EPA/AFPLula (Brazil), Putin (Russia), Modi (India), Xi Jinping (China), Ramaphosa (South Africa)
NOS Nieuws•vandaag, 21:18
Soehayla Halouchi
editor online
Soehayla Halouchi
editor online
Almost ten years ago, the largest emerging economies started their own World Bank. About forty countries are now queuing up to join the BRICS, a collaboration between Brazil, Russia, India, China and South Africa. While the group is not yet a formal trading bloc, experts believe it’s only a matter of time before they become a strong alternative to the G7.
The BRICS countries were the fastest growing economies about twenty years ago. They are still expected to account for a large part of the global economy in the coming years. The Chinese economy is forecast to grow 1.5 times larger than the US. In 2050, the country is expected to dominate the international economy.
“A generation is coming up that has to live and work in a world that is no longer dominated by the West, and we find that scary,” says Haico Ebbers, professor of international economics at Nyenrode Business University. Argentina, Saudi Arabia, Iran and Indonesia, among others, have pending requests to join the collaboration.
In August, the summit will meet in the presiding country South Africa to discuss the new applications. And to explore the possibility of a currency of its own, away from the dominant US dollar.
Shared frustration
What brings this diverse group of countries together? Apart from the fact that they are experiencing the same development from middle-income country to welfare state, it is mainly the shared frustration about the high threshold at the Western World Bank to receive sustainable aid, say experts.
For example, the International Monetary Fund (IMF), sister organization of the World Bank, requires that the power of the state decreases and that companies should be given more freedom for their loans to countries that need help. The World Bank also sets similar requirements for developing countries.
“Countries that start borrowing have to cut back on other things because of those rules, which is of course bad for the economy and people. Implementing democratic processes such as ‘less government’ and ‘more market’, of course, makes sense in the long term, but in the short term it is deadly,” concludes Ebber.
Correspondent Latin America Nina Jurna:
“South American countries such as Argentina have taken out large loans from the IMF to get out of financial problems, but the conditions that the IMF subsequently sets are so compelling that new problems often arise in these countries.
The IMF then demands that government subsidies on electricity and petrol, for example, be released, making life harder for citizens again. It has often been shown that when a country joins forces with the IMF, the incumbent government is held accountable for those unpopular measures in elections.
By joining the BRICS, the countries hope to break out of this spiral of instability. Brazilian President Lula, one of the main leaders of the BRICS, is strongly in favor of a stronger and less Western-oriented trade and power bloc. At a time of geopolitical block formation, joining the BRICS will mean for many Latin American countries that ties with China, for example, will become closer.”
This idea of strict rules for emerging economies should ensure that those countries become more democratic and thus safeguard human rights. Some of the countries that want to join the BRICS are accused of human rights violations by the UN, among others.
“But economic rights are also human rights,” says Ebber, “and when I talk to my Chinese colleagues, it now means first getting sewage and a roof over your head, getting out of poverty. The West assumes that a democratic process should always be the starting point, while that can come step by step, just look at South Korea.”
So emerging market governments are exploring other options and moving closer to the BRICS. “They seek each other out of the frustration that most rules in the field of globalization are made by the West,” says Ebber.
Cooperation with Russia
Differences in political systems and opinions manage to bridge those emerging economies to some extent. Take the cooperation between China and Turkey: although they disagree on certain issues – such as the genocide of the Chinese Muslim minority, the Uyghurs, and the Turkish reception of this group – they find common ground on the economic front.
To prevent the emergence of two power blocs operating directly opposite each other, the countries try to continue to make agreements with the West. That is proving difficult at the moment, especially since Russia is part of the BRICS group.
Russian President Putin will not attend next month’s meeting because of the arrest warrant issued against him by the International Criminal Court. His foreign minister, Sergey Lavrov, will be there.
2023-07-24 19:18:53
#emerging #economies #BRICS #countries
