The BRICS summit in Russia offers no alternative

www
https://www.cadtm.org/The-BRICS-summit-in-Russia-offers-no-alternative
Author

 Eric Toussaint, Translated by Sushovan Dhar

Date
October 26, 2024

Sommaire

There is such widespread disgust with the policies of these traditional imperialist powers that some on the left perceive the BRICS’ policies as a promising alternative

There is no doubt that we need to fight the policies of the traditional major imperialist powers: the United States and its European partners, as well as Japan. Without a doubt, the most aggressive imperialist countries are the United States and Israel, closely followed by the European Union, Great Britain, Japan, Australia, Canada, and others, all of whom accept the actions of the fascist Israeli government.

There is such widespread disgust with the policies of these traditional imperialist powers that some on the left perceive the BRICS’ policies as a promising alternative, even though many oppose Russia’s invasion of Ukraine, given that NATO and Washington bear a portion of the responsibility.

It is worth analyzing the contents of the final BRICS declaration adopted in Kazan on October 23, 2024, to see whether this bloc puts forward an alternative to the models and policies imposed by the traditional imperialist powers (grouped in the G7: the United States, Germany, France, Great Britain, Canada, Japan, Italy, and the European Union). In any case, we could not anticipate the emergence of an alternative that benefits the peoples of a group of countries, all of which are dominated by capitalist logic, albeit to varying degrees, and where the majority of governments repress their peoples. Reading the final declaration in its entirety reveals that there is no significant difference, even at the word level, between the speeches and declarations of the main traditional imperialist powers and the institutions they control. If, moreover, we take the trouble to analyse the concrete policies of the BRICS, we can only conclude that to promote an alternative conducive to the emancipation of peoples, to strengthen the struggle against the various forms of oppression and to confront the ecological crisis, we must not count on the help and action of the BRICS.

I will review the key points from the final declaration of the BRICS summit in Russia, following the order in which they appear, with one exception. Those who want to read the whole declaration will find it on the Russian government website: Kazan Declaration and on other official websites.

No questioning of the IMF and the World Bank:

In point 11, the BRICS reiterate that the International Monetary Fund (IMF) should play a central role::

“We reaffirm our commitment to maintaining a strong and effective Global Financial Safety Net with a quota-based and adequately resourced IMF at its center.”

BRICS welcome ongoing discussions within the IMF on the evolution of voting rights within the Fund:

“We welcome the IMF Executive Board’s ongoing work to develop by June 2025 possible approaches as a guide for further quota realignment” and “We welcome the decision to create a 25th chair at the IMF Executive Board to enhance the voice and representation of Sub-Saharan Africa.”

The BRICS do not criticize the neo-liberal policies imposed by the IMF on the countries that borrow from them.

The BRICS do not demand any alterations from the World Bank and are satisfied with their current position:

“We look forward to the International Bank for Reconstruction and Development (IBRD) 2025 Shareholding Review.”

The declaration contains no calls for or commitments to debt cancellation.

The following Point 12 is a purely abstract and meaningless declaration about the need to improve the international monetary and financial system.

There is a sense of contentment with the COPs, which don’t offer any compelling solutions but instead support the carbon market.

The BRICS do not condemn the irresponsible policies of the old imperialist powers and the big companies that make their living from fossil fuels

In point 16, on initiatives to tackle the ecological crisis and climate change, the declaration makes no reference to the deep ecological crisis and welcomes the progress made at the recent COP climate summits:

“We commend Egypt for hosting COP27 in Sharm El-Sheikh in 2022, where the Fund for Responding to Loss and Damage was established, and the UAE for hosting COP28 in Dubai in 2023, where the Fund was operationalized. We welcome the UAE Consensus achieved at COP28, including the decision entitled “Outcome of the first global stocktake”, and the UAE Framework for Global Climate Resilience. We express commitment to a successful COP29 in Azerbaijan, with an expectation of strong outcomes on climate finance to developing countries, as a critical enabler for delivering on the current and future nationally determined actions and ambitions in mitigation, adaptation and loss and damage. We support Brazil’s leadership in hosting COP30 in 2025 and welcome India’s candidacy to host COP 33 in 2028.”

While the COPs have failed to produce any convincing results, and the most recent ones have been caricatures, the BRICS are in fact very close to the traditional imperialist industrial powers, refusing to acknowledge that the policies adopted so far have failed to provide responses commensurate with the issues at stake. Despite their disagreements and the tensions that mark their relations, the two blocs agree in practice at the COPs not to adopt binding measures that are strong enough to tackle the ecological crisis. Each bloc defends the interests of polluting industries. It is striking that the BRICS do not condemn the irresponsible policies of the former imperialist powers and the big companies that make their living from fossil fuels.

Moreover, in point 85, the BRICS declare their support for the market in carbon emission permits.

"We recognise the important role of carbon markets as one of the drivers of climate action, and encourage enhancing cooperation and sharing experiences in this field.” (for more details).

The carbon market is at the heart of green capitalism, greenwashing and the pursuit of predatory policies towards nature.

While condemning Israel, they refrain from using the term genocide.

The BRICS continue to supply Israel with the oil, gas and coal it needs to continue its war effort

Point 30 addresses the situation in Israel-Palestine without once using the word genocide to describe the criminal actions of the Israeli government.

“We reiterate our grave concern at the deterioration of the situation and humanitarian crisis in the Occupied Palestinian Territory, in particular the unprecedented escalation of violence in the Gaza Strip and in West Bank as a result of the Israeli military offensive, which led to mass killing and injury of civilians, forced displacement and widespread destruction of civilian infrastructure. We stress the urgent need for an immediate, comprehensive and permanent ceasefire in the Gaza Strip, the immediate and unconditional release of all hostages and detainees from both sides who are being illegally held captive and the unhindered sustainable and at scale supply of humanitarian aid to the Gaza Strip, and cessation of all aggressive actions. We denounce the Israeli attacks against humanitarian operations, facilities, personnel and distribution points.” (...) “welcome the continuous efforts by the Arab Republic of Egypt, the State of Qatar, other regional and international efforts in order to reach immediate ceasefire, accelerate the delivery of humanitarian aid and Israel’s withdrawal from the Gaza Strip.”

The BRICS do not announce a break-up or suspension of trade relations and cooperation treaties with Israel. Worse still, as Patrick Bond and other authors have shown, the BRICS continue to supply Israel with the oil, gas and coal it needs to continue its war effort. The same is true of the government of South Africa, which, despite having rightly lodged a complaint against Israel before the International Court of Justice, continues to supply it with coal.

They condemn in point 31, “the loss of civilian lives and the immense damage to civilian infrastructure resulting from attacks by Israel in residential areas in Lebanon and call for immediate cessation of military acts” but they leave it at that.

In point 32, they condemn, without pointing the finger of blame at the government of Israel,

“the premeditated terrorist act of detonating handheld communication devices in Beirut on 17 September 2024, resulted in the loss of life and injury of dozens of civilians.”

Condemning without explicitly mentioning them, Houthi actions that attempt to hinder trade relations with Israel

In point 33, they condemn, without naming names, the actions of the Houthis who attack ships trading with Israel. The BRICS state:

“the importance of ensuring the exercise of navigational rights and freedoms of vessels of all states in the Red Sea and Bab Al-Mandab Strait”.

No condemnation of Russia’s invasion of Ukraine and no explicit criticism of NATO

In point 36, the BRICS do not condemn Russia’s invasion of Ukraine. They write:

“We recall national positions concerning the situation in and around Ukraine as expressed in the appropriate fora, including the UNSC and the UNGA.” (...) “We note with appreciation relevant proposals of mediation and good offices, aimed at a peaceful resolution of the conflict through dialogue and diplomacy.”

The fact that there was no criticism of NATO is most likely attributable to the fact that Turkey was invited to the summit.

Support for public-private partnerships that in reality favour large private companies at the expense of public goods

From point 61 onwards, the BRICS return to financial issues. They come out in favour of public-private partnerships, declaring :

“We recognise that the use of blended finance is an effective way to mobilize private capital to finance infrastructure projects.”

They add:

“we commend the work of the BRICS Public-Private Partnership”.

Supporting the activities of the New Development Bank set up by the BRICS in 2015 by talking about loans in local currency, while the bulk of financing still goes through the US dollar

The New Development Bank lends mainly in dollars

In point 62, they emphasise:

“the key role of the New Development Bank (NDB) in promoting infrastructure and sustainable development of its member countries.”

They promise to improve its management:

“We support further development of the NDB and improvement in corporate governance and operational effectiveness towards the fulfillment of the NDB’s General Strategy for 2022-2026.”

To understand the reference to improving the governance of the NDB, we certainly need to take into account the opinion of the Brazilian, Paulo Nogueira Batista, who represented Brazil at the IMF from 2007 to 2015 under President Lula and who was then vice president of the New Development Bank (created by the BRICS) from 2015 to 2017. Although he expresses enthusiastic support for the BRICS, he is quick to criticise the mismanagement of the NDB’s management:

“The Bank has achieved many things but has yet to make a difference. One reason being, frankly, the type of people we have sent to Shanghai since 2015 as presidents and vice presidents of the institution. Brazil, for instance, during the Bolsonaro administration, sent a weak person to become president from mid-2020 to early 2023 – technically weak, Western-oriented, no leadership, and without a clue as to how to conduct a geopolitical initiative. Russia is also no exception, unfortunately – the Russian NDB vice president is remarkably unfit for the job. Weak management has often led to the poor hiring of staff.” [1]

They announce their support for the NDB’s continued expansion of local currency financing, which is positive, but they fail to mention that the bulk of the NDB’s financing is in dollars through the issuance of securities on the financial markets.

New Development Bank (NDB)

The 6th BRICS Summit in Fortaleza, Brazil, on July 15, 2014, officially created the NDB. The NDB began granting its first loans at the end of 2016. The five founding countries each have an equal share of the bank’s capital, and none has veto rights. In addition to the five founding countries, Bangladesh, the United Arab Emirates, and Egypt are also members of the NDB. Uruguay is in the process of making its membership effective. The NBD currently possesses a capital of 50 billion dollars, with plans to raise it to 100 billion dollars in the future. The NBD rotates the position of president. Each country has the right to hold the presidency in turn for a five-year term. Dilma Rousseff, the current president, is Brazilian. Vladimir Putin, the recently re-elected president of the Russian Federation until 2030, will appoint the next Russian president in 2025. The New Development Bank has announced that it will focus primarily on financing infrastructure projects, including water distribution systems and renewable energy production systems. It insists on the ‘green’ nature of the projects it finances, although there are questions about it. Certain passages concerning the NDB suggest that there are real tensions between the BRICS member countries:

“We urge the Bank to execute its purpose and functions in accordance with the Articles of Agreement of the New Development Bank in a fair and non-discriminatory manner.”

Since the Western powers imposed sanctions against Moscow following the invasion of Ukraine in February 2022, the NDB has not granted any credit to Russia. Financial markets finance the NDB, and it feared a downgrade of its triple AAA rating if it continued to lend to Russia. It has therefore refused to finance projects in Russia.

The project page on the NDB website, verifies that since 2022, the NDB has approved financing for over 50 projects, none of which are located in Russia. This page lists all loans made to Russia, and it’s easy to see that the NBD’s last financial support for a project in Russia was in September 2021.

Despite being a strong supporter of the BRICS, Paulo Nogueira made a negative assessment in March 2024 regarding the NDB, where he served as deputy director from 2014 to 2015:

“Why can it be said that the NDB has been a disappointment so far? Here are some of the reasons why. Disbursements have been strikingly slow, projects are approved, but are not transformed into contracts. When contracts are signed, actual project implementation is slow. Results on the ground are meagre. Operations – funding and lending – are done mainly in US dollars, the currency which also serves as the Bank’s unit of account.

How can we, as BRICS, credibly talk about de-dollarisation if our main financial initiative remains predominantly dollarised?

Don´t tell me that operations in national currencies cannot be done in our countries. The Interamerican Development Bank, the IDB, for instance, has had for many years considerable experience operating using Brazilian currency. Why the NDB has not tapped into that experience beats me." [2]

The BRICS are no longer talking about launching a common currency

In reality, the BRICS have made minimal progress in terms of financial instruments, and the final declaration hasn’t revealed any significant advancements.

At the previous summit held in South Africa in August 2023, Lula, the President of Brazil, declared that the BRICS had

“approved the creation of a working group to study the adoption of a reference currency of the BRICS. This will increase our payment options and reduce our vulnerabilities.” [3]

Soon afterwards, the same Paulo Nogueira Batista declared at a meeting in Russia:

“It is our good luck to have Russia presiding over the BRICS in 2024 and Brazil, in 2025 – precisely the two countries that seem to be most interested in moving towards the creation of a common or reference currency. If everything runs smoothly, the BRICS may be able to take the decision to create a currency during the Summit in Russia next year.” [4]

Nothing of the sort has happened. The publication of the 16th BRICS summit’s final declaration on October 23, 2024, does not mention the creation of a common currency. This is a major step backward. Yet many BRICS supporters had announced in 2023, after the BRICS meeting in South Africa, that we were on the eve of the creation of this currency. The mountain has birthed a mouse, and the short point 67 gives the measure of it:

“We task our Finance Ministers and Central Bank Governors, as appropriate, to continue consideration of the issue of local currencies, payment instruments and platforms and report back to us by the next Presidency.”

Not a single word about a common currency.

The BRICS Monetary Fund is at a standstill

On another point, the balance sheet is downright negative, namely the currency reserve fund that the BRICS decided to create in 2015, almost 10 years ago. The acronym for this fund is the CRA (Contingent Reserve Arrangement). The fund’s purpose was to provide BRICS member countries experiencing a foreign currency shortage for their international payments with a means to draw on (borrow from) it. This instrument is particularly important for South Africa, the weakest country in the BRICS, which has faced a shortfall of foreign currency in recent years. This problem also affects a large number of countries that have joined the BRICS or are candidates. Examples include Ethiopia, Egypt and Iran.

However, nothing has changed since the fund’s paper creation in 2015. No credit has been granted. The purpose of this fund was to replace the role of the IMF in situations where one of its members lacks the foreign exchange reserves necessary to make payments. Its purpose was to free the BRICS member countries from the IMF’s conditionalities.

Despite being established on paper, the fund has not yet begun operations, and the recent BRICS summit produced a timid declaration (Point 68):

“We recognise the BRICS Contingent Reserve Arrangement (CRA) being an important mechanism to forestall short-term balance of payments pressures and further strengthen financial stability. We express our strong support for the CRA mechanism improvement via envisaging alternative eligible currencies and welcome finalization of the amendments to the CRA documents. We acknowledge the successful completion of the 7th CRA Test Run and the fifth edition of the BRICS Economic Bulletin under the title “BRICS Economies in a Higher-rate Environment”.

To welcome the publication of an analytical bulletin and the completion of a 7th test is to acknowledge that, after 9 years, the reserve fund (CRA) exists only as a project and has not carried out any operations.

Paulo Nogueira had this to say about the CRA in October 2023:

“The two existing BRICS financing mechanisms were established in mid-2015, more than eight years ago. Let me assure you that when we started out with the CRA and the NDB, there existed considerable concern with what the BRICS were doing in this area in Washington, DC., in the IMF and in the World Bank. I can testify to that because I lived there at the time, as Executive Director for Brazil and other countries in the Board of the IMF.

As time went by, however, people in Washington relaxed, sensing perhaps that we were going nowhere with the CRA (BRICS’ common monetary fund) and the NDB.” [5]

According to the BRICS, free trade is the leitmotif of agricultural activity (Point 73). Not a word about food sovereignty or organic farming

“We agree that resilience of supply chains and unimpeded trade in agriculture along with domestic production are crucial for ensuring food security and livelihoods, especially for low-income or resource-poor farmers, as well as for net food importing developing countries.”

Experience has shown that large private agrobusiness and major powers use free trade as a weapon against peasants.

The BRICS are promoting Special Economic Zones (Point 74), a paradise for capitalist companies and often a lawless area for workers

“We recognise the effectiveness of Special Economic Zones (SEZs) of the BRICS countries as a well-established mechanism for trade and industrial cooperation and the facilitation of manufacturing (...) We welcome the establishment of a forum for cooperation on SEZs of the BRICS countries.”

Rejection of environmental protection measures (Point 83)

“We reject unilateral, punitive and discriminatory protectionist measures, that are not in line with international law, under the pretext of environmental concerns, such as unilateral and discriminatory carbon border adjustment mechanisms (CBAMs), due diligence requirements, taxes and other measures and reconfirm our full support for the call in COP28 related to avoidance of unilateral trade measures based on climate or environment. We also oppose unilateral protectionist measures, which deliberately disrupt the global supply and production chains and distort competition.”

It is true that traditional powers like the EU and the USA, which are losing ground, resort to environmental reasons to conceal their desire to protect the interests of major shareholders in failing companies. However, we should not oppose all protectionist measures that protect the environment and promote worker rights in the south and north of the planet.

The BRICS discourse on women is entirely in tune with the ones adopted by the traditional imperialist powers, the World Bank, the dominant press, and the business world (Point 130)

“We acknowledge the critical role of women in political, social and economic development. We underline the importance of women’s empowerment and their full participation on the basis of equality in all spheres of society, including their active participation in decision-making processes, including in senior positions, which are fundamental for the achievement of equality, development and peace. We recognise that inclusive entrepreneurship and access to finance for women would facilitate their participation in business ventures, innovation, and the digital economy. In this regard, we welcome the outcomes of the Ministerial Meeting on Women’s Affairs and BRICS Women’s Forum held in September in Saint Petersburg under the theme “Women; Governance and Leadership” and recognise the valuable contribution of these annual meetings to the development and consolidation of women empowerment across all three pillars of BRICS cooperation.”

And, Point 131:

“We appreciate the efforts of the BRICS Women`s Business Alliance to promote women’s entrepreneurship, including the launch of the Common BRICS Women’s Business Alliance Digital Platform, the holding of the first BRICS Women’s Entrepreneurship Forum in Moscow on 3-4 June 2024 and the first BRICS Women’s Startups Contest. We support further strengthening cooperation between the BRICS Women’s Business Alliance and women entrepreneurs from the Global South, including the establishment of Regional Offices, as appropriate.”

Conclusion:

The BRICS are not an alternative for the peoples of the world to the traditional imperialist powers. The BRICS’ positions are perfectly in line with the global neo-liberal capitalist system, they do little or nothing to break away from it and subscribe to the false solutions of green capitalism. Despite their denunciation of the crimes committed by Israel against the Palestinian and Lebanese peoples, they do not deign to sever their trade links with the Zionist power.

Footnotes

[1] Paulo Nogueira Batista, BRICS Financial and Monetary Initiatives – the New Development Bank, the Contingent Reserve Arrangement, and a Possible New Currency, October 3, 2023, accessed on October 25, 2024.

[2] Ibid.

[3] Paulo Nogueira Batista Jr., BRICS Financial Settlements, April 9, 2024, accessed on October 26, 2024

[4] Paulo Nogueira Batista, BRICS Financial and Monetary Initiatives – the New Development Bank, the Contingent Reserve Arrangement, and a Possible New Currency, October 3, 2023, accessed on October 25, 2024.

[5] Ibid.