BRICS and West Asia: How a strategic realignment is taking shape in global order

The 15th BRICS Summit was held in Johannesburg, South Africa from 22-24 August 2023. Unlike many previous summits which could be called more as ‘routine’, this Summit created a great deal of buzz and excitement months before it even took shape. It was the first physical meeting after the Covid-19 pandemic as the summits of 2020, 2021 and 2022 were held through video conferencing. It also came under the backdrop of ongoing Russia Ukraine war and the arrest warrant issued by the International Criminal Court against the Russian President Putin, who, despite assurances from the host, South Africa of his safety and no arrest, finally decided not to travel to South Africa and chose to be present via video conferencing. The Summit also brought the Chinese and Indian leaders face to face on a global platform with speculations rife on whether the two will meet on the sidelines of the event, in the face of unresolved military engagement in Eastern Ladakh in India. Another fascinating aspect to this summit was the large number of nations from the developing world who have expressed interest in joining the BRICS forum. As per the South African Minister of International Relations and Cooperation Naledi Pandor, 23 countries officially expressed their desire to join BRICS while more than 40 countries have conveyed their interest informally. Among the countries which formally applied were nine nations from West Asia-North Africa (WANA) region ie Algeria, Bahrain, Egypt, Iran, Kuwait, Morocco, Palestine, Saudi Arabia and the UAE. Most of these countries enjoy close ties with the three major constituents of BRICS ie. Russia, India and China. Their inclusion has the potential to add economic as well as geopolitical weight to the forum at a time when rapid changes and transformation are taking place towards shaping a new world order. At the end of the Summit, the South African president announced that the BRICS had decided by consensus to include six countries into the grouping; Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the UAE. Interestingly, four of these are from the West Asian region. BRICS BRICS, which was initially BRIC consisting of Brazil, Russia, India and China, owes its origins to the term BRIC coined by Jim O’Neill, a British economist at Goldman Sachs, who came up with the acronym “BRIC” in year 2001, proposing coming together of strong and developing economies as a collective body on the world stage. The leaders of BRIC (Brazil, Russia, India, and China) countries met for the first time in St. Petersburg, Russia, on the margins of G8 Outreach Summit in July 2006. Shortly afterwards, in September 2006, the group was formalized as BRIC during the 1st BRIC Foreign Ministers’ Meeting, which met in New York. The first BRIC summit was held in Yekaterinburg, Russia on 16 June 2009. The group was renamed as BRICS after South Africa was accepted as a full member at the BRIC Foreign Ministers’ meeting in New York in September 2010 and accordingly, South Africa attended the 3rd BRICS Summit in Sanya, China on 14 April 2011. The grouping has held annual meeting ever since with the chairmanship rotating among members on a yearly basis. In this brief history of almost two decades, the only significant development that can be credited to the forum is the formalization and establishment of BRICS Bank or the New Development Bank (NDB), headquartered in Shanghai. Established in 2015, the NDB is a multilateral development bank aimed at mobilizing resources for infrastructure and sustainable development projects in BRICS and other countries. Mr KV Kamath from India was its first president, elected in 2016. In year 2021, NDB Board of Governors approved the admission of Bangladesh, UAE, Egypt and Uruguay to mark the Bank’s expansion as a global multilateral institution. The ongoing Russia Ukraine war has brought focus back on BRICS. Russia is being targeted by the Western world through economic sanctions and military aid to Ukraine while China is pitted in its ‘cold war’ with the US on many issues, primary among them is the threat of military action by China over Taiwan. Russia and China swear by their ‘no limits partnership’ and pose a potent opposition to the Western Block. In midst of all these developments, India has catapulted quietly and surely as a global leader to reckon with and Delhi has become a ‘virtual global capital’ with most global leaders requesting India to take initiative and take leadership decisions. India’s twin presidency during the current year, of SCO and G20, have given it the added muscle and influence. The economic sanctions against Russia and freezing of its dollar accounts has also brought back into focus the debate on ‘de-dollarising’ the world trade and find alternate options. In this context, there has been much discussion on launching of a BRICS currency too, but with India and China in a continuing standoff, it does not seem like a possibility in the near future. As an alternative, the BRICS countries and many more influential and economically powerful nations like the UAE and Saudi Arabia are looking for the next best alternative ie trading in local currencies wherever feasible. BRICS also has the opportunity to carve out exclusive space for itself in the emerging world order. In its current form as BRICS, it already has representation from most continents except the Western block of North America, Europe and Australia. With the inclusion of six new members, its influence is set to spread even more. South Africa, in its current chairmanship and India as a part of its G20 presidency have actively campaigned for voicing the concerns of Global South and BRICS has the potential to become a formal platform for it. BRICS and West Asia BRICS in its current form represents almost 42 percent of world population, 16 percent of global trade and almost 32 percent of world’s GDP (on PPP basis). With the expanded membership coming into force from 01 January 2024 onwards, the share of global GDP is expected to jump from 32 to 37 percent. Most of this jump comes from the countries in West Asian region, majorly Saudi Arabia, the UAE, Egypt and Iran. When compared against the share of global GDP of G7 countries at 30 percent, this 37 percent share in BRICS is very significant. Of the six new members, three nations, all from West Asia; Saudi Arabia, UAE and Iran form part of OPEC, and all three figures in the list of top 10 oil exporters of the world. When we add Russia which is a part of OPEC Plus and is one of the top three oil exporters in the world, this group becomes even more potent and powerful. Also, the presence of China and India which are the world’s top two importers of crude oil, the grouping has the chance to greatly influence the future of oil trade. Global oil trade comprises of around 4.5 percent of total global trade and it is here that the power of alternate trade currency can pose a threat to the dollar. India and UAE have already agreed to settle part of their trade in local currency while Brazil president’s recent statement “Why does Brazil need the dollar to trade with China or Argentina? We can trade in our currency”, too is significant in this regard. If the ‘BRICS plus’ decides to trade amongst themselves in local currencies even for oil only, this could deal a severe dent to the US dollar trade which draws considerable strength from global oil trade. The US drawdown pull-out from Afghanistan in August 2021 and its stated intention of no longer getting actively involved in military conflicts in the world especially West Asia is significant with regard to BRICS expansion in West Asia. As a result, West Asian nations have already started looking towards Russia, China and India for security collaboration. The Russia-Ukraine war and the neutral or anti-West stand taken by most of these countries is a clear indication towards it. Chinese President’s participation in the China-GCC Summit in December 2022 and his keynote address stating, “China will continue to firmly support GCC countries in safeguarding their security, and support the efforts by countries in the region to resolve differences through dialogue and consultation and to build a Gulf collective security architecture” cannot be a mere coincidence. Adding to it, the Saudi-Iran peace deal brokered by China in March 2023 too corroborates that countries in the region are looking for alternative security arrangements including intra-regional reconciliation efforts. Russia too has close ties with each of these countries and has hugely benefited from their stance on the war with Ukraine. For India too, the new members are a welcome addition and strengthens its global outreach. Within the West Asian region, India has strategic partnerships with Saudi Arabia, UAE and Egypt while Iran is a critically important partner its regional outlook. The region supplies over 70 percent of crude oil to India and takes off a very big chunk of its foreign exchange in US dollars. The idea of using local currencies within the block could be a major saving for India. In addition, India is looking at close security partnership with the region too, including arms sales. The addition of countries from West Asian region thus is a boost to India’s regional strategy and growing global outlook. Looking ahead The rapidly evolving world order in the wake of Covid-19 pandemic and Russia Ukraine war is posing geo-economic and geostrategic challenges as well as opportunities. Within BRICS, it is for China particularly to seize this opportunity and seek reconciliation and military disengagement with India, while the opportunity exists. This would not only strengthen the BRICS solidarity but present strong alternate options for the other developing nations in the world. BRICS, which started off as a trade block for emerging economies in 2009, is at an important inflection point. The growing interest among nations, especially from the Global South, present it with an opportunity to emerge as a significant transcontinental global power block. The failure of multilateral organizations like the UN to evolve with time, especially the UN Security Council have opened up strategic space for BRICS. None other than UN Secretary-General Antonio Guterres, speaking at the BRICS Summit in Johannesburg on 24th August reflected on it, stating that “today’s global governance structures reflect yesterday’s world, this is particularly true of the Security Council of the United Nations and the Bretton Woods institutions, referring to the World Bank and International Monetary Fund”. The intelligent selection of four powerful West Asian countries into its primary membership adds the required economic muscle and political weight. With time, more members are likely to join this block. These four members could become the core for adding more members from the region in the future and making ‘BRICS plus West Asia’ a prominent subset of BRICS in the future. With its strategic location, economic strength and critical fossil energy reserves, the West Asian nations are an important addition and present an opportunity for a strategic realignment for the BRICS. The author is Assistant Director, MP-IDSA. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost_’s views._ Read all the  Latest News,  Trending News,  Cricket News,  Bollywood News, India News and  Entertainment News here. Follow us on  Facebook,  Twitter and  Instagram.