By Darlington Chiluba

INSPIRATION is pointless if it does not motivate action. 

In the same way, complaining without having an action plan to correct your cause of discomfort is pointless. Until there is a deliberate action to steer away from being secondary, the status quo will remain unchallenged. 

This is why BRICS (Brazil, Russia, India, China and South Africa) is important to the future of international finance, trade and social capital. 

These nations dared to create a different status quo for themselves and potentially challenge the western global order which has prevailed since the 1940s.

Until this August, the BRICS nations were responsible for less than half of global trade, with China taking the lion’s share of that activity. 

The 2023 BRICS Investment Report by the United Nations Conference on Trade and Development (UNCTAD) showed global trade registered at $28.5 trillion in 2021 while BRICS economies accounted for about $7.4 trillion. 

That position has markedly changed and is expected to continue tilting in favour of BRICS taking more of global trade.

What changed in August 2023 was the invitation and subsequent joining of Saudi Arabia, Iran, United Arab Emirates, Egypt, Ethiopia and Argentina into the bloc. 

At that same function, one of the most unequivocal statements made at that BRICS meeting was by Namibia. The statement urged the new expanded BRICS to avoid the structure of the United Nations (UN) or International Monetary Fund (IMF) in which core decisions affecting the entire globe are made by fewer than 10 nations. 

This aged structure has retained a hierarchical legacy of the 1940s and projected it well into the future.

The statement issued by Namibia, therefore, does not downplay the economic gains and global power of China, or India, for example. Instead, it calls on these bigger nations to admit and respect the sovereignty of smaller economies. 

Economic or financial trade, whether via foreign direct investment (FDI) or loans cannot attach social conditions that replicate the social preference of the lender. In the new world, international trade includes trade in human skill, whether financial or military, for good and bad intentions. This is inescapable.

It is however essential to create capacity in developing nations so that they can repay their loans. Neither the transfer of human skill nor the lending to poorer nations is intended to upend existing social structures, culture and history. 

This has been an area of lamentation for developing nations for some time now. In the 1990s, it was painfully and begrudgingly accepted to undergo Structural Adjustment Programmes (SAPs) to create trade efficient economies that could compete in the new liberal world. 

These changes, as stated, were structural. In Zambia, for example, it meant the liberalisation of the economy and sectors such as agriculture eventually became large contributors to economic growth.

Furthermore, the structural changes of the 1990s created a market-driven financial services sector which has grown to be one of the core contributors to economic growth over the last 30 years. 

As it stands, the value of global trade reached $28.5 trillion in 2021 with goods represented four times greater than services in developing countries. This speaks to potential growth of developing countries using alternative models to the western model that have aided debt led development that ultimately restricts growth.  

BRICS account for about 45 percent of the world population and will account for over 50 percent of the world population after the new members join. While others may argue that the religious expanse of member nations may have an effect in actualising the BRICS ambition, it might actually be a point of tolerance. 

For instance, India alone has several faiths, Iran and Saudi Arabia are predominantly Muslim while China is largely secular. To imagine financial and trade covenants among these nations to include changes in tradition, culture and norm is almost inconceivable. 

However, one needs to appreciate the need for an alternative system based on the potential that BRICS represents.  

They are vast infrastructure growth opportunities in developing nations that are yawning to be taken up. The new composition of this bloc shows a diverse balance of creating an alternative trade structure that can drive the growth of both services and goods from developing countries. 

The critical differentiator for BRICS is that its growth should not be anchored on the creation of punitive debt for less economically advanced members. It is that model which is partly responsible for classifying nations into poor nation categories and ensuring they remain just that – Poor.

The hope for BRICS is also that it is internally financed – unlike the African Union (AU) which is not fully funded by African states. Naturally, whoever, pays the biggest bill will have the greatest influence. 

And if BRICS gives the impression of self-finance, then the glue and hope is that it could lead to self-determination from an economic point of view; and retaining social integrity anchored in every nation’s peculiar historical and cultural fabric. 

The need for an alternative order that goes beyond the World Bank and the IMF is bigger than the perceived religious divide and therefore that will create the motivation for the full actualisation of BRICS. 


Related Articles

Back to top button