The BRICS journey continues

by Mario Lettieri and Paolo Raimondi * –

The recent summit of the BRICS foreign ministers (there are now 10 member countries) maintained its strategic line despite the threats and provocations made in the first hundred days of Donald Trump's government. In fact, the issues addressed in Rio de Janeiro were multilateral cooperation for peace and development, the reform of international institutions for more inclusive governance and the role of the South of the world in strengthening multilateralism. Representatives of the partner states (Belarus, Bolivia, Cuba, Kazakhstan, Malaysia, Nigeria, Thailand, Uganda and Uzbekistan) also participated in the meeting. The final document was drawn up, but not presented jointly due to a different assessment by the African members with respect to the reform of the UN Security Council. The text calls for India and Brazil to be admitted, leaving Africa out for the moment. The document explicitly states that it is unacceptable to hinder the reform of the World Trade Organization (WTO) and calls for the maintenance of the dispute resolution body. Instead, in one of his many statements, Trump called for its elimination. In any case, the resolution fully supports the directives previously discussed by the finance ministers and central bank governors of the BRICS for the creation of independent payment systems, including the creation of a cross-border payment system and an electronic deposit and clearing system (BRICS Clear). It supports the more active use of national currencies in trade. It should be remembered that national currencies represent over 65% of trade between BRICS countries, while the dollar's share has fallen to a third. In the midst of growing international tension over tariffs and Trump's aggressive trade policies, the text expresses "serious concern" over the increase in "unjustified unilateral protectionist measures", which violate WTO rules. In particular, it emphasizes the fundamental role of the United Nations and multilateralism in the system of international relations. Brazilian Foreign Minister Mauro Vieira, who coordinated the meeting, recalled that in 2023, 183 armed conflicts were calculated in the world. He noted that “representing almost half of humanity and a wide geographical and cultural diversity, the BRICS are in a unique position to promote peace and stability”. However, the BRICS must avoid being involved in regional wars, as unfortunately happens between India and Pakistan. It is clear that such conflicts undermine their role of dialogue. Vieira wanted to highlight the firm rejection by all participants of the resurgence of trade protectionism and the use of non-tariff measures under environmental pretexts. He explained that the final document of the meeting was signed only by the Brazilian presidency of the BRICS “to leave room for careful and precise negotiations on the joint declaration that will be drafted and published in July, during the summit of heads of state”. In the same days as the Rio summit, Xi Jinping met in Shanghai with the former Brazilian president, Dilma Rousseff, who was recently re-elected as head of the BRICS New Development Bank (NDB). The Chinese president called the bank “a pioneering initiative for the unity and self-improvement of the global South. It is the first multilateral development institution initiated and led by emerging markets and developing countries, and over the past decade it has grown into an emerging force in the international financial system and a symbol of South-South cooperation.” The NDB President said the bank has already approved more than 120 investment projects, totaling 40 billion dollars, focused on logistics and digital infrastructure, as well as social infrastructure, such as water supply and sanitation, investment in education, healthcare and housing. Thirty-one percent of the projects are carried out in member countries’ currencies. The NDB is also the largest issuer of Panda Bonds, bonds denominated in Chinese currency issued by non-Chinese institutions, which have already reached a total of 68.5 billion yuan, nearly 10 billion dollars.

The Rio summit highlighted two important aspects: Trump's threats against the BRICS did not have any intimidating effect, they did not slow down the work of the group, and at the same time the BRICS demonstrated great responsibility by avoiding a head-on clash on tariffs with the American Administration. The BRICS journey continues!

* Mario Lettieri, former member of parliament and undersecretary of the Economy; Paolo Raimondi, economist and university professor.