day. Saudi Arabia is followed by Russia, which commands 11.9% with 11202 thousand barrels per day, followed by the UAE (4.3%) and Iran (4.1%). With this, BRICS is set to play a much bigger role in the world energy market.
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Apart from energy terms, BRICS+ excels in all other major global markers of influence and reach. In terms of nominal global GDP, BRICS+ accounts for 29.3% of global GDP. In dollar terms, it is $30.8 trillion, with China accounting for $19.3 trillion, followed by India accounting for $3.7 trillion, followed by Russia and Brazil with $2.1 trillion each. With the expansion, the BRICS share of global exports will rise from 20.2% before expansion to 25.1% after expansion. But the real watershed moment is in terms of population. BRICS has always represented a major chunk of the global population, thanks to India and China, with over a billion people each. With the addition of new members, it will account for 46% of the world population, up from 40.9%. India accounts for 17.8%, followed by China with 17.7% alone. These statistics show how pivotal BRICS+ will be in steering the world economy.
BRICS EXPANSION: THREAT TO PAX AMERICANA
Pax Americana is a term used to represent a US-led world order where the United States became the world’s dominant economic, cultural, and military power. Post-World War II, America became the superpower that shaped the global order by controlling all global institutions and initiatives. This trend continued and even bolstered post-Cold War when the US became the sole superpower after the fall of the Soviet Union. Till now, the US-led order has dominated unopposed, but now it is being challenged by the BRICS + grouping. For the first time, this is a concerted effort by the middle economies to join forces and pose an alternative multipolar world order. The major factors behind why the unwinding of US-led order is so evident with the emergence of BRICS expansion are as follows:
RISE OF THE GLOBAL SOUTH
BRICS in itself is a representation of a global south. Since its inception, it has been regarded as a group of emerging economies. But later, it became a representation of the global south striving for a multipolar world. Today, after its expansion, BRICS has transformed into a beacon of hope for all the nations that want an alternative to a Western-led system. Arguably, it is the Western hegemony that made many regional rivals collaborate and join the BRICS initiative. Saudi Arabia-Iran and India-China are classic examples, where regional rivals came together to resist the US-led order. This becomes more evident with the fact that 40 more nations have expressed willingness to join this grouping. BRICS has become a platform for the global south, which is antithetical to the current Western order. India, too, has started emphasising the global south in promoting a multipolar world.
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The idea behind the Global South is to voice the voiceless. Today, the world functions on a system where the rules are set unilaterally by the first-world elite Western nations. These rules are then imposed upon the developing world, which has no say in it. All BRICS+ nations have been at some point or continue to be on the receiving end of this system. But one common attribute among them is that they resisted this system. Russia and Iran resisted unilateral Western sanctions, while India and China also resisted Western sanctions in the past. Recently, even Saudi Arabia resisted US pressure regarding oil output. Therefore, individually, these nations resisted Western pressure to adhere to their national interests. Now, with the BRICS, these nations could strengthen their voices through joint initiatives to resist arbitrary Western authority. This collective movement under BRICS+ poses a real challenge to the yet-unchallenged Western order.
DE-DOLLARIZATION
The major unnerving factor for the US is the BRICS initiative to launch its currency. There has been a lot of buzz in geopolitical circles that BRICS has been working on its currency. Now, with its expansion, the possibility of a new currency seems evident. If this turned out to be true, this would be an earth-shattering event in global history. This proposal was formally made by Brazilian PM Lula da Silva at a BRICS summit in Johannesburg. He claimed that a BRICS currency “increases our payment options and reduces our vulnerabilities.” Vulnerabilities to arbitrary US-led Western sanctions. I thought none of the other members said anything about this proposal, but it seems like a possibility. BRICS already has its bank, called the New Development Bank. And now, after expansion, it commands almost 50% of oil production and population.
COMPARATIVE ANALYSIS BETWEEN BRICS AND G7 BLOC.
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Though there might be several hurdles ahead, if intended, there could be a possibility to back its currency with a pool of resources from all members, including oil. The mere possibility seems so real that many analysts have started labelling the BRICS currency as R5. The name comes from the amazing coincidence that all of the members of BRICS use currencies beginning with the letter R: Renminbi, Ruble, Rupee, Real, and Rand. But this idea propelled itself due to America’s blatant and arbitrary use of sanctions as a tool of intimidation. The biggest example was the SWIFT ban on Russia in 2022, which banned Russia from using the SWIFT payment system. With a snap, Russia lost access to its $600 billion+ foreign reserves.
This move rang alarms in all the national capitals. It exposed the nation’s vulnerability to US dollars. This caused global panic, and nations started planning on dollar substitution. As an immediate response, nations preferred to trade in local currency rather than in dollars. India, too, promoted trade in local currency with Russia to buy crude oil. Recently, India and the UAE carried out their first oil deal in rupees instead of dollars. China and Iran, too, preferred to trade in local currency rather than dollars. But these are temporary measures; to bypass US dollar hegemony, the world needs an alternate currency. Thus, here comes the BRICS currency into play. The prospects of the BRICS currency are bright. Whether it sees the light of day, it has to be seen.
Also Read, The Afghan Debacle: Pakistan’s Strategic Depth Gone Wrong
CONCLUSION
The BRICS expansion has set the tone for a multipolar future. It’s fair to say that BRICS is only going to expand and will prove to be the most crucial engagement of this century. But not everything is going to be rainbows and sunshine; indeed, there are going to be hurdles. And these hurdles are only going to rise if and when BRICS+ decides to work on a collective currency. As it would mean challenging the writ of America, who would leave no stone unturned to prevent it? On the other hand, there are several differences within the grouping. Will India trust China and collaborate on currency? What if China invades Taiwan or the Indo-China border issue escalates? Will India stand with China in the BRICS at that point? Recently, Pakistan requested to join BRICS. Will India allow it? Only time would answer these pertinent questions.