Loose BRICS

There is no coming anti-Western BRICS alliance

I am on vacation, so this second and final column is written by Michael Magnani, a Political Risk Researcher based in NYC. He graduated from NYU’s Center for Global Affairs with a concentration in Transnational Security. His first column was Principal Problems.

Let’s journey back to 2001 (the Earth one, not the Space Odyssey). China was a decidedly developing country with a per capita GDP just above $1,000, and it acceded to the World Trade Organization (WTO) in December of that year. Russia was reeling from the “shock therapy” transition to a free market following the collapse of the USSR, but a little-known former KGB agent named Vladimir Putin had just replaced the notoriously drunk Boris Yeltsin and began stabilizing the country. Brazil had finally corrected its economy in the 1990s after decades of mismanagement and instability, and was on its way to cementing civilian control of the government and the political stability that comes with it. And India had finally liberalized its economy after decades of statism, joining the WTO in 1995 and ushering in a burgeoning middle class.

Growth, opportunity, free markets, globalization, a worldwide détente: the era of neoliberalism was at its peak. It is fitting then that “BRIC” was coined by Jim O’Neill, a prominent analyst at Goldman Sachs, in 2001 to encompass these four striving economies (the grouping would transform into BRICS when South Africa joined in 2010).

Let’s jump to 2023. The interest in BRICS has reached a new height as the war in Ukraine rages on and a new, multipolar world arises. Unlike the West’s coalition, Brazil, China, India and South Africa have remained consistently neutral to pro-Russia on the conflict. That contrarian stance has led an eclectic ensemble comprised of WallStreetBets-types and some of Silicon Valley’s finest to come together with Russian apologists and Chinese propagandists and pitch the grouping of nations as a sort of anti-Western hegemonic alliance. They claim that the days of the U.S. dollar being the world’s reserve currency are numbered once these ‘up and coming’ economies band together to create their own currency.

These predictions are wrong, however, failing to take the current geopolitical climate into account while also ignoring the diversity of internal political systems of BRICS members.

Jumping right into it, the entire basis of BRICS is upended by the current Sino-Indian relationship. India and China have both long aspired to be regional hegemons. This has exacerbated ongoing border disputes that date back to the 1960s and have resulted in deadly clashes as recently as 2020. China’s ongoing support for Pakistan alongside their recent militarization of the Sino-Indian border and the South China Sea has exacerbated tensions. China must accept that India wants autonomy, and India has had to accept the idea of a hegemonic China.

To counter China’s posture, India has recently rekindled and deepened partnerships with the U.S., Australia and Japan, resulting in a resumption and enhancement of the previously overlooked Quadrilateral Security Dialogue (aka the QUAD) between the four countries, in conjunction with large annual military exercises known as Exercise Malabar. India and the U.S. also recently signed the iCET agreement to strategically cooperate in areas like the defense industrial base, artificial intelligence, semiconductors, space, critical minerals and more. On top of this, the U.S. just recently overtook China as India’s largest trading partner.

If India and China see each other as systemic rivals both regionally and globally, then bluntly, how could they possibly coordinate in a group meant to counter Western hegemony? This is an especially curious take by some commentators when all the evidence points towards India drifting further into the Western orbit as it seeks to buttress itself against Chinese encroachment.

BRICS is an acronym, but it is also an oxymoron collectively and individually. If you look at the internal political systems of the five countries in BRICS, we see two flawed democracies with simmering political instability (Brazil, India), a near-totalitarian klepto-regime run by an increasingly paranoid man (Russia), an authoritarian state where the survival of the Communist Party trumps all else (China) and a nation that is on the brink of failed-state status (South Africa, which we briefly covered in “Elemental Capacities”).

The leaders of each of these states have certainly shown, at a minimum, authoritarian tendencies as well. Brazil’s President Lula da Silva went to jail after his first term for numerous large corruption scandals; India’s Prime Minister Narendra Modi has become increasingly nationalistic as his BJP party consolidates control of the government and media; South Africa’s Cyril Ramaphosa has continued to pillage the coffers of his country alongside his ANC political party that has dominated the post-apartheid landscape; and finally, where to even begin with Russia’s Vladimir Putin and China’s Xi Jinping? The point is, as all of these leaders seek to further consolidate control at home, why would they cede any sovereignty to an international organization built around BRICS?

In order for international organizations to be effective, they need agency. Member countries must delegate some power in order for these organizations to be able to perform their mandates. We all remember the League of Nations, right? I do not recall their condemnation of the various activities of the Axis powers in the 1930’s having much effect at all. On the contrary, the reason why an organization such as NATO has lasted as long as it has is because its members have delegated some control in the form of Article V, which requires collective defense against attacks.

If BRICS was to become effective as a group, each of its member would have to delegate some form of power to an organization — an organization that to this day doesn’t exist. The annual BRICS Summit is a diplomatic event, but it is hosted by one of the five members on a rotating basis. It conducts photo ops, not ops.

Given its current membership (and newly invited members like Argentina and Iran), that is simply not happening. I do not believe any of the other four countries would be on board with propping up Russia’s invasion of Ukraine had the group been structured as a military alliance like NATO. Nor would delegating economic power to the group in the form of an oft-talked about common currency and ensuing central bank be of any interest to countries such as China (who would lose its oft-used ability to manipulate its own currency) or India, who would then be saddled with ailing economies such as Russia’s or South Africa’s.

These contradictions are the exact reasons why other seemingly ‘anti-Western’ international/regional, defense/economic organizations such as China’s Shanghai Cooperation Organization or Russia’s Collective Security Treaty Organization have similarly failed to achieve much (crazy people talk about BRICS, and yet, no one outside of a small niche of foreign affairs people talk about these). Authoritarian countries do not want to give up any sort of power or control, whether to their own citizens or to international organizations that could then act against their interests. Absent power-sharing, an organization like BRICS will not amount to much.

All of this is to say, BRICS is a mirage that appears in the desert of international relations once a year to attempt to salve the thirst for an international order outside of Western-designed institutions. The current geopolitical reality and the internal challenges of BRICS members are not conducive to deepening this grouping.

This is especially true after the announcement of the enlargement of the group in the last BRICS Summit in August held by South Africa. Not only does adding new members dilute each previous member state’s theoretical power on issues, but it also exacerbates the contradictions we’ve already discussed. Sworn enemies Saudi Arabia and Iran in the same organization bent on breaking Western hegemony? This is the same Saudi Arabia that is seeking American security guarantees at the moment, I might add. Don’t forget about Egypt and Ethiopia, two countries who have been gearing up for a fight over control of the Nile.

Turning BRICS into BRICSAEEISU won’t make it more effective, only less. For all the dysfunction in many global institutions like the World Bank and the United Nations these days, at least those organizations exist. Call it 2024: A Real Odyssey. “I'm sorry, BRICS. I'm afraid I can't do that.”

Lux Recommends

• We covered the Vesuvius Challenge, a machine-learning and computer-vision competition to read the Herculaneum Papyri, back in The TikTok Time Bomb (remember when everyone cared about banning TikTok? Those were the days). Now, Nat Friedman, one of the sponsors of the prize, has announced that several scientists, including 21-year-old Luke Farritor, have succeeded in completing several milestones, including reading the scroll’s first word. “The word is 'πορφυρας' which means 'purple dye' or 'cloths of purple.’” Luke won $40,000. Shaq Vayda also recommended Nature’s writeup of the challenge and the recent successes.
• Our scientist-in-residence Sam Arbesman and I were both ensorcelled by the launch of a near-comprehensive archive of The Whole Earth Catalog, arguably the definitive publication of the tech + counterculture movement that became the wellspring for Silicon Valley’s long-term success. Thanks to Barry Threw, who produced the archive.
• Peter Hébert recommends David Wallace-Wells’s "We Should Have Known So Much About Covid From the Start,” an interview with epidemiologist Michael Mina on the current status and future of the infection that "was the only infectious disease among the country’s top 10 causes of death.” Mina argues that high expectations set the public against science. “[…] we set society up for failure, since people feel like the government failed everyone, that biology failed us and that this was a crazy virus that has broken all the rules of our immune system, when it’s just doing what we’ve always known it would do.”
• Grace Isford recommends Paul Graham’s latest essay, "Superlinear Returns.” “This is one reason Silicon Valley is so tolerant of failure. People in Silicon Valley aren't blindly tolerant of failure. They'll only continue to bet on you if you're learning from your failures. But if you are, you are in fact a good bet: maybe your company didn't grow the way you wanted, but you yourself have, and that should yield results eventually.”
• Tess Van Stekelenburg points to a major achievement, the largest effort to build a cell atlas of the human brain. “The enormous cell atlas offers a detailed snapshot of the most complex known organ. 'It’s highly significant,' says Anthony Hannan, a neuroscientist at the Florey Institute of Neuroscience and Mental Health in Melbourne, Australia. Researchers have previously mapped the human brain using techniques such as magnetic resonance imaging, but this is the first atlas of the whole human brain at the single-cell level, showing its intricate molecular interactions, adds Hannan. 'These types of atlases really are laying the groundwork for a much better understanding of the human brain.'”
• Lan Jiang recommends Left Lane Capital investor Derek Urben’s essay on "Investing Adventures in Bhutan.” “The governing body for all securities regulation is Bhutan's Royal Monetary Authority (RMA), which is also their central bank, treasury, and stock exchange owner. This is a very different regulatory architecture when compared to most Western countries and even Bhutan’s neighbor India where SEBI is a completely independent body from the central bank and currency issuing entity.”
• Finally, Grace shares our former Lux summer associate Siddharth Sharma’s primer on reinforcement learning.

That’s it, folks. Have questions, comments, or ideas? This newsletter is sent from my email, so you can just click reply.