By Maurizio Sacchi

Former Brazilian Head of State Dilma Rousseff (2011-2016) was elected on 24 March as the new President of the NBD (New Development Bank), the economic body of the so-called BRICS countries: Brazil, Russia, India, China and South Africa. Roussef’s term will last until 2025, with the woman replacing another Brazilian, diplomat Marcos Prado Troyjo. Prado Troyjo, whose candidature had been promoted by former Brazilian president Jair Bolsonaro, resigned from the post on 10 March, paving the way for Lula’s protégé. Rousseff, in fact, had been proposed for the post by her political godfather and current Brazilian head of state, Luiz Inácio Lula da Silva, in power since 1 January. The move was to precede Lula’s state visit to China, currently Brazil’s main trading partner. The visit has now been cancelled due to the health condition of the Brazilian president, who is allegedly suffering from bacterial pneumonia.

The NBD, which is based in Shanghai, was created in 2014, when Rousseff was president of Brazil, succeeded Lula in 2011 and remained in office until she was impeached in 2016 by Congress in an impeachment trial for alleged budget mismanagement. The New Development Bank was established with the aim of mobilising resources for infrastructure and sustainable development projects, and is a $100 billion ‘Development Bank’ created by the BRICS to overcome the lack of predictability of the Supplemental Reserve Facility (SRF) of the International Monetary Fund and the European Central Bank (ECB). The founding countries, Brazil, Russia, India, China and South Africa, announced its formation nine years ago after a summit of their heads of state in Fortaleza, Brazil. The seat is in Shanghai, and the first five-year presidency was by New Delhi. Beijing contributed 41 billion dollars to its foundation, Brasilia, Moscow and Mumbai 18 billion and Pretoria 5 billion.

The BRICS countries – Brazil, Russia, India, China and South Africa – share a growing desire to challenge the hegemony of the dollar. And thus to create an alternative international exchange currency, issued precisely by the New Development Bank. Last June, Russian President Vladimir Putin declared that the BRICS were working on the development of a new reserve currency based on a basket of currencies for member countries. Russian Foreign Minister Sergei Lavrov said in January that the issue would be discussed at the BRICS summit in South Africa at the end of August.

The President of Brazil, Luiz Inácio Lula da Silva, has also expressed vague support for the possibility of a common currency for the BRICS, albeit not in the near future. This possibility, until recently considered more theoretical than real, is gaining ground, especially in the face of volatile international markets. The authoritative Financial Times also devotes an analysis to this: ‘The problem is that BRICS is not a particularly useful economic term. It combines an economic superpower in China and a potential one in India with three essentially stagnant commodity exporters’. This is illustrated by clear economic data: between 2008 and 2021, real GDP per capita increased by 138% in China, 85% in India, 13% in Russia and 4% in Brazil, while South Africa saw a 5% contraction.

According to the most recent IMF data, China’s GDP share of the BRICS as a whole is 72%. Moreover, China is in a key position vis-à-vis the other members, mostly exporters of raw materials, which are closely linked to China’s production performance. In short, the BRICS alternative to the US is not a diverse group of growing countries, but a country – China – with a great thirst for energy and other raw materials. In seeking to challenge US hegemony in foreign trade, the non-Chinese members of the grouping may find themselves in a position of equal or greater dependence, this time on Beijing.

But beyond its economic significance, the BRICS challenge has a strategic significance. In the context of the so-called ‘new world order’, which is supposed to result from a post-Ukraine peace process, it has the value of a challenge to US/European hegemony in the economic field. On 27 June 2022, Iran and Argentina also applied to join the BRICS mechanism, a few days after a summit of the five-nation bloc during which leaders agreed to continue discussing the possibility of admitting new countries to the grouping on the basis of ‘full consultation and consensus’. But on the political and strategic level, apart from the obvious imbalance between the dominant power of China and the others, there is little that the five countries have in common: from the system of government to geopolitical interests and, above all, the conception of democracy and human rights. But China’s move is more than a provocation and represents its attempt to be the protagonist and leader of an alternative to the secular hegemony of the West and its allies.


Cover image: by Alan Santos PR – WIKIMEDIA; all rights reserved