BRICS 2017 - poised for new relevance
After two years of sliding fortunes, the BRICS have an opportunity to assume a bolder global leadership role
- Next week (3 – 5 September) leaders of the five BRICS nations will converge on the Chinese city of Xiamen for the ninth annual BRICS Summit. Though China has positioned the summit as a continuation of BRICS solidarity, the bilateral and geopolitical realities underpinning the grouping are increasingly complex, and much of the enthusiasm which first accompanied its formation in 2009 has waned in response (in large part) to the recent economic decline amongst many of its member states. Indeed, over the past two years BRICS GDP growth averaged just 1.9%, down from 4.4% in the preceding three years.
- Further, in some instances fairly seismic political shifts within individual BRICS economies (most notably in Brazil) have led to an alteration in the vigour behind the participation from some of the member states in the grouping’s activities. Notably, of the five heads of state that attended the first full BRICS Summit (including SA) in 2011, only South African President Jacob Zuma remains in office.
- For Africa, the rampant post-2000 momentum of trade growth with the BRICS has certainly ebbed. In 2016 total BRICS-Africa trade amounted to USD248bn, down from a peak of USD366bn in 2014. Notably, Africa’s exports to China have declined from a 2013 peak of USD113bn to USD55bn in 2016; while Brazil’s recent economic recession has precipitated a 70% decline in the value of its imports from Africa since 2013.
- However, though the BRICS heads of state will meet with these challenges in mind, there remains clear and growing space for the BRICS to continue to nurture the enthusiasm and developing world emphasis that their formation arose to represent.
- First, the BRICS economies have likely reached a cyclical bottom in their respective economic cycles, with average growth of 3.2% expected this year. And the proportionate global relevance of the BRICS has continued to rise: between 2009 and 2016 the BRICS collective share of global GDP increased from16% to 22%. Over the past decade the BRICS have accounted for nearly 50% of the world’s GDP growth.
- Second, though trade values have declined, the BRICS are still a collectively profound trading partner for developing economies in general and Africa in particular. Recent declines in BRICS-Africa trade must be seen within the context of a far more profound drop-off in, for instance, US-Africa trade since 2012.
- Third, though little of concrete substance has emerged from past BRICS summits, there have been material recent advances with regard to the functioning of the New Development Bank (NDB) which aims to provide an alternative source of financial support and infrastructure financing for the BRICS and other emerging economies.
- Finally, and critically, the rhetorical and practical retreat by key advanced economies (in particular the United States) from their commitment to global multilateral agreements on, for instance, climate change; as well as a recent rise in economic nationalism and protectionism provides the BRICS with the opportunity to boldly assume a new and profoundly constructive global leadership role in championing these same causes, and confirming their adherence to some of the more important platforms of international cooperation that recent political shifts in the advanced world have begun to undermine.
- This report discusses the most salient political and economic challenges that the BRICS grouping has faced since its initial gathering in 2009; provides an update on BRICS-Africa trade flows in the context of the continent's broader external framework of engagements; and unpacks the agenda of the BRICS Xiamen Summit, underlining why we believe that a range of forces offer the BRICS the opportunity to assume new relevance at a time of clear global geopolitical inflection.