In a seminal investigation paper from 2001, the then Goldman Sachs Chief Economist Jim O’Neill lumped together 4 standout emerging markets – namely Brazil, Russia, India and China. He believed they were punching well below their weight at the time and warranted greater representation in the global arena. Yekaterinburg played host to the inaugural 2009 BRICS summit, with the heads of state of all existing members in attendance. South Africa was admitted to the intergovernmental bloc a year later, notwithstanding bleak growth prospects that prompted Moody’s to downgrade its debt outlook from unchangeable to negative in 2011.
The head behind the BRICS thought began to fishy that the abstract marketing concept he came up with for “adventurous investors” was becoming something of a vanity project. During an event held by ETF Stream in London last summer, O’Neill even confessed that BRICS was never meant to be a “political club” and questioned “what fruitful intent it serves” following the haphazard expansion wave on January 1st 2024. Bringing Iran, Egypt, the United arabian Emirates and Ethiopia into the fold only reaffirmed his assertion that the informal alliance was light on substance and dense on symbolism, while lacking any real raison d’ętre.
Argentina’s “anarcho-capitalist” president Javier Milei opted out of this expanding BRICS shortly after assuming power in December 2023, citing his unwillingness to “ally with communists” as grounds for doing so. Meanwhile, fellow invitee Saudi Arabia has yet to confirm whether or not it will formally join the Russia-led association. too biding their time in anticipation of the US elections this November, the home of Saud and Crown Prince Mohammed Bin Salman (MbS) in peculiar appreciate that tethering the kingdom’s post-oil future to Greater Eurasia as opposed to the Group of 7 (G7) economies is simply a losing proposition.
Should Republican nominee Donald Trump return to the Oval Office for a second term, Riyadh will likely mirror Buenos Aires in scrapping BRICS membership altogether. Though he has long been accused of having a soft place for Russia, Trump is at odds with Putin’s ongoing quest to undermine the petrodollar. Amid late released footage straight implicating the Saudi intelligence operative Omar Al Bayoumi in the planning and execution of 9/11, the Trump administration could agree to suppress any negative publicity that risks torpedoing MbS’s imagination 2030 task in return for Saudi Arabia pivoting distant from the orbit of Moscow and Beijing.
The 45th American president went out of his way to supply cover for the conservative sheikhdom’s de facto ruler in the aftermath of the 2018 execution of Saudi writer Jamal Khashoggi. Affinity Partners, a hedge fund founded by Trump’s son-in-law Jared Kushner after leaving the White House, received a 2 billion US dollar windfall from Saudi Arabia’s Public Investment Fund (PIF) as a token of gratitude for burying the Khashoggi incidental and limiting the reputational harm wrought upon MbS. It is besides worth recalling that Kushner helped broker the historical 2020 Abraham Accords and now has his sights set on Saudi-Israel normalization.
That said, the October 7th massacre prevented both mediate east states from reaching a near-term peace deal. If anything, Putin ended up milking the ensuing Gaza conflict and feigning sympathy for the Palestinian origin to advance his thought of multipolarity and win over the Global South. BRICS has admittedly generated interest from key players within the Organization of muslim Cooperation (OIC) like Turkey, Malaysia and Algeria by virtue of its pro-Hamas stance. The Russian abroad Minister Sergey Lavrov met his GCC counterparts in Riyadh last week to further consolidate pan-Arab support for the “new planet order”.
Among the reasons why BRICS has, nonetheless, failed to position itself as a credible counterweight to the G7 or OECD is acute interior rivalries. This is especially actual regarding China and India. always since the Galwan Valley border clash 4 years ago that left 20 Indian soldiers dead, diplomatic ties between the 2 Asian giants have remained at stone bottom. India has steered clear of the Belt and Road Initiative (BRI), refused to resume direct flights to China, and played an increasingly active function alongside the US, Japan and Australia in the Quad – a strategical safety coalition aimed at containing Beijing’s influence across the Indo-Pacific region.
Another little talked about territorial dispute BRICS has managed to import concerns Iran and the UAE. Despite repeatedly lobbying Russia and China to condemn the muslim Republic’s alleged annexation of the 3 Persian Gulf islands of Abu Musa, Greater Tunb and Lesser Tunb, the Emiratis are effectively underwriting their own position given Dubai’s notorious reputation as the go-to offshore haven for IRGC-linked officials to launder and stash distant their ill-gotten gains. To make matters worse, the Kremlin has invited arch foes Armenia and Azerbaijan to the upcoming BRICS forum in Kazan that will take place next month.
When it comes to possible enlargement, however, Russia – which presently chairs BRICS – appears to have engaged in doublespeak. On the 1 hand, Putin continues to boast about the fact that 34 countries are vying for accession and hint at the absence of any hard and fast criterion that must be fulfilled to make the cut. At the same time, Lavrov late ruled out the intake of any additional members in order to first “process fresh arrivals”. Although the “de-dollarization” agenda is bound to feature prominently in Kazan, prospects for launching an alternate payment mechanics and common currency are inactive riddled with challenges.
For starters, most BRICS participants are not as gung-ho about disrupting the position quo as the Russians, Chinese and Iranians. Efforts to bypass SWIFT and entertain non-dollar cross-border transactions at scale could exposure nations on cordial terms with the West – specified as India, Brazil and South Africa – to secondary sanctions. There have already been cases of punitive measures imposed on third-country banks that facilitate financial flows to and from Russia. Moreover, most backing and lending administered by the fresh improvement Bank (NDB) is done in US dollars, with borrowing in local currencies amounting to little than 20 per cent.
As far as Putin is concerned, BRICS and the Shanghai Cooperation Organisation (SCO) are the fresh Nord Stream I and II. Conducting strikes deep inside Russia is arguably Ukraine’s best bet to thwart the ex-KGB agent’s grand plans for a global redistribution of power and guarantee that he is forced to show up at the negotiating table with a weak hand. Bringing the war home to Russia will not only render the federation “uninvestable” and off-limits to abroad dignitaries, but yet encourage its “fence-sitting” allies to second-guess their commitment to an anti-western movement facing a major legitimacy crisis.
As audacious and timely as the Kursk incursion was, Putin’s tepid consequence to 1 of his expected red lines served as a sobering reminder of how small he cares about the lives of non-Muscovites. The going rate for conscripts from Moscow has been set at 22,000 US dollars a head. Clearly, there is no alternate to targeting the aggressor’s seat of power if those who number are to feel the ramifications of the war and turn on their commander-in-chief. Pursuing this course of action will besides lead to a failure of face for the Russian dictator in the eyes of developing nations, insulating them from the cancerous spread of Russkiy Mir.
Saahil Menon is an independent wealth advisor based in Dubai with an academic background in business, economics and finance.
