By George Monastiriakos
Two weeks ago, the BRICS announced that Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates will join the “alliance” in 2024. Despite widespread enthusiasm in anti-Western circles, the soon-to-be 11-member economic bloc is a partnership of convenience. It is not a long-term alliance nor a strategic threat to the United States. The criteria to join the BRICS are vague. There is no charter and no fixed secretariat. Not even a functional website. This paper tiger also has a long list of structural challenges to overcome. Its ideological incoherence, characterized by issues ranging from internal conflicts of interest to divergent international perspectives, will pose complex challenges to the “bloc” for the foreseeable future.
Argentina and Egypt are locked in endless economic crises. Both countries are fundamentally bankrupt due to the incompetent management of the Argentine and Egyptian governments. They remain heavily indebted to their international creditors, namely institutions set up by the United States. As the two biggest debtors to the International Monetary Fund, their joint interest in joining the BRICS is to balance their dependence on the West by shifting their financial burdens onto the shoulders of other potential creditors. While Beijing is likely to take advantage of Argentina’s and Egypt’s devalued currencies to purchase assets at bargain prices and increase the number of transactions concluded in yuan rather than dollars, Buenos Aires and Cairo benefit from increased foreign direct investment and renewed access to foreign currency.
Ethiopia was ravaged by the Tigray War. That devastation is aggravated by drought and famine in the north of the country. Although Ethiopia is experiencing exponential economic growth, the above-mentioned crisis is exacerbated by historic capital flight. Professor Alemayehu Geda estimates that Ethiopia registered at least $45 billion in capital outflows over the last decade. He also emphasizes that this sum exceeds the total amount over the previous 44-year period. While Saudi Arabia and the United Arab Emirates provided invaluable security assistance to the Ethiopian government during the civil war, the largest volume of foreign direct investment in Ethiopia now comes from China. Consolidating all these relationships by joining the BRICS is a low-hanging fruit rather than a diplomatic power play.
Iran is sanctioned by the United States. Like Moscow and Pyongyang, Tehran now finds itself caught in Beijing’s grasp. Despite the “diplomatic rapprochement” brokered by China, the greatest national security threat to Saudi Arabia and the United Arab Emirates is still Iran. Tehran supports several terrorist groups in the Middle East. It has enriched uranium up to at least 60 percent, 20 times more than the allowable amount under the now-defunct JCPOA. While Iran has previously launched drone strikes against both of its neighbors, the IRGC continues to hijack ships in the Strait of Hormuz and engage in hostage diplomacy. To fan the flames, several unresolved territorial disputes remain in the Persian Gulf region, including the Abu Musa Islands impasse between Tehran and Abu Dhabi. By joining the BRICS, Saudi Arabia and the United Arab Emirates balance their dependence on Washington for security with their economic relations with Beijing and Delhi. It also provides them with an additional forum for diplomacy with Tehran should the need arise.
China, along with Saudi Arabia and the United Arab Emirates, are three of India’s top five economic partners. Nevertheless, Delhi and Beijing remain at odds on a multitude of issues. Despite concerns about America on China’s side, and Pakistan on India’s, Delhi and Beijing are undoubtedly each other’s greatest long-term geopolitical threat. Before the end of the 21st century, China and India will both be major powers that share a border longer than 3,400 kilometers. Without diving into the details of their long-standing border disputes, climate change, which exacerbates water scarcity and food insecurity, will be an endless source of tension for these two countries. Their political systems are also incompatible. China and Russia do not benefit from the “democratic peace.” This increases the likelihood of a large-scale military conflict over time. For these reasons and others, India balances its dependence on Russian armaments and its economic relations with China by being a member of the Quad, a security forum with Australia, Japan, and the United States.
Unlike the BRICS, Western institutions led by Washington are united by core values like democracy. NATO, the pillar of the West, is the most successful international organization in history. Despite its critics, this shield has successfully protected North American and European democracies since the end of World War 2. In fact, no revisionist state has attempted to use military force to violate the territorial integrity of a NATO member state for nearly eight decades. Unfortunately, the same cannot be said for other Eurasian countries outside the alliance, such as Cyprus, Georgia, Moldova, and Ukraine. NATO’s success is replicated by other Western institutions, which include political establishments like the European Union, diplomatic forums such as the G7, a long list of free trade agreements, and security pacts between the United States and Japan, Washington and Seoul, and AUKUS.
The risk of so-called “de-dollarization” posed by the BRICS is overexaggerated. Barring a global cataclysm, such a radical change will not happen overnight. In fact, the United States is the only country with an economy big enough and a currency and banking system stable enough to guarantee international transactions. China, the only alternative, maintains strict capital controls, which favors its export-led economic growth but strangles cross-border payments. It’s important to highlight that capital does not only look for markets, and investors do not only seek to make profits. They seek, among other things, the rule of law, protection of intellectual property rights, a stable currency, a sound banking system, limits on state intervention, and political stability. Unlike Beijing, Washington fulfils all these criteria with flying colors.
The United States has another advantage over the BRICS: it remains a magnet for attracting foreign talent. Unidirectional migration flows from the BRICS to America illustrate this best. This provides the United States with an endless pool of talent ranging from low-skilled labor to highly trained segments of the workforce. Consider four of the ten biggest American companies in terms of market capitalization: Microsoft, Google, Tesla, and NVIDIA. Each of these has either founders or CEOs who were born abroad, including in the BRICS, were educated in America, settled down in the United States, and proudly acquired American citizenship. This phenomenon won’t change any time soon. The United States, a free, prosperous, and opportunity-filled country, will continue to poach and attract the crème de la crème from around the world for years to come. As it stands, the BRICS has no credible alternative to the American dream.
Military primacy aside, the United States is still an economic powerhouse. California, with a population of 40 million, has a GDP equal to India‘s with less than 3% of its population. Having already exceeded the GDP of France and the United Kingdom, the Golden State is poised to overtake Germany to become the world’s fourth-largest economy. Unless Delhi beats it to the punch. Despite the enormous disparity between their respective populations, Texas has an economic weight comparable to that of Brazil or Russia. More surprisingly, New York City has a GDP greater than that of Saudi Arabia, three times that of the United Arab Emirates, four times that of South Africa, and at least ten times that of Ethiopia. Likewise, Florida‘s economy is three times that of either Iran or Egypt. Finally, the states of Illinois, Pennsylvania, Ohio, Georgia, New Jersey, North Carolina, Washington, and Massachusetts all have economies larger than Argentina.
The BRICS is a house of cards, not a strategic threat to the United States. Even if the “bloc” succeeds in expanding China’s economic tentacles and projecting Chinese power in the short-term, the BRICS is still plagued by divergent interests and internal tensions that have doomed it to failure. While Beijing is just learning how to build long-lasting alliances, Washington has centuries worth of experience in spearheading and managing complicated but mutually beneficial bilateral and multilateral partnerships. Given NATO’s rejuvenation, the global coalition in support of Ukraine, the emergence of AUKUS, the trilateral summit between America, Japan and Korea, and the looming Saudi Israeli peace agreement, US-led initiatives will remain indispensable for global diplomacy and security long into the future. The risk of being threatened – let alone replaced – by a paper tiger like the BRICS is slim to none.