August 24, 2023 - 2:30pm
The most anticipated Brics conference in history has just concluded and the results have been significant. Since the start of the war in Ukraine last year and the Western sanctions on Russia, developing countries have become increasingly vocal about forging their own path, and this latest conference showed a glimpse of what the future might hold.
The conference was centred around ending the reliance of developing countries on the US dollar. This move against the currency can also be traced back to sanctions: after the United States seized Russia’s currency reserves, other countries realised that their own holdings might be subject to “geopolitical risk”.
The most concrete move in this direction was an announcement this week by the head of the Shanghai-based New Development Bank, Dilma Rousseff. She said that the Brics bank would be increasing lending to its members but, unlike the IMF and the World Bank, that it would also be lending in local currencies, and would not attach the sort of conditionality that comes with loans from the aforementioned global lenders. Relatedly, Rousseff announced that the Brics bank was considering 15 new members.
Towards the end of the conference, South African President Cyril Ramaphosa also announced that the Brics would invite six new members from January of next year: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and UAE. Since the war, 22 countries have joined the queue. If all these nations eventually join, Brics will go from making up 32% of global GDP to making up 45% — far more than the G7, which comprises just over 30%.
Strikingly, Iran’s addition will mean that it is no longer isolated from the world economy. Given that the country is the world’s eighth largest oil producer and possesses the third largest proven oil reserves, this is a substantial economic and geopolitical development.
Saudi Arabia and the UAE joining is likewise extremely significant. The United States used to rely on the Gulf monarchies, especially Saudi Arabia, to exert control over the oil price. With their accession to the Brics, it seems likely that America has lost any control it had over oil prices for the foreseeable future.
In the West these developments have been met with bemusement. There has been lots of trumpeting about weak Chinese growth numbers and a faltering Russian rouble, but both pale in comparison to half the global economy going its own way. There has been almost no discussion of Iran’s reemergence on the world stage, or the loss of control over global oil prices via the Gulf monarchies.
One constructive proposal is for Western countries to try to pull India out of the orbit of the Brics countries and integrate it into the G7 — relabelled the G8. The idea seems to rest on the fact that China and India are not friendly toward one another and have constant border disputes. But sadly, when looking at such economic arrangements, the numbers do not add up.
Looking at India’s top five trading partners, the United States is in the number one spot, followed by two Brics members and a further two will be incorporated next year: China, UAE, Saudi Arabia, and Russia. Total trade with the United States was around $118.2bn in 2022, but trade with the other four countries was around $274.6bn – more than double the amount.
Foreign policy strategists can focus all they like on border disputes and regional tension, but if history teaches us anything it is that trade and economic relations tend to be more important than either. We are going to have to find a way to live in this emerging world whether we like it or not, and the sooner we realise this the sooner we can discuss how to do it.
Philip Pilkington is a macroeconomist and investment professional, and the author of The Reformation in Economics
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SubscribeThe world is changing. This is the great move from unipolarity to multipolarity. Nations that respect other nations soverignty and just want to trade with them is the biggest threat our Western oligarchs have right now.
I’ll give you Brazil, India and South Africa for “respecting other nations sovereignty”. China’s a bit iffy (dubious involvement in border conflicts with Vietnam and India).
But Russia. Come off it Steve !
I am amazed you just said that.
You keep justifying Russian invasion of Ukraine.
How does it square with your claim of
“nations thar respect other nations sovereignty”?
“Nations that respect other nations soverignty and just want to trade with them”
Tooth fairy economics lol
I’ll give you Brazil, India and South Africa for “respecting other nations sovereignty”. China’s a bit iffy (dubious involvement in border conflicts with Vietnam and India).
But Russia. Come off it Steve !
I am amazed you just said that.
You keep justifying Russian invasion of Ukraine.
How does it square with your claim of
“nations thar respect other nations sovereignty”?
“Nations that respect other nations soverignty and just want to trade with them”
Tooth fairy economics lol
The world is changing. This is the great move from unipolarity to multipolarity. Nations that respect other nations soverignty and just want to trade with them is the biggest threat our Western oligarchs have right now.
As long as the West pursues this ludicrous chase to replace cheap reliable energy with expensive unreliable energy, it is doomed.
We need to get it into our collectively-thick heads that the rest of the world is going along with the dangerous-climate-change fiction not because they actually believe it, but because they want the West to relinquish its global pre-eminence as fast as possible.
The fastest possible way to do this without beating the West in a war is to stand silently aside while the West commits economic suicide. That’s where we’re headed, and the rest of the world has no intention of stopping us if that’s what we’re willing to do.
Precisely!
Feel better now?
Precisely!
Feel better now?
As long as the West pursues this ludicrous chase to replace cheap reliable energy with expensive unreliable energy, it is doomed.
We need to get it into our collectively-thick heads that the rest of the world is going along with the dangerous-climate-change fiction not because they actually believe it, but because they want the West to relinquish its global pre-eminence as fast as possible.
The fastest possible way to do this without beating the West in a war is to stand silently aside while the West commits economic suicide. That’s where we’re headed, and the rest of the world has no intention of stopping us if that’s what we’re willing to do.
So when, exactly, were economic and trade relations more important than political, territorial, and cultural considerations? By that logic, the conflict between the US and China should not even exist, yet it does. By that logic, Britain should have supported the cotton producing south in the American civil war, but yeah, that didn’t happen either. Pretty much all of Europe traded briskly with everybody else in Europe before WWI and that didn’t stop them from annihilating both themselves and each other over the next half decade. If history teaches us this, there must be some examples eh? If nothing else, the next few decades of history should serve to bury this particular myth, which was born out of the same irrational optimism that gave us “the end of history” and globalism.
The answer yo your question lies in the fact that power corrupts and absolute power corrupts absolutely! Eventually the psychopaths take over and wars start motivated by crass emotions replete among power hungry, hate-ridden, greedy psychopaths, eg the Kagans/MIC in the US including Victoria Kagan Nuland.
The answer yo your question lies in the fact that power corrupts and absolute power corrupts absolutely! Eventually the psychopaths take over and wars start motivated by crass emotions replete among power hungry, hate-ridden, greedy psychopaths, eg the Kagans/MIC in the US including Victoria Kagan Nuland.
So when, exactly, were economic and trade relations more important than political, territorial, and cultural considerations? By that logic, the conflict between the US and China should not even exist, yet it does. By that logic, Britain should have supported the cotton producing south in the American civil war, but yeah, that didn’t happen either. Pretty much all of Europe traded briskly with everybody else in Europe before WWI and that didn’t stop them from annihilating both themselves and each other over the next half decade. If history teaches us this, there must be some examples eh? If nothing else, the next few decades of history should serve to bury this particular myth, which was born out of the same irrational optimism that gave us “the end of history” and globalism.
Oh no! Not another new world order.
Damn it, I’ve only just broken in the last one!
Funny to despise order in the world? Of course if it comes with brutal oppression and predation it is indeed to be despised.. but the New Multi-Polar World Order looks like a much better deal ..for now at least.
Er, if Russia and China is involved, it already does. What planet are you on?
Er, if Russia and China is involved, it already does. What planet are you on?
Damn it, I’ve only just broken in the last one!
Funny to despise order in the world? Of course if it comes with brutal oppression and predation it is indeed to be despised.. but the New Multi-Polar World Order looks like a much better deal ..for now at least.
Oh no! Not another new world order.
Foreign policy strategists can focus all they like on border disputes and regional tension, but if history teaches us anything it is that trade and economic relations tend to be more important than either.
Really?
Yeah, if history teaches us this, how about some examples, cause I can think of at least three off the top of my head where it went the other direction (see my comment below).
Yes, among individuals, parties and nations.. ideologues are too busy fighting one another to notice!
Yeah, if history teaches us this, how about some examples, cause I can think of at least three off the top of my head where it went the other direction (see my comment below).
Yes, among individuals, parties and nations.. ideologues are too busy fighting one another to notice!
Foreign policy strategists can focus all they like on border disputes and regional tension, but if history teaches us anything it is that trade and economic relations tend to be more important than either.
Really?
The Western system is in keen pursuit of rich people and nations to do business with. The whole premise of capitalism rests on this – that wealth is not a zero sum game; trade is good, exchange of ideas, goods and people. ‘The West’ welcomes economic development anywhere and everywhere. It is an integral part of ‘Western’ thought that as a country develops, it becomes more peaceful, less likely to go to war etc. Of course, it is far from perfectly expressed, hypocrisy abounds – people being people whereever they are from, whomever they are. As Peter B pointed out already, if ‘The West’ has a problem with a BRICS country it is Russia (with some concern about China) not because they have become wealthier (halleluha!) but because they show an on-going appetite for wars of acquisition and authoritarian rule.
The Western system is in keen pursuit of rich people and nations to do business with. The whole premise of capitalism rests on this – that wealth is not a zero sum game; trade is good, exchange of ideas, goods and people. ‘The West’ welcomes economic development anywhere and everywhere. It is an integral part of ‘Western’ thought that as a country develops, it becomes more peaceful, less likely to go to war etc. Of course, it is far from perfectly expressed, hypocrisy abounds – people being people whereever they are from, whomever they are. As Peter B pointed out already, if ‘The West’ has a problem with a BRICS country it is Russia (with some concern about China) not because they have become wealthier (halleluha!) but because they show an on-going appetite for wars of acquisition and authoritarian rule.
So that’s where Dilma went! She would find plenty of common ground with Cyril.
So that’s where Dilma went! She would find plenty of common ground with Cyril.
End of evil empire and Rise of benign empire.. we live interesting times.. I wonder when the critical mass will be large enough and the US decline deep enough for GB to jump ship and seek BRICS+ membership? The economic decline of GB itself will also be a huge influencer ..don’t leave it too late or it’ll be begging bowl rather than negotiation!
Your wishful thinking is showing, and it’s not a pretty sight.
Your wishful thinking is showing, and it’s not a pretty sight.
End of evil empire and Rise of benign empire.. we live interesting times.. I wonder when the critical mass will be large enough and the US decline deep enough for GB to jump ship and seek BRICS+ membership? The economic decline of GB itself will also be a huge influencer ..don’t leave it too late or it’ll be begging bowl rather than negotiation!
Surprise the West hates itself. Any civilization that hates itself and it’s history will go into decline.
Surprise the West hates itself. Any civilization that hates itself and it’s history will go into decline.
Not more of this nonsense.
The only thing most of these countries have in common is their jealousy of the US. Hardly a sufficient basis for a coherent and enduring international alliance.
The US is self-sufficient in oil – indeed I think a net exporter. It can live with higher oil prices.
In any case, wasn’t OPEC supposed to control oil prices ? Why will BRICS+ (if it ever happens in any meaningful way) have any more impact than OPEC ? Note here that Saudi Arabia and Russia have frequently disagreed about changes to oil production over the past decade.
That’s all stuff Mr. Pilkington should be well aware of. But seems to ignore.
And I thought we were all being told not to use oil now anyway ! In which case, the oil price simply shouldn’t matter. [Though I don’t remotely buy that argument].
Not their jealousy of USA. They are all fed up of the US bullying and bossing them about.
Just like the Japanese were in 1941/42
Ah, so they think the Chinese and the Russians will be a soft touch, eh? Dear god, the level of delusion in your post.
Ah, so they think the Chinese and the Russians will be a soft touch, eh? Dear god, the level of delusion in your post.
Not their jealousy of USA. They are all fed up of the US bullying and bossing them about.
Just like the Japanese were in 1941/42
Not more of this nonsense.
The only thing most of these countries have in common is their jealousy of the US. Hardly a sufficient basis for a coherent and enduring international alliance.
The US is self-sufficient in oil – indeed I think a net exporter. It can live with higher oil prices.
In any case, wasn’t OPEC supposed to control oil prices ? Why will BRICS+ (if it ever happens in any meaningful way) have any more impact than OPEC ? Note here that Saudi Arabia and Russia have frequently disagreed about changes to oil production over the past decade.
That’s all stuff Mr. Pilkington should be well aware of. But seems to ignore.
And I thought we were all being told not to use oil now anyway ! In which case, the oil price simply shouldn’t matter. [Though I don’t remotely buy that argument].
Where in the article does Mr. Pilkington say the West needs to worry? All the Wests’ groupings were formed with the sole purpose of bettering the world, no doubt BRICS will follow in those noble footsteps.
Where in the article does Mr. Pilkington say the West needs to worry? All the Wests’ groupings were formed with the sole purpose of bettering the world, no doubt BRICS will follow in those noble footsteps.
Argentina, Egypt, Ethiopia and Iran? I’m sure those countries will have the West quaking in their boots!
Personally I can’t see the Saudis or UAE risking their lucrative relationships with wealthy western nations in favour of basket cases such as South Africa, Russia and Iran but I could be wrong
Argentina, Egypt, Ethiopia and Iran? I’m sure those countries will have the West quaking in their boots!
Personally I can’t see the Saudis or UAE risking their lucrative relationships with wealthy western nations in favour of basket cases such as South Africa, Russia and Iran but I could be wrong