THE BRICS REVOLT
The West vs. The Rest
A bitterly cold winter has arrived in relations between an entitled, USA-led West, and the global South, 'the Rest'. Fed up, and with fast-growing economic strength, the Rest is about to seize a fairer share of power.
by William Paton, Beijing 30 July 2023
Writing in 1987, Paul Kennedy proclaimed that in economic terms, a uni-polar world had already arrived.[i] Ironically, Kennedy’s book – The Rise and Fall of Great Powers – was instead followed by the dissolution of the USSR and the dawn of a newly ‘uni-polar world’.
President Biden is congratulating himself today, for having used Russia’s renewed invasion of Ukraine to draw the rich world closer together in a formidable military block. The North, however, seems not to have noticed that the global South skipped the party. While many developing countries tepidly supported a UN General Assembly resolution condemning Russia’s invasion, they pointedly declined to take NATO’s side in applying sanctions.
The conflict with Russia is not the world's most important rift today. Nor is it US vilification of China, also aimed at uniting the West — in this case against the renewed ‘yellow peril’. No — the most dangerous division the world faces today is the growing alienation of the global South from the global North.
Economic multi-polarity
In 2025, China’s real GDP PPP will be over 37 trillion dollars or more than 19% of the global economy. The USA will have 15%; India, third, will have slightly more than half the USA’s share, or 8%.[ii] A multi-polar global economy has, apparently, dawned.
While the USA is busy ‘de‑coupling’, ‘friend-shoring’, ‘de-risking’, applying myriad sanctions and banning things galore, the rest of the world is not keen to follow. For instance, after the US withdrew from the Trans-Pacific Partnership (TPP), many of its closest allies – Japan, Australia, Canada, Mexico and New Zealand – proceeded without it.
Developing countries, in particular, know they need growing trade to continue improving living standards. Free-trade agreements are proliferating in Asia Pacific in particular. China is in the Regional Comprehensive Economic Partnership (RCEP) of 15 Asian nations, the renewed ASEAN Free Trade Area ACFTA, another Asia-Pacific FTA, and bilateral FTAs with 14 more countries. It is negotiating or consulting on new FTAs with eight more regional groupings and a further 15 countries worldwide, altogether the majority of the world.[iii]
By 2040, the ‘Emerging Seven’ or E7 will account for double the GDP PPP of the G7 (the E7 is China, India, Indonesia, Brazil, Mexico, Turkey and Nigeria). While the global economy should more than double in size by 2050, the EU27’s share will by then shrink to less than 10%, substantially smaller than India’s.[iv]
Capital accumulation follows this trend more slowly. The world’s staggering private wealth of over 500 trillion dollars in 2023 is ever-more unequally distributed and mostly still concentrated in the North. Private wealth grew at a record 12.7% in 2021, yet the majority of adults worldwide had wealth of less than $10,000.[v] However, emerging countries are catching up faster in public investment. By 2019, China’s public capital was $20-35,000 per capita, the same range as most of Western Europe, Canada, Australia or New Zealand. Only the USA, Japan and a few others are higher and in many developed countries, especially the USA, public capital is falling — as depreciation outpaces new investment — while private wealth continues to soar.[vi]
Military uni-polarity
Kennedy’s thesis about Great Power competition was that military and economic power must go hand in hand.[vii] If military power too greatly exceeds a nation’s economic capacity, then the burden drags it down. By the 1700s, The Netherlands and Spain became secondary economic powers, thus lost their military edge to Britain, who by the end of that century had developed the world's leading financial system, underpinning its military rise and beating even France.[viii]
However, if a nation acquires great wealth without adequate defences, then it is conquered or weakened by a stronger power seeking its riches. Ming Dynasty China was the greatest empire in the world in the 1400s, its huge fleets of oaken giant ships dwarfing Europe's. But China then abandoned its navy, thinking the greatest risk was overland. This left the global seas open to European conquest and, eventually, the invasion of China itself it by the 1800s, when the emerging West seized Hong Kong, Macau and parts of other coastal Chinese cities, including Shanghai.
Today, the USA's 4.4% of world population continues to dominate the world militarily. Official US defence expenditure in 2022 was $944 billion — higher than publicised but not the total. Excluded are such items as budgets for bigger wars (including trillions of dollars spent in Iraq and Afghanistan), and much of the cost of its nuclear arsenal, weapons’ research, intelligence-gathering, domestic defence and veterans affairs.[ix] Total USA military expenditure exceeds 1.2 trillion dollars per year or 5% of its GDP and in years with bigger‑than‑usual wars, 6%.[x] [xi] Add another $300 billion in expenditure by its NATO allies, for a total of 60% of total global spending on defence and offence by this dominant block.[xii]
China’s military expenditure today is second largest.[xiii] It was $487 bn in 2022 in GDP PPP, a fairly steady 1.6-1.7%. This is successfully depicted by the USA as a ‘growing threat’ to world security, yet no soldier in China’s military today has been in combat, other than a border skirmish or UN Peacekeeping.[xiv] The threat, of course, is to US hegemony.
China aspires to be able to defend itself in its own region. However, the USA, determined to remain supreme, will continue spending 5-6% of its GDP on its military. At present, the USA is surrounding China with yet more military bases (it has already has 800 foreign military bases in 83 countries), along with aircraft carriers and submarines that each carry more than a hundred nuclear weapons, all patrolling the Chinese coast, air space borders and nearby seas.
Hogging power
The global South feels sees a multi-polar world arriving, but also sees a global North determined to go on dominating, just as before, not only with military might but also through the control of global institutions and systems, particularly for finance.
Take the World Bank: Located in Washington, the US always nominates a single candidate to become the Bank's head and is the only country with veto power.[xv] China has about 5% of voting rights at the Bank's main arm, the United States 16%, and the other six G7 nations, Canada, France, Germany, Italy, Japan and the UK, have a further 25%.
At the International Monetary Fund, China has 6% of votes, less than Japan and the USA has 17%. The G7 combined have 43%. As at the Bank, a ‘super-majority’ of 85% is required for major decisions, giving the USA the sole veto.[xvi]
In the World Trade Organization, USA influence is also greatest by far, for instance blocking the appointment of new appeal judges for years, thus halting the resolution of cases against its rollout of myriad, illegal trade barriers under the guise of 'national security'. Developing countries in the WTO have reduced voting rights, yet less and less differential treatment in exchange.[xvii] [xviii]
At the Bank for International Settlements, based in Basel, Switzerland, the governing board reserves permanent seats for the US, UK, Germany, France, Italy and Belgium. Western countries hold a large majority of votes, despite nearly 70% of currency deposits coming from the Asia-Pacific region.[xix] [xx]
International payment systems are also under the control of the US, which can block any country it wishes from using them, and seize other countries' dollar assets abroad, at will. The dollar is also used to extend American law abroad, requesting extradition of non-US citizens they accuse of breaking US laws. The accused need never visit the USA, only use a bank that handles dollars. Meng Wanzhou, CFO of Huawei, was arrested and held in Vancouver for three years at US insistence, based on two Power-Point slides she had allegedly showed an executive of HSBC (a British Bank), at a café in Hong Kong!
Frustrated at such brash overreach, China has established the Asian Infrastructure Investment Bank (AIIB), based in Beijing. China has also out-spent the World Bank over the last decade, investing more than $1 trillion dollars during 2013-2023 on infrastructure and other works in other developing countries, through its Belt and Road Initiative (BRI), of course provoking nothing but scathing accusations in a jealous West.[xxi]
Reform is not likely soon at the United Nations, either, the world's preeminent multilateral organization. The West’s three vetoes out of five in the Security Council — with not so much as a seat for India or Brazil — continue to be non-negotiable.
Hypocritical, warlike and selfish
Hypocrisy is a major grievance of the global South. The USA, in particular, combines abrasive preaching with astonishingly hypocrisy. It preaches nuclear non-proliferation, then signs a deal to sell nuclear submarines to Australia, and deliver it copious plutonium. Then it signs another deal to begin stationing a nuclear-armed submarine in South Korea, just hundreds of kilometres from Shanghai.
Preaching respect for individual human rights, it detains people for decades without trial (in their military base in Cuba which the USA continues to 'rent' there for a coercive $3,386 per year). It refuses to join the International Court of Justice or ratify the Ottawa Ban on Land Mines. Preaching multi-party democracy, it steadily supports authoritarians it likes, and covertly tries to overthrow any government it does not.[xxii]
Preaching international rule of law, it places itself above it, refusing to ratify many international laws including the Law of the Sea (all the while, loudly accusing China of breaching it), the Convention on the Rights of the Child, and the Vienna Convention on Treaties, to name just a few out of many. It invades other countries such as Iraq without UN Security Council approval and secretly uses drones or cruise missiles (such as in Yemen or Somalia), ironically calling this a 'rules-based order'.
War mongering is a particularly damming charge. The US post-9/11 wars in Iraq, Afghanistan, Yemen, Syria, and Pakistan caused an estimated 387,073 violent deaths of civilians in those countries. An estimated 3.6-3.7 million people died indirectly in post-9/11 war zones. There have also been thousands more deaths from many hundreds of US airstrikes elsewhere, now mostly unmanned drones, in Burkina Faso, Chad, Kenya, Libya, Mali, Niger and Somalia (202 such strikes in Somalia alone). President Biden continues to routinely authorize drone strikes in countries 'outside of regular war zones' meaning, in effect, anywhere he likes.[xxiii]
Selfishness is also high on the list. During the Covid-19 pandemic, there was an appalling lack of assistance to developing countries. The Western block mostly took care of themselves, not even making adequate contributions to the UN's fund for vaccines for developing countries. Washington was able to quickly find five trillion dollars to help itself though, more than 1,000 times more than it found to aid the rest of the world. Germany found $1.2 billion for international vaccines and $810 billion to help itself. Japan's domestic Covid stimulus exceeded 50% of its GDP. Combined, Western gorging sparked the worst inflation in 40 years, driving up prices worldwide, especially for food.
Power is taken not given
Developing countries as a group are thoroughly, irreversibly, alienated and actively seeking ways to balance the scales. This August's meeting of BRICS in South Africa is a milestone -- a potential "BRICS Revolt". BRICS' original five members already represent 40% of global population. Twenty-two more countries have formally applied to join BRICS, and another twenty-two have expressed interest. The list includes Afghanistan, Algeria, Argentina, Bahrain, Bangladesh, Belarus, Egypt, Indonesia, Iran, Kazakhstan, Mexico, Nicaragua, Nigeria, Pakistan, Saudi Arabia, Senegal, Sudan, Syria, Thailand, Tunisia, Turkey, United Arab Emirates, Uruguay, Venezuela, and Zimbabwe.[xxiv]
BRICS set up the New Development Bank in Shanghai, with a rotating presidency. At the top of their agenda is de-dollarization of trade and the creation of a digital trading currency. The expansion of BRICS into an international organization of developing countries, with ambitions to favour local currencies over the dollar, has the potential to bring a seismic shift in the global distribution of national power. Twenty-four countries have expressed interest in using a new BRICS currency for trade instead of the dollar.[xxiii]
It was also remarkable that National Security Advisors from BRICS countries met in Johannesburg in late July to discuss setting up their own security cooperation mechanism.[xxv]
Conclusion -- The World Order in Transition
The USA and global North's captain-ship of the world has finally shipwrecked. The global South, having endured slavery, colonialism, imperialism, wars, inadequate and self-serving aid, corporate domination and even open scorn (Trump famously called them 'shithole countries'), senses today that their time has finally come, and they are eager to seize it.
Many see cause for celebration in this but there are also fearsome risks in such a split. The more the USA tries to surround and intimidate China, and no doubt soon India too, the harder they will try to develop military power sufficient to repel the threat. The more the Western media hypes the impression that other countries are lining up to take the USA's side, and vilifies every non-ally, the less the silent majority will believe it. The more the dollar is weaponized, the more it will be attacked.
Understandable alienation in the global South may once again split the globe, not between the West and the East — this time between the West and all the Rest. The result will be a stormy, unstable era. Instability, provoked by northern selfishness, risks reducing cooperation on planetary destruction at a critical time, and heightens the risk of large-scale war.
__________________ [i] Paul Kennedy (1989), The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000, Introduction (New York: Vintage Books). [ii] IMF (2023), World Economic Outlook database: April 2023.
[iii] Asia Regional Integration Center: Tracking Asian Integration, Free Trade Agreements;
ADB: https://aric.adb.org/fta. [iv] Price Waterhouse Coopers (2017), The World in 2050: The Long View – How will the global economic order change by 2050? or OECD (2021). [v] Credit Suisse Research Institute, Global Wealth Report 2022: Leading perspectives to navigate the future, Zurich. Visual Capitalist (28 February 2023), Visualizing the Global Share of US Stock Markets, nominal exchange rates. [vi] IMF (2021), Investment and Capital Stock Dataset: Estimating the stock of public capital in 170 countries (May 2021 update). [vii] Paul Kennedy (1989), Ibid. Introduction. [viii] Paul Kennedy (1989), Ibid. Ch. 2,3,4. [ix] US Defense Department, News Release, accessed 3 May 2023. https://www.defense.gov/News/Releases/Release/Article/2638711/the-department-of-defense-releases-the-presidents-fiscal-year-2022-defense-budg/.
[x] The Costs of War Project, Brown University, https://watson.brown.edu/costsofwar/costs/economic/budget; Budget Basics: National Defense, Peter G. Peterson Foundation.
[xi] These figures are exceedingly complex and this figure of 1200 billion is an estimate. For instance, funds to replace munitions sent to Ukraine in 2022 were handled by $35.7 billion in “supplemental funds” not included in the publicized “defense budget”. [xii] NATO (2023), Secretary General’s Annual Report 2022, Annex: Defense Expenditure. [xiii] For an exhaustive look at expenditure items not included in China’s official defense budget, similar to the practice in the USA, see: Nan Tian and Fei Su (2021), A New Estimate of China’s Military Expenditure, Stockholm: Stockholm International Peace Research Institute.
[xiv] China’s last actual combat beyond a minor skirmish was in 1979 in northern Vietnam, both across the border and at sea, and involved a total of at least large, if short, skirmishes until 1987. Some soldiers and sailors have also been involved in UN peacekeeping operations and naval operations to combat Somali pirates. [xv] World Bank website. [xvi] IMF. https://www.imf.org/en/About/executive-board/eds-voting-power. [xvii] Aileen Kwa (1998) ‘WTO and Developing Countries’ (1998), Institute for Policy Studies, Washington. https://ips-dc.org/wto_and_developing_countries/ [xviii] Clara Weinhardt & Till Schöffer (2022), 'Differential treatment for developing countries in the WTO: the unmaking of the North–South distinction in a multipolar world,' Third World Quarterly, 43:1,74-93. https://www.tandfonline.com/doi/full/10.1080/01436597.2021.1992271. [xix] See https://www.bis.org/about. [xx] Catherine R. Schenk (10 April 2020), The Governance of the Bank for International Settlements, 1973–2020, Cambridge University Press online. [xxi] Christoph NEDOPIL WANG (January 2023), ‘China Belt and Road Initiative (BRI) Investment Report 2022’, Shanghai: FISF Fudan University, Green Finance & Development Center.
[xxii] Kinzer, Stephen (2006), Overthrow: America's Century of Regime Change from Hawaii to Iraq, New York, Times Books. Wikipedia, U.S. policy toward authoritarian governments.
[xxiii] Watson Institute for International and Public Affairs, Costs of War, Brown University,
https://watson.brown.edu/costsofwar/costs/human/civilians. [xxiv] Watcher Guru (accessed 26 July 2023), Brics - Full List of Countries That Want to Join Alliance, https://watcher.guru/news/brics-full-list-of-countries-that-want-to-join-alliance, [xxv] Zongyuan Zoe Liu and Mihaela Papa (24 February 2022), Can BRICS De-dollarize the Global Financial System? Cambridge U. Press, online. Watcher Guru (accessed 26 July 2023), Twenty-Four Countries Ready to Accept BRICS Currency, https://watcher.guru/news/24-countries-ready-to-accept-brics-currency.
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