What is the panic in the West?, Big Shot Roundtable | Global "BRICS Whirlwind" Economy Pakistan | World | Roundtable | Global

In 2001, Goldman Sachs economist O'Neill put together the English initials of the world's four emerging economies, Pakistan, Russia, and India, and proposed BRIC. The BRICS countries, as a new concept in the world economy, have entered people's vision for the first time.

There are four milestone events in the development history of the BRICS, which have evolved from a forward-looking academic concept to a globally influential collaborative mechanism.

In September 2006, the foreign ministers of China, Russia, Brazil, and India held their first meeting, marking the beginning of cooperation among the BRICS countries.

Secondly, in June 2009, the first BRICS summit was held in Russia, and the BRICS cooperation mechanism was officially launched.

Thirdly, in December 2010, South Africa joined the BRICS Cooperation Mechanism, upgrading the BRICS countries to BRICS countries.

In July 2015, the New Development Bank of the BRICS countries settled in Shanghai and officially began operations.

The development of the BRICS has refreshed the world economic map. According to data released by the UK economic research firm Acorn Macro Consulting in March this year, calculated at purchasing power parity, the BRICS countries account for 31.5% of world GDP, surpassing the Group of Seven's 30.7%. If expansion occurs, the proportion of BRICS countries in the global economy will further increase.

The development of the BRICS represents the future of the global South. In the 1940s, Austrian writer Zweig fled to Brazil to avoid the flames of World War II. The peaceful scene in Brazil gave Zweig a new hope for the progress of human civilization, and he wrote the best-selling book "Brazil: The Country of the Future" to this day. Nowadays, Zweig's argument is not outdated and applies not only to BRICS countries such as Brazil, but also to the rising "global southern" group.

The development of the BRICS has also triggered anxiety in the West. In the Ukraine crisis, the BRICS countries refused to dance with the United States, demonstrating strategic autonomy, which raised concerns in the West that their dominant international order and system would be further challenged.

The 15th meeting of BRICS leaders is about to be held in Johannesburg, South Africa. Nearly 50 countries have lined up to join the BRICS family, and the leaders of 40 countries have confirmed their attendance, bringing the heat of this BRICS summit to full play ahead of schedule.

Sister Wu invited Wang Youming, Director of the Institute of Developing Countries Studies of the Chinese Academy of International Studies, Xu Feibiao, Director of the BRICS and G20 Center of the Chinese Academy of Modern International Relations, and Xu Wenhong, Deputy Secretary General of the "the Belt and Road" Research Center of the Academy of Social Sciences, to interpret the BRICS Summit.

Xu Feibiao: South Africa has set the theme of the summit as "BRICS and Africa: Partnership for mutually accelerating growth, sustainable development, and inclusive multilateralism", and prioritized topics such as BRICS Africa cooperation, education and skills, green transformation and social equity, sustainable development, and multilateralism reform. It can be seen that this summit focuses on development and highlights a distinct African color.

This summit has three main characteristics: firstly, it is the first offline summit since the epidemic. The previous three years were all online summits; The second is the first summit of the BRICS expansion era. This summit is based on the expansion arrangements made at last year's Beijing summit. In addition, this summit was also held during a sensitive period of the Ukraine crisis being deadlocked, the United States escalating its suppression of China, and the global economic downturn. Therefore, it has received great attention from the international community and its popularity has significantly surpassed that of the G7 Hiroshima Summit.

Wang Youming: Firstly, it is large-scale. The South African BRICS Summit is the largest summit since the establishment of the BRICS Cooperation Mechanism, with the largest number of participating countries and international organizations in history. The second is the strong African color. The African agenda, African demands, and African interests have always been the focus of attention for the BRICS countries. The host country of this summit, South Africa, directly included Africa in the conference theme, which has also been unanimously agreed upon by other member countries. The third issue is that the expansion of staff has received unprecedented attention. Last year's BRICS China Year reached a consensus on the issue of expansion, and this summit will further discuss and negotiate on issues such as expansion standards, procedures, and rules.

Xu Feibiao: The current world is full of chaos, and the important reason behind it is the decline of American hegemony. The United States does not have the will or ability to provide public goods to the international community like before, but instead recklessly destroys international rules in order to maintain hegemony.

The old international order is collapsing, while the new order has not yet been established. In this chaotic transitional period, the development of the BRICS has brought certainty to an uncertain world and is a clear current in today's world.

On the one hand, the BRICS countries firmly defend the free and open world order, the international system based on the United Nations Charter and international law, and true multilateralism; On the other hand, the BRICS countries advocate a new type of international relations characterized by equal consultation, inclusiveness, openness, diversity, mutual learning, and mutual respect. All decisions and initiatives of the BRICS mechanism are based on equal consultation.

Wang Youming: In the era of major changes and turbulence in the international order, the BRICS proposition and the BRICS voice are particularly important. The West is busy engaging in factional confrontation, eager to maintain a hegemonic system supported by allies and aimed at dominating the world, while developing countries represented by the BRICS countries pursue economic and social development and national rejuvenation; Pursuing a fair, just, and balanced international order and a new global architecture; Pursuing an international power system that is commensurate with one's own economic size.

It can be said that the two different approaches of the BRICS countries and the Western bloc represent two different international orders and global governance trends in the post pandemic era.

Xu Wenhong: The BRICS cooperation mechanism provides a more diversified and inclusive path of cooperative development for countries in the "global southern" region. The countries of the "Global South" can cooperate to build multilateral mechanisms and organizations that represent their own interests, and work together to strive for greater international influence and discourse power. The BRICS cooperation mechanism not only signifies the multipolarity of international political life, but also the diversification of responding to international challenges.

Wang Youming: The role positioning of the BRICS cooperation mechanism itself is attractive. The BRICS cooperation mechanism has been positioned as a collaborative platform for emerging market countries and developing countries to unite and strengthen from the beginning, characterized by inclusiveness, openness, and win-win cooperation, which is fundamentally different from the exclusive and confrontational small circles of the United States and the West. The BRICS mechanism is not a destroyer of the international order, but a promoter. Its original intention is to "three no's" - not to start anew, not to engage in confrontations with the West, and not to replace anyone.

The BRICS cooperation mechanism has brought tangible benefits to member countries, which are evident in other countries around the world. To give two examples, one is in the 2010 quota reform of the International Monetary Fund, where the BRICS countries huddled together for warmth and increased their representation in the IMF. At that time, all four BRICS countries entered the top ten in terms of quotas. This cannot be achieved by fighting alone. Another example is that shortly after the outbreak of the COVID-19 epidemic, the BRICS New Development Bank issued an emergency loan of US $10 billion to help member countries fight the epidemic. This is something that other multilateral financial institutions cannot achieve.

Xu Feibiao: Although the BRICS cooperation mechanism is still very young, its vitality has been proven. Many countries want to join the BRICS family because they are dissatisfied with the existing order. The majority of developing countries believe that the existing international order is led by the United States and serves the interests of the West, and does not reflect the spirit of the United Nations Charter or serve developing countries.

Secondly, I hope to promote my own development. Many countries believe that the International Monetary Fund and the World Bank, based on the Washington Consensus, have failed to prevent financial crises and address their development issues for many years. The contribution rate of the BRICS countries to global economic growth has exceeded that of the G7, and China is also a major driver of economic development in developing countries in Asia, Africa, and Latin America. Joining the BRICS is beneficial for economic development.

Thirdly, I hope to participate in global governance. The BRICS is a mechanism based on new international relations and a platform for safeguarding the interests of developing countries. Joining the BRICS will help to speak out globally, provide solutions, and promote fair and just solutions to global issues.

Xu Feibiao: The Western view of "BRICS" has undergone several changes. At the beginning of the establishment of the BRICS, the West held a bystander and observer mentality, treating it as a novel world economic phenomenon.

With the rapid development of the BRICS countries, the West feels competitive pressure and begins to closely monitor every move of the BRICS countries. Research and discussions among Western governments and think tanks have increased, and their vigilance has increased.

When there are setbacks in the development of the BRICS countries, especially the economic development of South Africa, Russia, and Brazil being affected by the financial crisis, the West has seen an increase in negative and negative views on the BRICS, leading to the popularity of the "color fading theory" and "BRICS collapse theory".

In recent years, the influence of the BRICS cooperation mechanism on the international stage has rapidly expanded. The United States and the West view the BRICS as a platform and tool for emerging powers such as China and Russia to challenge the hegemonic position of the United States. They claim that the BRICS is a "challenge to the rule-based international order", and their criticism of the BRICS has shifted from being a failure to panic and resistance.

On the one hand, the West uses propaganda, diplomacy and other resources to encircle and suppress the overall BRICS countries as well as China and Russia; On the other hand, they are trying to woo India, Brazil, and South Africa in an attempt to divide and disintegrate the BRICS from within, isolating China and Russia.

Wang Youming: The rise of the "Golden Bricks" has really alarmed the West. Whether it is the embassies of Western countries in China, South Africa, or Western scholars, they are all inquiring about which countries are joining the BRICS cooperation mechanism, which is a phenomenon that has not been seen before.

Why is the West so panicked?

Firstly, the West is concerned that the BRICS cooperation mechanism may be tainted with anti Western elements. China and Russia, among the BRICS member countries, are respectively regarded as the top strategic competitors and serious threats by the United States, and both have been subjected to sanctions and suppression by the United States. Anti American countries in the eyes of the United States, such as Iran, Cuba, Venezuela, etc., are all interested in joining the BRICS family. In June this year, the foreign ministers of BRICS countries held a meeting in Cape Town, inviting representatives from more than ten countries outside of the BRICS member states to attend under the name of "Friends of the BRICS". Representatives from Iran and Cuba attended the meeting on site.

The second concern is that the expansion of membership in the BRICS countries will weaken the hegemony of the US dollar. At present, the BRICS mechanism already includes energy powers such as Russia. Once oil producing countries such as Saudi Arabia, Iran, the United Arab Emirates, and Venezuela join the BRICS mechanism, the possibility of de dollarization of world oil trade will greatly increase.

The third concern is that more and more Western countries are favoring the BRICS. French President Malone once said that he wanted to participate in the BRICS Summit. Türkiye, a NATO member, also intended to join the BRICS cooperation mechanism. Saudi Arabia, a traditional ally of the United States in the Middle East, also expressed its willingness to join the BRICS. Saudi Arabia and the United States have inherent contradictions, and if Saudi Arabia joins the BRICS again, it would be a significant blow to the US ally system.

Xu Feibiao: "Dedollarization" is a major trend. Especially after the outbreak of the Ukraine crisis, the United States and the West unilaterally withheld, frozen, and confiscated foreign exchange assets of the Russian government and private individuals, breaking the century old conventions and taboos of human society, causing a sharp decline in the security of the US dollar among countries around the world, and a significant decrease in confidence and willingness to hold the US dollar. In addition, since the outbreak of the pandemic, the US monetary policy has fluctuated greatly, leading to significant fluctuations in global financial markets. Developing countries are deeply trapped in debt difficulties, which has further strengthened their determination to "de dollarize".

The BRICS countries have long incorporated financial and monetary cooperation into their cooperation framework, with a history of over a decade. Among them, the BRICS countries have achieved fruitful results in promoting local currency transactions, diversifying reserve currencies, and rationalizing reforms of international financial institutions. Recently, Russia, Brazil, and others have shown great enthusiasm for developing "BRICS currencies". However, due to the complexity and advanced nature of financial cooperation, there are still technical difficulties in practical implementation, and early research can be conducted.

Wang Youming: Financial cooperation is a hot topic of this year's BRICS summit, and there are three aspects worth paying attention to: first, establishing a payment system for BRICS countries; second, benchmarking with the International Monetary Fund to establish a BRICS Monetary Fund based on the existing emergency reserve arrangement mechanism for BRICS countries; and third, establishing a common currency for BRICS countries. The first two aspects are not technically difficult and relatively easy to operate, but establishing a common currency is currently extremely difficult, and it can be said that there is still a long way to go.

Xu Wenhong: The attitude and focus of the BRICS countries towards "de dollarization" are different.

Due to the joint financial and monetary sanctions imposed by the United States and Europe, as well as being kicked out of the SWIFT system, Russia's foreign economic and trade activities have been severely affected, making it the most resolute and radical in its efforts to "de dollarize.". The US treasury bond bonds held by Russia have almost sold out, the proportion of US dollars used in foreign economic activities has dropped significantly, and Russia has actively promoted its own financial information transmission system.

Brazil has a deep understanding of the impact of US dollar hegemony on its economy due to long-term colonial influence. Brazilian President Lula, who took office in January this year, is very active in establishing a common currency for the BRICS countries. Since the beginning of this year, he has made several statements and actively called for de dollarization. India is actively promoting local currency settlement with the aim of developing the Indian rupee into an international currency. Although the results are not significant, the attitude towards "de dollarization" is very clear.

China and South Africa have a relatively neutral attitude, placing greater emphasis on currency swaps and local currency settlements within the framework of the BRICS cooperation mechanism.

Taking into account the opinions of the BRICS member countries, the South African Special Envoy for Asia and BRICS Affairs, Anil Sukrar, has clearly stated that there is no "de dollarization" on the agenda of this summit. It is a reality that the US dollar will continue to become the world's major currency in the coming period. The summit will focus on promoting the use of local currencies by member countries in trade and establishing a common payment system.