BRICS Boosts Russia’s Influence

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Prof Leonid Fituni and Prof Irina Abramova find out why Russia attaches particular significance to a number of decisions reached by the Five in Fortaleza

There are three major international developments that have altered the course of global post-Cold War dynamics in the new millennium. These include the consequences of US military interventions in Iraq and Afghanistan, the protracted international financial and economic crisis, and the emergence of BRICS as an alternative intercontinental political and economic force of global importance.

The first development has demonstrated the vanity of unilateralism in the contemporary world. The second has cast doubts on the soundness of neoliberal market policies, deregulation and diminution of the economic role of the state. The third has reflected an objective trend in global development – leading towards the formation of a polycentric system of international relations, which is increasingly characterised by the use of non-institutionalised mechanisms of global governance, network-based diplomacy, and the growing economic interdependence of states.

All three developments signalled the decline of the post-Cold War American hegemony and the collapse of a ‘unipolar’ world model, characteristic to the 1990s. A new world system is under formation, in which large, developing countries and new actors, including non-state and non-structured ones, gradually assume important roles and influence.

The sixth BRICS Summit in Fortaleza, Brazil, has highlighted the increasing role of emerging countries in international affairs and their ability to share strategic interests and approaches while reaching for their development goals.

Russia attaches particular significance to a number of decisions reached by the Five in Brazil. The Fortaleza meeting started the second cycle of BRICS summits. Sustainable solutions for inclusive growth were in focus. The 2014 Summit reaffirmed common interests in broadening multidimensional cooperation, including mutual trade and investment. With combined GDP around 21 percent of global volume, 20 percent of global trade and 11 percent of accumulated investments, the five countries represent one of the largest markets in the world. To a known extent, BRICS, which started not as an official body, but as an informal club of states, became a financial and economic association first, and has now assumed features of a political association. The summit reminded the protagonists of a unipolar world order that the BRICS countries play an increasingly significant role in international affairs. Despite all the efforts of ill-wishers and competitors, the five countries are united in their willingness to coordinate their positions and actions on issues of global development and the reform of the global financial and economic architecture, including the IMF.

Ending Old Power Mechanisms

The currently emerging new model of world economic development is characterised by an increased global influence of large and populous developing countries, whose economies develop at a significantly higher pace than the world in general. This greater rate of development allowed some of these nations to narrow the gap in the size of GDPs and in unequal standards of living between them and the advanced economies in the OECD. A few rising nations have outrun some of the OECD members in a number of respects, including the value of their industrial production, their share in global trade, percentage of high-tech goods in their exports, and the number of new international patents issued.

However, despite all these achievements, the real say even of the minority of successful countries in global governance remains limited. Furthermore, rich nations with smaller economies, declining populations, inferior economic performance and increasing social problems continue to cling to levers of the ‘old’ power mechanisms and to restrict, either deliberately or unconsciously, possibilities for further development and growth of new, emerging economies or rising actors.

The West tends to usurp the right to govern the world. They revived G7, which largely shaped the future of the entire world in terms of finances a while ago. However, when the G20 was created, G7 lost its decisive role. The latter is being transferred to G20, within the framework of which the Western states have to agree to BRICS members and other states, which are part of this association and make up the totality of leading centres of economic growth and financial power. In the format of G20, G7 countries actively attempt, as the Russian Foreign minister Sergey Lavrov put it, to ‘grab the biggest piece of the pie’, in particular, within the framework of the preparations for the summit in Brisbane, Australia.

“However, BRICS members in the G20 have enough allies. For example, countries like Argentina, Mexico and Indonesia are absolutely in solidarity with BRICS participants on issues of reforming the international market and the financial system. Incidentally, one of the central items on the agenda of the next summit this November in Australia will be the request to implement the agreements about reforming the system of quotes in the International Monetary Fund (they were reached in autumn 2010 and now are understated by our Western partners).”1

Qualitative ‘Ripening’, ‘Maturation’ and ‘Manhood’

The decision of the Fortaleza Summit to create the New Development Bank (NDB) based in Shanghai will contribute to the efforts to eliminate infrastructure gaps, and meet sustainable development needs of the BRICS countries and other emerging markets. With initial authorised capital of $100 billion, including $50 billion of equally shared initial subscribed capital, it will become one of the largest multilateral financial development institutions. Importantly, it will be open for other countries to join. The creation of the Contingent Reserve Arrangement, or currency reserve pool, initially sized at $100 billion, will help protect the BRICS countries against short-term liquidity pressures and international financial shocks. Together with the NDB, these new instruments will contribute to further cooperation on macroeconomic policies. Other documents, including the Memorandum of Understanding (MoU) on Cooperation among BRICS Export Credit and Guarantees Agencies, as well as the Cooperation Agreement on Innovation within the BRICS Interbank Cooperation Mechanism, will offer new channels of support for trade and financial ties between the five countries.

Russian Foreign Minister Sergei Lavrov emphasised the qualitative ‘ripening’, ‘maturation’ and ‘manhood’ of BRICS. In Moscow’s eyes, four fundamental factors of a long-term character remain the foundation of the joint efforts of the BRICS Five in the world arena:

• The common desire of the BRICS to reform an obsolete international financial and economic architecture, which does not take into account the increased economic power of emerging market economies and developing countries;

• Their strong support for generally-recognised principles and norms of international law, as well as their rejection of power politics and politics infringing on the sovereignty of other states;

• The similarity of problems and challenges facing the BRICS states in economic and social areas stemming from the need for large scale modernisation; and

• The complementarities of many

sectors of the economies of the participating states.

The emergence of the BRICS as a non-antagonistic alternative to the old core of global ‘decision-makers’ has profoundly influenced many aspects of the current system of international relations, seriously undermining its quasi-feudal, rigidly hierarchical component. The advent of the BRICS as a new political and economic force of global importance has become a factor in and vehicle of the democratisation for the existing system of international relations. Russia, China, India, Brazil and South Africa were important elements of the existing system of world governance long before they consolidated their forces into the BRICS forum. Russia and China have been permanent members of the UN Security Council since its foundation and, as such, have possessed the right of veto, an exclusive attribute of global power assigned to only five of 193 members of the world community.

The BRICS enjoy a substantial resource for strengthening their positions in global competition and global governance through their outstanding role as regional superpowers. This important role, which each of the five countries plays in East, Central and South Asia, Eastern Europe, Africa and Latin America respectively translates into increased joint global influence and a synergy for delivering global governance. Together, the BRICS countries have long established themselves as leaders of growth engines of regional development, and catalysts for increased multifaceted cooperation in their parts of the world.

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Author

Centre for Strategic and Global Studies and Deputy Director, Institute for African Studies Russian Academy of Science. He is President of the Independent Centre for Documentation on Liberty, Democracy and Justice (Moscow). He is also Full Professor, Chair of Asian and African Economies, Lomonosov Moscow State University (MGU).

Prof (Dr) Irina Abramova is Deputy Director of the Institute for African Studies (IAS), Russian Academy of Sciences in Moscow. She is also Full Professor, Department of Global Problems and International Relations, Russian Academy of Sciences in Moscow.

The publication is based on the results of Research Project No 14-07-00026, executed by the authors with the financial support of the Russian Foundation for Humanities.

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    References

    1 United Nations Economic and Social Commission for Western Asia and the United Nations Programme on Youth, Regional Overview: Youth in the Arab Region, 2011 http://social.un.org/youthyear/docs/Regional%20Overview%20Youth%20in%20the%20Arab%20Region-Western%20Asia.pdf

    2 Raji Unnikrishnan, “5,500 Gulf citizens fighting with ISIS”, Gulf Daily News, July 14, 2014, http://www.gulf-daily-news.com/NewsDetails.aspx?storyid=381045

    3 Arab News, Govt. plan in place to counter IS rhetoric, July, 22, 2014, http://www.arabnews.com/news/605426

    4 Taylor Luck, “Abu Qatada denounces Islamic State caliphate”, The Jordan Times, July 15, 2014, http://jordantimes.com/abu-qatada-denounces-islamic-state-caliphate

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