Indian Defence Review

There is perceptible glee in the US over Russian President Vladimir Putin physically not attending the upcoming 15th BRICS (Brazil, Russia, India, China, and South Africa) Summit scheduled in Johannesburg, South Africa on August 22-24. The Russian delegation would be headed by Foreign Minister Sergey Lavrov while Putin will speak via video link. Western media says it would be difficult for Russia to claim BRICS leadership, or even perform the role of arbitrator.

Plans of French President Emmanuel Macron to attend the BRICS summit appear dashed as he is not invited. Russian Deputy Foreign Minister Sergei Ryabkov says, “Clearly, leaders of states that pursue such a hostile and unacceptable policy towards us, discussing with such emphasis and conviction that Russia should be isolated on the international stage, and share the common NATO line on inflicting a so-called strategic defeat on us… is an inappropriate BRICS guest…”.

Concurrently, the West has called the Russia-Africa Summit in July 2023 a fiasco with only 17 countries attending of the 49 invitees. But this deliberately obfuscates facts because aside from Heads of State from 17 countries, there were high-level representations from another 22 countries, and from seven multilateral organizations. Only three countries did not participate; one because of the coup (Niger), another chose African Union (AU) to represent them, and the third for lack of diplomatic relations with Russia. The AU called for a ceasefire in Ukraine but US-backed Ukraine President Volodymyr Zelenskyhas been stonewalling ceasefire talks.

Russia pulled out from the ‘Black Sea Grain Deal’ because the West failed to keep its part of the deal. America wants to raise violence levels in Ukraine by using Zelensky to continue attacking Crimea and launch drone attacks on Moscow. Seymour Hersh, who revealed how the US orchestrated sabotage of Russia’s Nord Stream pipelines, has now uncovered how a British underwater drone was recently used to attack the Kerch Bridge linking Crimea.     

The US-led West has subjected Africa to colonialism, apartheid and has been looting resources over several decades, because of which Africa dislikes the West. Putin has offered free grain shipments to Africa. The US-NATO will endeavour to block Russian shipments to Africa from ‘any’ route, hoping it would turn Africans against Russia. But hunger pangs in Africa could lead to violence against Anglo-Saxons on that continent. Putin concluded agreements on military-technical cooperation with more than 40 African states at the summit and said that Russia supplies part of the weapons and equipment to Africa free of charge in order to strengthen the security and sovereignty of these countries.

The US-NATO has been gloating over Russia’s “waning influence” but view this in backdrop of the US literally beseeching China to stabilize ties with the West – European delegations to China, visits by Bill Burns, Blinken, Yellen, John Kerry, even Henry Kissinger, and the comical semantics of ‘de-coupling’ and ‘de-risking’. Australian Prime Minister Anthony Albanese wants China to lift trade barriers as his country seeks to balance its economic and security relationship with China.

But former Australian Prime Minister Paul Keating recently said that NATO’s very existence after the end of the Cold War “has already denied peaceful unity to broader Europe.” He further said exporting such “malicious poison (NATO) to Asia would be akin to Asia welcoming the plague upon itself.”He described NATO Secretary General Jens Stoltenberg the “supreme fool” on the international stage who is conducting himself like an “American agent.” 

When the issue of de-dollarization first emerged due to America arbitrarily freezing funds in central banks of foreign countries and denying them the ‘swift’ banking system, America scoffed at the idea. But last month the US Dollar’s share of global reserves (73 percent in 2001) dropped to below 47 percent. Americans continue to say that de-dollarization will never happen in their lifetime, but it may be sooner than they expected. This is the reason why the US is going after countries that are dumping the US dollar and going for an alternate currency and banking system.

In April 2023, BRICS announced plans to introduce a new reserve currency to boost intra-BRICS trade and eliminate dollar conversion costs in international transactions. Once consensus is achieved, BRICS plans to introduce a digital or an alternative currency. China is promoting the Yuan as the alternative with more than 17 percent of its reserves in Yuan. Russia would be amenable to this but Brazil, India and South Africa would like a different reserve currency for understandable reasons. Consensus on common alternate BRICS currency will not be easy.

Although India is presently importing crude oil from Russia in Chinese Yuan, External Affairs Minister S Jaishankar told media on July 3, 2023 that India has no plans for a BRICS currency. This would be music to Washington although India would be looking to promote the INR in bilateral trade and stop the Chinese Yuan from becoming the BRICS currency.

Analysts argue whether BRICS has the ingredients to introduce a global currency; the requisite economic size and financial outreach?!America’s GDP of around US$25.46 trillion constitutes24 percent of the world’s GDP, whereas, BRICS current GDP of over US$32.72 trillion, translates to31.59 percent of global GDP. As mentioned above, US$ share of global reserves has dropped to 47 percent. Jim O’Neill of Goldman Sachs predicted in 2001 that BRICS would collectively dominate the global economy by 2050. But already BRICS has overtaken the G7 in terms of PPP; indicating BRICS economy will continue to expand and that of G7 will shrink.

This is only half the story. Not only are Argentina, Iran, Saudi Arabia and the United Arab Emirates looking to join BRICS, South Africa’s BRICS ambassador, Anil Sooklal, told media in July 2023 that 22 countries have formally approached BRICS to become full members and an equal number have been informally asking about becoming BRICS members. BRICS, therefore, should get greater economic size and financial outreach in the near future to float a global currency.

BRICS expansion would be a priority agenda at the 15th BRICS Summit this month. Most likely the common alternate currency would also be discussed although a consensus is unlikely. However, even if there is no consensus on a common reserve currency, BRICS countries could agree to bilateral trade in mutually agreeable local currencies, perhaps using the Chinese Yuan where necessary like India is doing. This would give impetus to de-dollarization. On the other hand, as and when consensus is reached over a common alternate currency in the future, the expanded BRICS would be an alternative to the US.

The US is aware of these developments and that is why it wants to tackle Russia and China one by one, as well as deal with Iran and others. There is speculation that the US has already made Russia an outcast (?), effected regime change in Brazil, South Africa would be a cake walk and India can be taken down democratically without direct war to kill challenges to the Dollar through Rupee payments.

The US policy of sanctions, however, has proved less than effective. No doubt it has the “malicious poison” of NATO (as described by Paul Keating) but Russia, China and India are the second, third and fourth strongest military powers respectively in the world after the US. Admittedly, India and China have a border dispute (which the US wants to exploit strategically and economically through and India-China war) and BRICS is not a military alliance. But would it be feasible for the US to break up BRICS and stop its expansion; taking on a 40 to 45-nation BRICS bloc without hastening its own demise?

Finally, former Pentagon adviser Douglas McGregor says, “NATO may not come out unscathed from this war in Ukraine, and I believe that there will be a change of governments in Europe ……. new leaders who will say why we are going after these Americans? ….. We lack diplomats and mature and moderate military leaders, and today we only have people whose ideology has blinded them to the truth, so it is difficult to do something good with us.”It is unlikely that the US administration would pay heed but that is how regimes fall.