BY WORKU BELACHEW
The five-member economic, if not geo-political, bloc is presenting itself as a competitive organ designed to fit in the interests of the developing countries that have long complained about the existing international system for it is tilted to the advantage of the developed world.
The club of five is enticing the interests of more economies from the global south with many of them making accession requests.
Figures speak volume as to the collective force Brazil, India, China, Russia and South Africa (BRICS) wields on the global socio-economic beam balance.
Data accessed from the Ministry of Foreign Affairs of China and sent to this writer show, “the bloc at its current standing accounts for 26.4% of the world’s total land area and 41.93% of the world’s population. A 2021 estimation shows the fact that the five countries account for 25.24% of the world’s economy and 17.9% of the world’s trade.” According to the data, in 2022, the voting power of the five countries at the World Bank stands at 14.06%, and the total quota at the IMF is 14.15%.
With major regional economies like Ethiopia possibly greeted to the group, the BRICS inevitably transforms itself into a power which could shake up the existing international system for the better.
Developing countries from all geographic regions are submitting requests to join the emerging club with Ethiopia formally expressing interest to be part of it last June. South Africa’s, Asia and Middle-East Deputy Director-General at the Department of International Relations and Cooperation Amb. Anil Sooklal unveiled a list of countries that are desirous of joining the entity. Argentina, Iran, Saudi Arabia, the United Arab Emirates, Cuba, Democratic Republic of Congo, Comoros, Gabon, and Kazakhstan are on the list, Reuters reported on July 20, 2023.
There are enough reasons for developing countries to look for such alternative alliances.
Currently, global multilateral institutions from the UN, WB to IMF and what have you are receiving bitter censure for being skewed towards the West. Many slam Western countries for exercising their voting power to attach strings on financial grants and loans coercing receiving parties into accepting their policy prescriptions—often exacerbating problems and undermining well-grounded societal values.
Dawit Mezegebe is lecturer at Dilla University and a Ph.D. candidate at the Center for African and Asian Studies of the Addis Ababa University (AAU-CAAS) and is also a member of the African Studies Professional Association think-tank. He presented a paper in April 2023 at AAU-CAAS Pan-African Seminar Series entitled: The BRICS and Africa: Political-Economic Opportunities and Challenges.
He shared some of his findings and views with this writer in a recent interview.
BRICS vs global financial architecture
The existing International Financial Institutions (IFIs) are less “international” and are more “Western-controlled”, Dawit argues. Developing countries are pressured to satisfy the stringent preconditions of IFIs to be eligible to access finance. If you take IMF, for instance, it is all about ‘balance of payment’, when a country faces challenges to pay for its import or service, it may access finance after fulfilling policy conditionality.
The conditions might be unfit for your development context or may go against the socio-political situation of your country. Such facet contributed to the under-development of Africa; you can take the failed Structural Adjustment Programme (SAP) as an example here.
[Arguments have not still saturated over the impacts of SAP on developing countries. Some research findings show that IMF’s conditions had contributed to the dwindling of standard of living. Its conditionalities included liberalizing the economy, focusing on export-oriented economic efficiency, privatizing pubic assets, and reducing government expenditures, among others. Others argue that stable government along with proper investment in pro-poor projects, and social services including health and owning policies to encourage domestic support could have made SAP a success story].
In this regard, Dawit says the BRICS Contingent Reserve Arrangement (CRA) is, however, always attached to commodity or is gold paid- sets an advantage for the developing countries. It is based on the amount of goods that they provide to the market that the exchange rate is balanced. The CRF sends a clear message for the IMF and the World Bank to rethink whatever position they pursue with regard to the under-developed countries.
Meanwhile, other commentators are optimistic about the potential advantage the bloc can give to regions like Africa.
Being home to over a billion people, Africa cannot take decisions on critical matters at the UNSC for instance. Africa can leverage the opportunity the bloc could offer to push for the reform of global institutions including the UN.
Cavince Adhere, a Kenyan scholar of International relations backs Dawit’s position. The former recently told China Daily Global Edition this; “in an increasingly polarized world, BRICS can create an enabling avenue for African countries to fashion a more inclusive global economic and political order which has been dominated by Western powers.”
He believes that developing countries, joining BRICS, can align themselves with a group that seeks to promote multi-polarity and a more equitable international system.
Various arguments run as to the essence of the BRICS. Some say it is a counterweight to G-7, a grouping of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. Others are still arguing that the BRICS expansion is perceived with a grain of salt among the countries of the global north. Recently France requested to attend the BRICS’ 15th Leaders’ Summit to be held in Johannesburg slated for August 22-24/2023. But Russia’s Foreign Ministry Spokeswomen Maria Zakharova questioned the motive behind the request as saying: “It would be nice if they [Macron’s office] told why they want [to attend the summit]. Do they want to once again make some contact to show Paris’ activity or is it a ‘Trojan horse’ of some sort — so let them explain.”
BRICS’ Gateway to Africa
In June this year, Ethiopia has formally shown interest for BRICS membership. Dawit buys the fact that Ethiopia’s economy is one of the largest in Sub-Saharan Africa. Due to this, Ethiopia has a lot to offer to the club socially, economically, geo-politically and culturally.
He has even attempted to identify what the grouping could benefit from Ethiopia. Since Addis hosts a large swath of foreign missions, being the third international seat next to New York and Geneva, the BRICS can establish its biggest African liaison office here to get its critical jobs done efficiently.
Geopolitically, Ethiopia’s importance is unparalleled. If one goes back to history, Judaism, Christianity and Islam penetrated through Ethiopia. It still positively influences the region both economically and in peace and security. The country has a tested-experience in pacifying the region and beyond alongside the AU and UN.
The country is a gateway to Africa. Ethiopian stretches wings in almost all major destinations of the world including in member states of the club; the industrial parks here are also creating extra advantage to the bloc. “I would argue that it is a huge achievement for the BRICS to accept Ethiopia’s request.”
Besides, there are enough scholars that subscribe to the fact that Ethiopia is considered as the mouthpiece of Africa. It did so with issues of climate change, just to cite. Africa was represented by Ethiopia in Copenhagen, Denmark, UN’s climate change conference back in 2009. It advocated for a billion people of the continent to pay 100 billion USD by 2020. Last June, Prime Minister Abiy Ahmed (Ph.D.) also attended the Paris Summit for New Global Financing Pact in which he “emphasized on the need for implementing past pledges with resolve,” saying; “we should keep past pledges in climate finance and on the rechanneling” of Special Drawing Rights amounting to at least $100 Billion to MDBs [Multilateral Development Banks] such as the African Development Bank.”
No doubt, the situation is a win-win for both sides. Ethiopia can better access BRICS’ market, technology and knowledge. The New Development Bank (NDB) and the BRICS currency are no less important.
Ethiopia has a greater chance of joining the club. Its bilateral relations with almost all BRICS’ states are the oldest ones. Ethiopia and South Africa, for instance, are tied with a historic brotherhood. Ethiopia’s contribution to South Africa’s fight against the wicked apartheid regime was ever-indelible from anyone’s memory.
The relations whether you take it individually or collectively have great impact on Ethiopia’s accession to the bloc.
Besides, Ethiopia is a founding member of several global institutions. It played an enormous role for Pan-Africanism to take institutional shape in the form of the OAU/AU. The country is also a founding member of the UN as well. That is why the East African country plays a big role in the international political and economic dynamics. For scholars like Dawit, membership is a positive boost to the BRICS and will help it expand its impact in Africa.
The bottom line is—the emerging bloc looks like to be a remedy to rectify the unfair global order. Hopefully, the next summit of the leaders will take the right decision to include more regional economies and accelerate the effort toward the creation of a fair and balanced global order.
The Ethiopian Herald August 20/2023