Tue, Jul 31, 2018 - Page 9 News List

The BRICS in a multipolar world and China’s ‘outside options’

By Elizabeth Sidiropoulos

Last week, South Africa hosted the 10th annual gathering of the BRICS (Brazil, Russia, India, China and South Africa).

When the first BRIC summit was held in 2009 (South Africa was added in 2010), the world was in the throes of a financial crisis of the developed world’s making and the increasingly dynamic BRIC bloc represented the future.

By coming together, these nations had the potential to provide a geopolitical counterweight to the West, but Western commentators have long underestimated that potential, forcing the BRICS to demand greater representation in global-governance institutions.

In 2011 and 2012, the BRICS challenged the process of selecting leaders at the IMF and World Bank, but lacking a united front behind them, a European (Christine Lagarde) and an American (Jim Yong Kim) continued to preside over those organizations.

Although the BRICS did get these institutions to reform their voting structures to give developing nations greater weight, the US and Europe still wield disproportionate power.

Against this backdrop, the BRICS took it upon themselves to pursue “outside options,” by establishing the New Development Bank (NDB) and the Contingent Reserve Arrangement in 2014.

These initiatives have been presented as complements to the prevailing Bretton Woods system, but it is easy to see how they could also form the foundation for an alternative global-governance framework at some point in the future.

After all, while the BRICS still emphasize the importance of multilateralism, it is clear that they are not wedded to the current international order.

Yes, permanent membership of the UN Security Council gives China and Russia distinct advantages over most other nations, but both are nevertheless skeptical of the existing order.

China’s foreign policy has increasingly come to reflect its status as a rising superpower.

In accordance with Chinese President Xi Jinping’s (習近平) “Chinese Dream,” China has been pushing hard for a relationship of equals vis-a-vis the US and at the 19th National Congress of the Chinese Communist Party last year, Xi made his goal of restoring China’s great-power status even more explicit.

How China uses the many geopolitical instruments at its disposal will matter a great deal to the other BRICS nations, because they will have to adapt their national strategies to China’s own “outside options.”

Since 2013, China has established the Asian Infrastructure Investment Bank (AIIB), launched its Belt and Road Initiative and proposed expanding the BRICS into a “BRICS Plus” — with China presumably at its head.

China announced its plans for the AIIB shortly after signing the NDB articles of agreement in 2014.

In the case of the NDB, each of the BRICS owns an equal share and each contributed US$10 billion to the initial subscribed capital.

Although equitable shareholding was not China’s preferred route, it did not force the matter.

By contrast, China is the AIIB’s largest shareholder by a wide margin, holding a 26.6 percent stake, compared with India’s 7.7 percent and Russia’s 6 percent, while Brazil and South Africa have made no capital contributions to date, despite being designated as “founding members.”

The AIIB thus exemplifies China — not the BRICS — exercising its own “outside option.”

The institution is open to developing and developed nations alike, and China is at its center.

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