BRICS is a Win for Both Russia and a Multipolar, Non-West-dominated World Order

Image used for representation only. File photo of Putin, Modi, and Xi posing for a picture.

(Photo: PTI)

As I sit in the lobby of my hotel in Kuala Lumpur, the newspapers around me have BRICS and Malaysia's desire to join it. This gives an inkling of why the summit, beginning today in Kazan, Russia, will be closely followed across the world.

Malaysia is amongst the 30-odd countries that want to join this 'non-Western' grouping, which in Prime Minister Narendra Modi's words, is at the same time, not 'anti-West'.

Eighteen years since its inception in 2006, the grouping has not just survived but grown. Brazil, Russia, India, and China were the founding members, and Jim O'Neil famously coined the term BRIC, which became BRICS in 2011 when South Africa joined.

Originally dismissed by the all-powerful West as another talking shop of a disparate grouping of countries with little in common, BRICS today has grown to include nine member states. Egypt, Ethiopia, Iran, and the United Arab Emirates applied for membership during the summit held last year and will be participating this year as full-fledged members. Saudi Arabia has also applied for membership.

Russia has called it the biggest diplomatic event it has ever held. And not without reason. Russia is the most sanctioned country in the world by the West, which has tried to isolate it both politically and diplomatically over its war in Ukraine. The summit, therefore, is expected to be a show of strength for Russia diplomatically.

Last year, President Vladimir Putin did not attend the summit in South Africa (an ICC member) as he was declared wanted by the International Criminal Court (ICC) "for the war crime of unlawful deportation of population (children) and unlawful transfer of population (children) from occupied areas of Ukraine to the Russian Federation."

As the Chair this year, Russia has themed the summit, "Strengthening Multilateralism for Just Global Development and Security."

Leaders of at least 24 countries have confirmed their participation. These include Prime Minister Narendra Modi, China's Xi Jinping, and the UAE's Sheikh Mohammed bin Zayed Al Nahyan. UN Secretary-General Antonio Guterres has also confirmed.

Indeed, this appears to be a diplomatic triumph for President Putin and the gradual erosion of the US' authority. The Kremlin has, however, said that the Ukraine war will not be on the summit's agenda.

Since its estrangement from the West, Moscow has been pivoting to the Global South, particularly to countries in Asia and Africa, advocating for multipolarism and de-dollarisation as Russia has been cut off from the SWIFT payment system and billions of its dollar reserves in Western banks and financial institutions are frozen. BRICS has been just that platform, i.e., a counter-balance to a Western-dominated world order, and its expansion can be seen as the inevitability of multipolarism.

The BRICS countries today account for at least 45 percent of the world's population and $26.5 trillion, or 20.2 percent, of the global GDP. According to a recent report from the World Gold Council, they hold 20 percent of the world's gold reserves. Member-states like India and China are the main drivers of global economic growth currently, with the individual their pace of growth outstripping that of the G7 nations.

In 2015, BRICS set up the New Development Bank, its only multilateral institution. The bank is committed to financing projects, both public and private, in emerging economies and the developing world, while presenting an alternative to international financial institutions like the World Bank and the IMF.

The bank's membership now also includes Bangladesh, Uruguay, the UAE, Egypt, and more recently, Algeria. As per the available statistics, it has issued loans worth approximately $8 billion. And more and more countries seem eager to join It.

Countries like Uzbekistan, Azerbaijan, and Armenia in Russia’s near abroad, as well as Turkey (a NATO member), Thailand, Myanmar, Sri Lanka, Algeria, Nigeria, and Uruguay, have all evinced their interest in joining BRICS, so much so that the membership application has now been put on hold with discussions over a mechanism using which such countries can become partners rather than members of the grouping.

An unintended consequence of the Western sanctions on Russia, including its cutting off from SWIFT, has been the beginning of a slow but sure process of de-dollarisation across the world. In order to hedge against such sanctions, a number of countries, mainly emerging economies, have begun using local currencies for bilateral trade.

Within BRICS, for instance, India has been using the Indian Rupee for trade with Russia. Last year, it made its first purchases of crude oil from the UAE in INR. China has long been pushing the Yuan in its external trade and today, it is the main currency in its trade with Russia. China has a Yuan agreement in place with Saudi Arabia and Egypt as well.

The summit in Kazan is expected to shed light on a BRICS-led payment system to rival SWIFT. In his address to a business forum on the eve of the summit, Putin said that BRICS was working on a financial system immune to Western sanctions, as well as putting in place a mechanism for the use of national digital currencies in investment projects inside and outside the grouping. But he ruled out discussions for the creation of a single currency for BRICS, calling it “premature”.

This kind of trade potential for and with major emerging economies, as well as the payment mechanisms and the New Development Bank, indeed make BRICS an attractive proposition.

For instance, for Malaysia, the main reason for wanting to join BRICS is to further develop the economy. According to the country's Deputy Minister for Investment, Trade and Industry, Liew Chin Tong, this would enable the country to tap into new trade and investment opportunities, while solidifying the nation's commitment towards neutrality and multilateralism.

Similarly, for Egypt, such economic opportunities coupled with payment mechanisms hedged from Western interference incentivised BRICS membership. “Some of the BRICS countries started such models of payment bilaterally,” said former Egyptian ambassador to China Magdy Amer to Channel News Asia, citing Russia-China and Russia-India partnerships. “In Egypt, we are starting this with China as well. This is the trend now and an important step to be taken by BRICS.”

Finally, BRICS membership does not foist any domestic policy or legislation, which makes it easier for countries to seek it. For instance, it would be easier for Turkey to join BRICS even though EU membership has eluded it for a long time.

(Aditi Bhaduri is a journalist and political analyst. She tweets @aditijan. This is an opinion piece. The views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)