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Monday, December 23, 2024

Why Are Latin American Dictators Seeking Membership in BRICS+?


From October 22–24, 2024, BRICS nations—Brazil, Russia, India, China, and South Africa—met in the Russian city of Kazan for their highly anticipated yearly summit. While BRICS summits rarely produce groundbreaking final documents, a product of their internal diversity, this summit was notable for several developments. It saw the addition of Egypt, Ethiopia, Iran, and the United Arab Emirates (UAE) for their first summit. Second, dozens of countries have applied to join BRICS, including Latin America’s dictatorships. Yet, major questions persist about the future of the grouping and how it will present itself as an alternative to the status quo.

Q1: What is the BRICS grouping?

A1: Originally identified by Goldman Sachs’ economist Jim O’Neill as experiencing the most rapid growth until 2001, BRIC—Brazil, Russia, India, and China—formed as a group of emerging market economies seeking to represent those interests on the global stage. In 2009, Russian president Vladimir Putin hosted the first official BRIC summit, and China (PRC) invited South Africa to join a year later. Besides their projected growth, the five countries that comprised BRICS until this year have very little in common—each finding their own reason for attending BRICS summits. In fact, after numerous meetings, the bloc made little progress toward building a cohesive identity. Part of this rests in the starkly divided ways each country approaches BRICS. Brazil, India, and to a lesser extent South Africa, see the BRICS as a non-Western institution amplifying their claims to “nonalignment” or “multi-alignment” in international affairs. China and Russia, on the other hand, increasingly view the BRICS as an institution meant to signal the decline of the West and the rise of an alternative global order based around multipolarity, with greater gravitational pull toward Beijing and, to a lesser extent, Moscow. Despite his war of aggression in Ukraine, Putin has touted the BRICS, complicating matters for other BRICS countries.

The BRICS remains primarily an economic bloc. The goal of the bloc is to counterbalance Western power as represented by the G7, mainly through an agglomeration of emerging economic powers. The main avenues for this have been two new multilateral institutions, the New Development Bank (NDB, known as the “BRICS Bank”) and the Contingent Reserve Arrangement (CRA), which seeks to rival the World Bank and the International Monetary Fund to lessen the dominance of the dollar.

Q2: Why is the BRICS group expanding?

A2: The BRICS has several fissures among its member countries, but a key divergence is over the question of expansion. While Russia and China favor expansion, Brazil, India, and South Africa resist the idea out of fear of diluting their influence with the other two. Russia’s invasion of Ukraine significantly altered the calculus for expansion, as many Western nations sought to distance themselves from Moscow. For Russia, expanding BRICS sends the message that Russia is by no means a “pariah,” with many countries rejecting sanctions on Russia and attempts to isolate it. For China, increasing the attraction of BRICS is a crown jewel in its long-term project of courting countries in the Global South in order to sow a more Beijing-centric global order.

At the latest BRICS summit in Kazan, Russia, Egypt, Ethiopia, Iran, and the UAE became the latest countries to join the BRICS (rebranding to BRICS+), having been invited following the last BRICS summit in Johannesburg, South Africa. The expansion marks the evolution of BRICS into a more cohesive anti-Western agglomeration. Saudi Arabia has officially been accepted into the bloc, but the kingdom has not decided whether to join the group since last year’s invitation, while Argentina outright rejected its invitation. The expanded BRICS bloc now represents roughly 45 percent of the world’s population, and with the inclusion of the UAE and Iran, the bloc accounts for almost 30 percent of global oil output, a number that would dramatically increase should Saudi Arabia join. In terms of purchasing power parity (PPP), the newly expanded bloc now holds 35 percent compared to 23 percent of global PPP 20 years ago. For comparison, the G7 group held 40 percent PPP in 2004, compared to 29 percent this year.

The latest expansion is not set to end with Egypt, Ethiopia, Iran, and the UAE. It is estimated that over 40 countries have expressed interest in joining the forum and that 24 countries are in the formal application process. While no formal invitations were given to countries in Kazan, a new category of “partner countries” emerged to signal future rounds of expansion—a via media between Brazil and India’s staunch opposition and China and Russia’s drive to expand the bloc. With expansion being the ineluctable fate of the BRICS, observers will seek a throughline in these countries’ actions on the international stage. It is yet to be seen whether the amalgamation of countries that compose BRICS+ finds economic and political significance in their membership.

Q3: What benefits accrue to members of the BRICS?

A3: The BRICS+ grouping has yet to build a substantial track record of solving global challenges. While the bloc is relatively young compared to more venerable institutions like the G7 and G20, it has assiduously avoided taking on issues that could throw into stark relief the contradictory foreign policy preferences and outlooks of its diverse membership. Where the BRICS+ have been most successful at finding common ground is in efforts towards building an alternative financial architecture to the U.S. dollar. Countries have a variety of reasons for supporting such moves to end the dollar’s status as the global reserve currency. In some cases, it is merely a question of reducing transaction fees and timelines by cutting out the middleman that is the U.S. financial sector when making foreign currency transactions across borders. For other BRICS+ members and aspirants, it is about circumventing U.S.-led sanctions imposed against them that make it challenging to hold dollars and interact with global financial markets. From this perspective, the new “BRICS Bridge” alternative payments system initiative is highly attractive.

A secondary appeal of the BRICS+ grouping is the gravitational pull of China’s economy. The PRC is the largest trading partner for all the countries included in the grouping’s 2023 expansion, and fellow founding members like Brazil depend heavily on the Chinese market, too. New members of the BRICS+ are therefore joining an attractive and, for the time being, a relatively small network that guarantees face time with one of their largest trade and investment partners, including at the leader level during annual summits. While this element of the BRICS+ appeal is downplayed by the grouping, it is an undeniable driver behind the group’s appeal to new members.

Finally, BRICS+ is a signaling device for countries that feel excluded from the current international order. The group’s overall orientation towards the Global South and fervent appeals to consider a non-Western alternative for global governance hold sizeable appeal in many circles. Indeed, even countries that are not explicitly opposed to the United States find benefit in joining BRICS+ as a means of enhancing their national prestige and nonaligned credentials.

Q4: What do Latin America’s dictators expect to gain from BRICS+ membership?

A4: With the enlargement of BRICS, democracies are now outnumbered 22 to 3 when factoring in the authoritarian and semi-authoritarian countries added as partner countries in Kazan. This makes life complicated for the few democracies in BRICS+. The bloc will become a magnet for other autocracies that are clearly aligned with Moscow and Beijing and have anti-Western grievances. In Latin America, the dictatorships of Venezuela’s Nicolas Maduro, Nicaragua’s Daniel Ortega, and Cuba’s Miguel Díaz-Canel all expressed interest in BRICS+ membership. Semi-authoritarian Bolivia also wants to join the club, while democratic Argentina, under President Javier Milei, declined the invitation to join the group over “ideological differences.”

The three Latin American dictatorships deploy an “anti-imperialist” ideology aimed squarely at the United States. In response to human rights violations and corruption, U.S. sanctions have been placed on all of them. Venezuela and Nicaragua are also subject to European and Canadian sanctions. These two countries also face sectoral sanctions, and Cuba has had to contend with the U.S. embargo for decades. These regimes mutually support each other, diplomatically, militarily, and economically through subsidies of Venezuelan oil, but also through a shadowy network of illicit activities that one long-time researcher of organized crime in Latin America called a joint criminal enterprise. They have all also embraced BRICS founders China, Russia, and new member Iran as investors, trading partners, friends, and allies, regularly receiving high-level diplomatic visits. All three countries depend on schemes to circumvent sanctions and resent the U.S. dollar’s global reserve currency status and the “exorbitant privilege” it provides Washington.

At the time of the South Africa summit, Cuban President Miguel Díaz-Canel described the BRICS group as an important alternative to the established international economic order. Two weeks ahead of the summit in Kazan, Cuba officially asked to be considered a BRICS+ partner country, which was approved. Díaz-Canel was not able to travel to Russia because of an unprecedented four-day electrical black-out that affected all of Cuba and had the potential to lead to significant protests. Cuba sees BRICS+ as an economic lifeline for its moribund economy which some consider to be worse than during the so-called “special period” after the Soviet Union collapsed. Russia has been deepening its relations with its old Cold War ally, especially since its invasion of Ukraine. It signed several economic agreements with Havana in May 2023, approved a customs cooperation agreement to increase bilateral trade in June 2023, and in March 2024, Putin modified Russia’s credit agreements, restructuring Havana’s debt to make payments easier. Russia has also been recruiting Cubans to fight in Ukraine, and there are suspicions that Cuba is either sharing intelligence or allowing the PRC to use the island for signals intelligence gathering against the United States.

Nicaragua also faces economic headwinds as the second poorest country in the Western Hemisphere. Its shift towards the PRC in 2021 has yet to yield large economic gains. While Nicaragua maintains a free trade agreement with the United States, it endeavors to diversify trade and investment, especially as Ortega’s brutal crackdown has brought it into Washington’s crosshairs. Joining BRICS+ may be another attempt by Ortega to ingratiate himself with Xi Jinping, even as Nicaragua has also pledged to be “Russia’s regional platform in all matters.” Ortega himself had said in September 2023 that his motivation in joining BRICS+ was because “BRICS . . . [wants] to cooperate, not to invade or bomb another country but to strengthen economic and social relations in the fight for peace,” eliding Russia’s daily bombing of civilian targets in Ukraine or the large-scale People’s Liberation Army military exercises around Taiwan.

Since his brazen theft of the July presidential election in Venezuela, Maduro has found himself more internationally isolated. Formerly reliable friends like President Lula of Brazil and President Petro of Colombia have refused to recognize his victory, while Claudia Sheinbaum of Mexico has said she would not get involved. Maduro’s gatecrashing of the BRICS+ party was therefore to be expected. In Kazan, Maduro called for a “new international financing system.” Venezuela is heavily indebted to China and repays the debt with shipments of oil. It has also relied on Russia’s fleet of shadow oil tankers to evade Washington’s sanctions. BRICS+ offers the possibility of forging closer ties with countries key to circumventing existing and any reimposed sanctions against Venezuela. Even though Maduro’s bid came up short, Maduro likely got what he wanted—he demonstrated to the world his willingness to leave Venezuela during a moment of domestic turbulence, he pigeonholed Putin and Xi for important photo ops meant to disprove the idea of his diplomatic isolation, and both Putin and Xi endorsed Venezuela’s bid to join the BRICS+, with Putin using his closing remarks at the summit to urge Brazil and Venezuela to work out their differences.

Finally, there is semi-authoritarian Bolivia. The country’s president, Luis Arce, attended the BRICS summit in South Africa, where he made common cause with other leaders seeking to move away from international financial transactions in U.S. dollars. The country has faced dollar shortages with reserves falling to $4 billion from a peak of $15 billion in 2014, in part because of falling natural gas production. The government said last July it was determined to curb dependence on the dollar for foreign trade, instead turning to the Chinese yuan. Arce also attended this year’s summit in Russia, looking for new investments in Bolivia’s mining sector. Last year, Russian and Chinese companies invested more than $2.8 billion in Bolivian lithium mines. In Kazan, Arce talked about Bolivia’s mineral wealth and said his participation in BRICS+ aimed to secure “mutual benefit” for his country and other BRICS+ members. Like Cuba, Bolivia secured BRICS+ “partner country” status in Kazan.

Q5: How has this put Brazil, and other democracies in BRICS, in a bind?

A5: After last year’s expansion of the BRICS at the Johannesburg Summit, the balance of power shifted decisively within the bloc. Autocracies outnumbered democracies, putting Brazil and India, in particular, in a bind. Both countries have long seen BRICS as a balancing act and capable of proving their “multi-alignment” or “nonalignment” bona fides. BRICS gave Brazil and India a platform to discuss the importance of “democratizing” international relations and increasing “multilateralism.”

Neither country desires confrontation with the West and both resent the current direction of BRICS+. Itamaraty, Brazil’s foreign ministry, did not support the expansion of the BRICS—the diplomatic corps did not want to dilute Brazil’s power vis-à-vis China and Russia and make decisionmaking in an already unwieldy organization even more difficult. Brazil and India managed to stave off expansion efforts by China and Russia dating back to at least 2017, but starting last year, the two countries lost control. China and Russia are driving expansion efforts, as seen in the strong concentration of energy-producing countries in the Middle East and the Horn of Africa, selected as the first cohort for expansion.

The inclusion of Iran, as well as Russia’s unprovoked invasion of Ukraine, were particularly problematic in raising the cost of membership in the BRICS+—at least in taking it from somewhat negligible to rather costly for a country like Brazil. As the archrival to the United States, a state sponsor of terror, and perennial disruptor of the Middle East, Iran’s presence vitiated Brazil’s incessant reassurance that—to quote Lula himself—the “BRICS is not against anyone.” BRICS+ now looks less like a vehicle for nonalignment than it does one of confrontation with the West and the increasingly Beijing-centric order China seeks to erect. Following Russia’s cutoff from SWIFT, efforts to skirt Western payment systems by constructing the “BRICS Bridge” of central bank payments in digital currencies have only heightened fears about sanctions evasion, especially with Latin America’s dictatorships knocking at the door. It is safe to say that Brazil feels less able to control intra-BRICS+ dynamics, as China purportedly ignored Brazil’s request to avoid explicitly anti-Western countries such as Iran in expansion efforts. 

The democratic deficit within BRICS+ is only increasing. The list of BRICS+ partner countries tips the autocracy-democracy balance even further in the direction of the former. That a founding country’s leader (Putin) faces an International Criminal Court indictment already creates myriad hurdles for current BRICS+ members. Compounding this challenge, at least two of Latin America’s three dictatorships face investigations for “crimes against humanity.” This could translate to less enthusiastic participation by countries like Brazil as it seeks to “lean out” of the BRICS in recognition of its increasing liabilities—reversing a decade of enthusiastic participation “leaning in” to perceived benefits.

Ryan C. Berg is director of the Americas Program and head of the Future of Venezuela Initiative at the Center for Strategic and International Studies (CSIS). Christopher Hernandez-Roy is the deputy director and senior fellow of the Americas Program at CSIS. Rubi Bledsoe is a research associate with the Americas Program at CSIS. Henry Ziemer is a research associate with the Americas Program at CSIS.





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