China and India disagree over BRICS expansion

Since its inception more than a decade ago, the BRICS group (Brazil, Russia, India, China and South Africa) has grown significantly as a forum for expressing the views of countries in the Global South in their relations with developped countries. The group could evolve into the counterpart of the Group of Seven (G7) in global affairs, which would have a profound impact on international relations. But whether this impact turns out to be positive or negative will depend on whether the country’s vision for the future of the BRICS forum ultimately prevails: India’s or China’s. The two countries have very different ideas about how the group should move forward, as India’s disagreement with China’s efforts to rapidly expand the organization membership ahead of the BRICS summit from August 22 to 24 in Johannesburg, South Africa, demonstrates this.

If the BRICS group follows India’s approach, then it can promote cooperation among developing countries and, on this basis, engage with the G7 to discuss ways to reform the international economic and financial system and to solve global problems such as the impacts of climate change. This appears to appeal to many developing countries, which want to reform the current international economic and financial system but do not wish to explicitly take sides between the United States and China. On the other hand, if China prevails, the BRICS group will likely become another venue for anti-US political activism, likely jeopardizing its ability to deliver concrete benefits to many developing countries.

In this context, it is important for the G7 to develop an effective approach to the evolution of BRICS, finding ways to engage with its constructive proposals to seek common solutions to global problems, while pushing back against its negative tendencies.

The rise of BRICS

The acronym BRIC (Brazil, Russia, India, China) was invented in 2001 by Jim O’Neill, an economist at Goldman Sachs, to name these four countries as attractive investment destinations, riding a wave of enthusiasm about the prospects of emerging markets. In 2006, foreign ministers from the four countries met on the sidelines of the United Nations General Assembly in New York to formalize the grouping known as BRIC. In 2009, the first leaders’ summit took place, followed since by annual meetings. In 2010, the group was expanded to include South Africa, becoming BRICS.

The BRICS group was organized around the objective of strengthening consultation and coordination among the five major developing countries in order to transform the current Western-led world order into a multipolar system in which developing countries have more influence, in proportion to their share in the global economy. Despite the five members’ divergent economic trajectories in the years since – with China and India growing impressively while the other three have seen weak growth – the BRICS group has made significant progress.

Together, the BRICS countries have 3.24 billion inhabitants– or 41 percent of the world’s population – and a combined gross domestic product (GDP) of 26 trillion dollars, or 60 percent of the combined GDP of the G7 countries. However, on a in purchasing power parity, the BRICS countries’ GDP accounts for 31.5 percent of the global economy, surpassing the G7’s share of 30.4 percent. Despite this, BRICS countries receive only 15% of the votes in the International Monetary Fund – a source of developing country dissatisfaction with the governance of international financial institutions.

Competing visions

The BRICS group, however, has revealed its internal divisions, as the rivalry between China and the United States has intensified. India has tried to resist China’s efforts to transform the BRICS group into a support organization for China’s geopolitical agendaas promoting Beijing’s policies Belt and Road InitiativeIt is Global Development Initiative, and explicit anti-American rhetoric. Instead, India has focused BRICS discussions and activities on South-South economic and financial cooperation projects, initiatives aimed at reducing global dependence on the international financial and payments system based on the US dollar, and reforms to international financial institutions to give developing countries more voice and representation. . South Africa appears to have followed this approach in formulating the theme for the next summit: “BRICS and Africa: Partnership for mutually accelerated growth, sustainable development and inclusive multilateralism”. To strengthen its orientation towards Africa, South Africa has would have invited leaders of all African countries to attend the summit.

The disagreement between China and India over expanded membership will shape the prospects of aspiring BRICS countries and the future of the organization. According to South African authorities, twenty-two countries have officially requested to join the agreement. BRICS group, and a similar number of countries have expressed interest. While this has boosted the group’s stature, it also poses a difficult problem for the organization: admitting too many new members risks diluting the BRICS group, rendering it ineffective if it continues to operate on a consensual basis. China and Russia want to rapidly expand the BRICS group to strengthen their influence in important developing countries – many of which also see the organization as an opportunity to grow economically closer to China. India, for its part, fears losing its own influence if the BRICS group admits too many new members closely aligned with the Chinese agenda. After all, India has always had a bitter border conflict with China, as well as a rivalry with Beijing for regional influence. In this context, India proposed to discuss and agree on the criteria for membership– as an agenda item for the August summit – before admitting new members.

An effective approach to the G7

Faced with the efforts made by several countries of the South to create a forum – probably based on the BRICS format – in order to coordinate their points of view and their policies towards developed countries, the G7 should find an effective approach to manage its interactions with the countries developed. the BRICS group. If the BRICS group follows India’s agenda and proposes concrete ideas for reforming the international economic and financial system, the G7 should engage constructively and seriously discuss these ideas – and not dismiss out of hand the change requests. However, if the BRICS group turns out to be a China-led forum sponsoring anti-US and anti-Western rhetoric and initiatives, then the G7 should respond to these criticisms, as effectively as possible by suggesting ways to improve the current economic and financial system. to address gaps in meeting the development needs of countries in the South.

Regardless, the BRICS forum is an idea whose time has come, and the world must be ready to interact with it.

Hung Tran is a nonresident senior fellow at the Atlantic Council’s Center for Geoeconomics, former executive managing director of the Institute of International Finance, and former deputy director of the International Monetary Fund.

Further reading

Image: Chinese President Xi Jinping (L) and Indian Prime Minister Narendra Modi attend the group photo session during the BRICS summit at the International Conference and Exhibition Center in Xiamen, south China’s Fujian province. East China), on September 4, 2017.