BRICS is not a formal organization like OPEC. It has neither a charter nor a headquarters. It is managed by a rotating presidency and secretariat. And many countries see the group as a mechanism by which they can increase development and multilateral trade and as an alternative to existing international institutions and financial systems.
But the organization is growing. There are now reportedly close to 40 countries that are seeking BRICS membership.
The BRICS revival was sparked by a series of supporting events,” says Cipher Brief Expert and former National Intelligence Manager for Iran at ODNI Norm Roule, who is also a Global Energy Expert. “Those events include China’s campaign to build economic and political relations with the global south, the rise of so-called Middle Powers, the absence of U.S. or European strategies to engage the Global South, multipolarity, and – most recently - the Russian invasion of Ukraine.”
But as Western alliances including NATO, have shored up support for Ukraine as it defends itself from Russia’s unprovoked and violent invasion, a number of countries have failed to support Kyiv and more broadly, a values-based system that punishes countries that invade another on false merit.
Adding to the complexity, is the global divide between economic and national security agendas. The U.S. Intelligence Community’s new 2023 National Intelligence Strategy, released earlier this month, describes an “increasingly complex and interconnected threat environment” with threats not only from China, Russia, Iran and North Korea.
So, how does that measure up against an alliance led by China and Russia as rumors swirl about a new BRICS currency that could devalue the dollar? And how could a growing BRICS organization realistically impact a future world order?
THE CONTEXT
- At the end of the 1990s, Brazil, Russia, China, and India enjoyed strong economic growth, a promising economic future, and positive relations with such international organizations as the World Trade Organization.
- This drew investors, and in 2001, the head of Goldman Sachs global economics research coined the group’s acronym.
- BRIC foreign ministers met for the first time in 2006 at the United Nations, followed by BRIC heads of state meeting in 2009.
- South Africa joined the group in 2010 with Chinese support, giving us its current acronym.
- Western optimism for BRICS faded as the group’s economies declined due to a global downturn. By 2011, most economists and investors dismissed the group as moribund. Nonetheless, the group continued to meet without much impact or structure.
- The group established a lending institution, the New Development Bank (NDB), to fund infrastructure projects in 2015. China was the bank’s main contributor.
- Six more countries; Saudi Arabia, UAE, Iran, Egypt, Ethiopia and Argentina are expected to formally join BRICS in January.
Where is the new BRICS heading and what does the growing alliance mean for the West? We dug in on those questions during this exclusive interview with Cipher Brief Expert Norm Roule.
Norman T. Roule, Geopolitical & Energy Consultant
Norman T. Roule is a geopolitical and energy consultant who served for 34 years in the Central Intelligence Agency, managing numerous programs relating to Iran and the Middle East. He served as the National Intelligence Manager for Iran (NIM-I) at the ODNI from 2008 until 2017. As NIM-I, he was the principal Intelligence Community (IC) official responsible for overseeing all aspects of national intelligence policy and activities related to Iran, to include IC engagement on Iran issues with senior policymakers in the National Security Council and the Department of State. Mr. Roule is a life member of the Council on Foreign Relations, an advisor to the Belfer Center for Science & International Affairs at the Harvard Kennedy School, a 2023 Visiting Fellow at the National Security Institute at George Mason University’s Antonin Scalia Law School, and a non-resident senior adviser with the Transnational Threats Project at the Center for Strategic and International Studies. He is also an advisor to United Against Nuclear Iran (UANI) and the Counter Extremism Project (CEP).
EXPERT INTERVIEW
The Cipher Brief: BRICS began as a meeting of foreign ministers at the United Nations in 2009. What are your thoughts on where the group is today and its economic impact in a time of what seems to be growing influence?
Roule: BRICS represents about 40% of the world’s population and a quarter of the globe’s GDP, but its members’ economic story is no longer one of uniform success. While China and India have enjoyed positive economic growth, the GDP of Brazil, Russia, and South Africa stagnated. The group’s politics has also sharpened, and its members routinely criticize the Western institutions they once courted.
In addition to championing the entry of South Africa, China has advocated to add members to create a BRICS Plus construct since 2017. India and South Africa have been less enthusiastic as expansion would dilute their influence but increase that of Beijing over group deliberations. The recent Johannesburg meeting gave China a diplomatic success, with invitations being issued to Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates to join as full members from January 1 next year.
BRICS meetings are now considered prestigious global gatherings despite the absence of the U.S. and Europe. UN Secretary-General António Guterres attended the Johannesburg summit. Each of the BRICS members seeks to portray their countries as champions of the Global South. China and Russia used the forum to argue that their view of global governance would create a world system more responsive to the needs of developing countries and emerging economies. The group routinely promotes the use of alternative currencies to reduce the power of the dollar and U.S. influence in world affairs.
The Cipher Brief: Tell us more about the drivers that compel many countries to seek membership in BRICS. Is there a common theme that Western policymakers should consider as they deal with the group?
Roule: The group’s purpose has evolved since 2009. The Johannesburg summit underscored the emergence of a fluid multipolarity in world affairs led by the Middle Powers. Russia, China, and Iran have been open in saying that they see the group as a means to escape sanctions pressure and to build a body of friends who will stand with them in any crisis with the West. Other countries see the group as a way to maintain economic engagement with China and Russia.
BRIC candidates include long-time U.S. partners who have become disenchanted with Washington’s uncertain support for their core economic and security interests, strident criticism by the far Left, and a perception that Western countries send mixed messages on their values. A West that loudly walks away from Afghanistan, Libya, Syria, and Yemen simultaneously condemns the Global South for not being more vigorous in its support against Putin’s aggression against Ukraine. Western countries justify the purchase of Russian gas as critical to Europe’s economy but readily criticize other countries for maintaining economic relations with Moscow when doing so supports their national interests. Western engagement with Africa and Latin America has failed to live up to the promises of policymakers during visits that seem more about Western domestic politics than regional challenges.
The BRICS dynamic is also a symptom of what I call a ‘fluid multipolarity’, a new world in which countries - led by rising actors known as ‘Middle Powers’ - pick and choose partners less on long-time relations and shared values and more on specific national interests. For these countries, multipolarity is an attractive reality. These countries don’t wish to be caught in the struggles of Great Powers but will join coalitions that support development and investment in the Global South. In the U.S., we routinely talk of delinking economies and the dangers of dependence. The members of BRICS see the opposite: there is a national economic advantage to be gained in tightening economic relations with nontraditional partners, if only because doing so increases their policy options – to include leverage with the U.S. - and development potential.
BRICS is also evidence that many countries seek a voice they believe isn’t always heard in traditional international institutions. It isn’t hard to see their point. The United Nations (UN) seems ossified and unresponsive to many. BRICS is a creature of an era when small coalitions of like-minded states join to address specific challenges in the absence of collective international action. Such coalitions are certainly more agile and even more productive than international bodies, but they bring risks. A fragmented global community will find it impossible to deal with climate change, poverty, pandemics, regional unrest, and the proliferation of missiles and nuclear technology.
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The Cipher Brief: What do you think the chances are that the BRICS group will someday rival the Group of Seven?
Roule: Certainly, China and Russia would like BRICS to rival the Group of Seven, but there is no evidence this is likely in the foreseeable future, if ever. BRICS has yet to show that it is capable of action that challenges the global order beyond statements. An expanded group will give the Global South a more prominent voice, and the group’s financial connections will complicate economic and diplomatic pressure campaigns against Russia, China, and Iran.
BRICS members represent an array of political, social, and economic systems, national interests, and security issues. BRICS isn’t a security group. Tensions and military clashes between China and India are frequent. Iran has a long history – and likely future – of attacking its neighbors, two of which are candidate members who seek U.S. military support against Tehran. Several of the members are aggressive competitors in the world economy. Whereas BRICS members will find common ground on many issues, the group lacks the shared worldview found in the Group of Seven.
The Cipher Brief: China has played a dominant role in the organization since its establishment. The BRICS bank is located in Beijing, and China’s views echo in many BRICS statements. How do you think the proposed BRICS expansion will impact China’s influence?
Roule: This has been a tough year for China. Chinese President Xi Jinping has succeeded in solidifying his position and vision for China, but not without many challenging moments and disappointments. Beginning with former President Hu Jintao’s embarrassing removal from the October 2022 party meeting to the strange disappearance and replacement of Chinese Foreign Minister Qin Gang, China’s leadership dynamic doesn’t convey the stability President Xi likely wishes. Economically, the picture isn’t better. Downplaying COVID deaths following the abrupt lifting of COVID restrictions, rising youth unemployment and deflation, the struggle to transition from a property and infrastructure-based economy, and the departure of more foreign firms create an image of a sputtering economy.
BRICS engagement is a bright spot for President XI. It gives him a forum to further his drive for political and economic partners in the developing world and with the globe’s leading energy producers. Current BRICS members produce about 20% of global oil production. With the addition of Saudi Arabia, the United Arab Emirates, and Iran, this number jumps to over 40%. We should expect more BRICS efforts to use non-dollar currencies for energy sales.
BRICS also gives a global reach that the Shanghai Cooperation Organization lacks. A map showing current and proposed BRICS members reveals a vast geography rich in minerals, oil, populations, and markets. All of the members of BRICS are currently robust Chinese economic partners with an eye on the Global South, some with large pools of available capital. BRICS offers a financial and political architecture through which China can bypass Western institutions and weaken Western influence.
China’s influence over BRICS is a double-edged sword. Notably absent are any of China’s southeastern neighbors, particularly Indonesia. Neither India nor Brazil wants the group to be seen as a base for China’s influence or a reason for friction with Washington. Many of the proposed members will feel the same. For this reason, China’s ability to use BRICS will have limits.
The Cipher Brief: Let’s talk about Russia. President Putin could not attend this year’s BRICS summit because of an International Criminal Court warrant accusing him of being responsible for the abduction of Ukrainian children and deporting them to Russia. What is Russia’s interest in BRICS?
Roule: The Johannesburg summit seemed to highlight Russia’s weakness. In addition to Putin’s absence, the week saw the humiliating failure of Russia’s moon launch and the suspicious death of Wagner Chief Yevgeny Prigozhin. Russia has little free capital for development assistance, and it blocks the flow of grain which so many developing countries rely on for food and stability. The conference allowed Putin to issue his usual propaganda speech (albeit by video), but Russia found little support for its war against Ukraine. Like Iran, the best Russia could say is that the summit allowed it to show that it is not isolated.
The Cipher Brief: What has been the impact of the BRICS New Development Bank (NDB)? Should we take BRICS rhetoric-dollarization seriously?
Roule: The NDB is one of the few tangible BRICS accomplishments. NDB claims its lending is to resource infrastructure and sustainable development projects in emerging markets and developing countries. It aims to be faster and more responsive to members than the International Monetary Fund and The World Bank. Part of its speed is derived by reducing the time it spends evaluating projects. This decision understandably is opposed by those concerned about environmental damage and corruption. The NDB is open to non-BRICS members, and the United Arab Emirates, Uruguay, Bangladesh, and Egypt are already members. Around fifteen countries seek membership, with a handful likely to join in the next year or two.
The bank’s lending is important to developing countries but relatively modest. Since its establishment, the NDB has approved about $33 billion in just under a hundred projects in BRICS countries. Their lending goal for this year is unlikely to exceed $10 billion, with only 30% of that in local currencies, the rest is a mix of U.S. dollars and Euros. The bank claims it will do more lending in Chinese, South African, and Brazilian currencies to reduce its use of the U.S. dollar. Still, the increase in BRICS members’ currencies will likely remain modest for the foreseeable future. All development aid is valuable, but to put BRICS in perspective, World Bank lending in 2022 alone was over $70 billion.
The idea of a BRICS currency is unrealistic, although China, Russia, Iran, and Brazil routinely push for de-dollarization and will continue to do so. The financial structures, capital markets, and central bank positions of BRICS members vary dramatically. No member would cede that control to a BRICS structure. However, it is likely that we will see some increase in BRICS’ use of member currencies over the dollar in discrete cases. Even here, there will be limits. BRICS members won’t want to create multiple piles of currencies for partner-specific transactions in a world that relies mainly on the much more flexible dollar.
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The Cipher Brief: Let’s look forward. Is further BRICS expansion likely? If so, what countries are likely next to join the group?
Roule: Expansion will have its momentum. As more countries join, others will want to follow for the prestige and access found in membership. China will undoubtedly push for an expansion to include partners it believes to be ideologically, economically, or strategically attractive. India won’t allow China to erode its standing globally and in the developing world. The BRICS summit was nested between Indian Prime Minister Modi’s high-profile visit to Washington and the upcoming Group of Twenty meetings. New Delhi was reportedly unenthusiastic about expansion and delayed its approval until BRICS adopted membership criteria.
Although further expansion is likely, I don’t think expansion will be hurried or involve large numbers of countries, at least for now. Brasilia, Pretoria, and New Delhi have enjoyed this club’s exclusivity and won’t want to become another face in a large crowd. The expansion will inevitably erode some of China and Russia’s ability to shape the group into a disruptive global actor, partly because other members continue to find utility in the Western-led order. BRICS will also need time to absorb new members and understand its new identity. Originally a band of large economies that promised strong growth and acted as a magnet for investment, the 2024 BRICS must somehow blend thriving, fragile, and crisis economies. Only a handful of its members are attractive candidates for foreign investors. Some new members – such as Saudi Arabia – seek their imprint on the global topography. The organization will also need a new name: BRICS Plus? The Group of Eleven?
Regarding future candidates, I think Algeria, Morocco, and Nigeria will be strongly considered.
The Cipher Brief: Last question. How should the West respond to BRICS?
Roule: With its proposed expansion, the BRICS construct has become a serious player in the global ecosystem. It can’t be ignored. But if you can’t stop the train, you should try to lay its tracks. Many of the justifications for the group are reasonable.
Reform the existing system: International institutions need reform that allows a louder voice for the Global South and expedites assistance. A U.S. high-profile push in this regard at the upcoming United Nations General Assembly meeting would find a welcome audience.
We need a western strategy that offers more than facetime: Washington could also demonstrate leadership by developing a strategy for Africa and Latin America beyond the occasional state visit. This isn’t to say that the U.S. doesn’t support these regions, but these efforts are viewed as piecemeal and receive little publicity.
We need partners: Undercutting Chinese, Russian, and Iranian propaganda will require more than strategy and diplomatic engagement. The U.S. needs to show how the West and its parts – such as wealthy Arab states – are working together to execute that strategy with infrastructure projects and business assistance that spurs domestic development as well as the export economies traditionally seen as the goal of international institutions. BRICS could partner in some of our development and diplomatic campaigns.
Energy matters: Regarding exports, we can do ourselves and the world a favor by assisting the Global South with a rational energy plan that allows them to obtain maximum energy from their resources with minimum greenhouse gas emissions. The U.S. can’t tell Africa – where hundreds of millions lack electricity and access to the internet – that we won’t support the use of natural gas as well as solar and other green technologies. Likewise, we must work with the South on energy-related minerals crucial to existing and emerging green technologies. An expanded BRICS will control an extraordinary amount of such minerals, including rare earths (~70%), manganese (~75%), graphite (~50%), nickel (~28%), and copper ~10%). Leaving China to dominate this ecosystem would be foolish.
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