BRICS expansion: A warning to the US, but not a ‘new Cold War’

Last week, the bloc of nations known as the BRICS took the historic step of inviting six new countries for membership.

The grouping of Brazil, Russia, India, China and South Africa will be joined by Saudi Arabia, Iran, Ethiopia, the United Arab Emirates, Argentina and Egypt as part of an expanded collective.

But these six new entrants are among dozens of countries that have expressed interest in joining the BRICS. Further expansions of an organisation many have touted as a systemic rival to the G7 seem almost certain to follow in future summits.

As economic tensions soar and geoeconomics becomes a battleground, countries of the Global South seem drawn to the BRICS group, which includes and is partially led by China.

So, why are so many countries, including many US partners, participating in this project and seeking to boost its mission?

Many argue we are in the midst of a new Cold War. Even members of the United States Congress have lent credence to that concept. But that is an imperfect analogy.

As many have pointed out, China is a peer economy to the US and is likely to overtake it in gross domestic product (GDP) soon, while the former Soviet Union’s economy was, at its peak, only a third that of the US. But what is critically different in the global landscape of alliances is that many countries are in a position to choose their alignment.

Scholars and analysts have been discussing the rise of the Global South for decades, especially since the 2008 financial crisis, pointing to how the unprecedented and sustained economic growth of many countries outside the West was redistributing global power.

Researchers have also concluded that while the global economy’s centre of gravity was in the Atlantic, between the US and Europe, in 1980, it had moved 4,800 miles (7,725km) to Izmir, Turkey, by 2008 and will likely lie somewhere between India and China by 2050.

This new environment presents the nations of the Global South with options about how to respond to growing friction among major powers and how to position their nations in the midst of great power competition.

During the Cold War, one could awkwardly divide the world into three camps: the Western bloc, the Soviet bloc and the countries that were part of the so-called non-aligned movement.

After the Cold War, many of the norms of the Western bloc formed what is often referred to as the liberal rules-based international order. This new order was enshrined into new organisations like the World Trade Organization and older venues like the United Nations during a “unipolar moment”, when democratic capitalism and trade liberalisation seemed to have vanquished every foe.

But today, the rising power balancing the US is not looking to form a Soviet-type bloc. The reasons are both material and ideational.

China does not have the military capacity to project power over large parts of the planet and make security guarantees to faraway friends. It also has a grim history with alliance politics – such as its fallout with the Soviet Union. So it eschews the kind of alliances that define the US’s relationship with its linchpin allies in Europe and East Asia. Beijing has many partners, even “comprehensive strategic partners”, but no allies.

Beijing also has a precarious relationship with the international order Washington built. The order is one designed and carried out with US interests and preferences in mind – and to a lesser extent those of its close allies. As China rises, the West, and the US in particular, jealously guard the rules they’ve crafted and the pegging order within those organisations.

China’s voting power and position in international fora are still extremely small compared with its economic weight. For example, China has a 5 percent voting share in the World Bank’s main lending arm despite representing 16 percent of the global GDP.

China has repeatedly asked for its voting power, and those of other emerging economies, to be increased to represent modern global economic distribution to no avail. This is a rather enticing combination to many countries of the Global South. Many of them also see their preferences and interests underrepresented or ignored in the world order as currently constituted.

Additionally, aligning with organisations like BRICS does not mean binding commitments to one side of the new Cold War. The Shanghai Cooperation Organization (SCO) may be a security cooperation forum like NATO but it lacks any Article 5 feature. If the worst-case scenario, a Sino-American military confrontation, came to pass, US allies would be expected to quickly join it in the war but China’s partners would not.

In fact, an increasingly large coalition of countries with competing and conflicting political systems, ideologies and approaches to the West may produce an increasingly unwieldy organisation and exacerbate its collective action problem.

But China is clearly gambling that a larger, more geographically and economically diverse set of countries can eventually be marshalled towards the goal of enhancing their collective representation in the world order. For example, the inclusion of more countries, especially major commodity exporters like Saudi Arabia, Iran and the United Arab Emirates, may make greater economic integration among BRICS states and the use of non-dollar currencies in trade among them more appetising.

Scholars who have examined Beijing’s relationship with the international order argue that China seeks to engage international institutions to argue for its preferences. But when it is denied what it sees as power commensurate with its global position, it seeks to create parallel institutions. This can be seen in the form of the Asian Infrastructure Investment Bank, the SCO and BRICS.

The US and its linchpin allies have common values and deep social interaction. More importantly, they have similar forms of government and economic management. This both binds them together and solves collective action problems regarding world affairs.

US partners in the Global South, however, are not under this umbrella and instead court multipolarity to maximise their bargaining position vis-à-vis duelling powers.

Joining a forum like the BRICS is less a declaration of alignment with Beijing and more an assertion by a country that they wish to remain neutral or play both sides in line with their specific national interest.