Five ways to supercharge B2B lead generation
In this week’s blog, Oban explores five ways to supercharge B2B lead generation, inspired by a recent talk we attended at the Festival of Marketing.
The BRICS are expanding – here’s what you need to know
At the end of August, following a summit in Johannesburg, the BRICS group of countries announced that they would soon be admitting new members. The BRICS are Brazil, Russia, India, China, and South Africa, and aim to be a counterweight to the G7 (Canada, France, Germany, Italy, Japan, the UK, and the US). The announcement was the first expansion of the alliance since South Africa joined in 2010 – so what does it all mean?
Who is joining the BRICs and when?
The six new members are Argentina, Ethiopia, Iran, Saudi Arabia, Egypt, and the UAE. They are due to join officially on 1st January 2024. (Although Saudi Arabia has since injected a note of uncertainty in the process, saying that it is ‘considering’ the invitation.)
Motivations behind expansion
The expansion aims to increase the BRICS’s status as a champion of what has become known as the Global South, much of which feels unfairly treated by international institutions dominated by the US and the West.
The UN’s Secretary General, Antonio Guterres, attended the BRICS expansion announcement, where he echoed the bloc’s calls for the reform of the UN Security Council, the IMF, and World Bank. He said, “Today’s global governance structures reflect yesterday’s world. For multilateral institutions to remain truly universal, they must reform to reflect today’s power and economic realities.”
Common ground between new members
Over 40 nations have expressed interest in joining the BRICS. They are a diverse group united primarily by their desire to level the global playing field. Unlike the European Union, which maintains well-documented accession criteria and procedures, the BRICS’s criteria for membership are not publicly disclosed, apart from the requirement that all existing members must agree to new additions.
The selection of new members has raised questions. For example, Indonesia, a nation of 274 million people and a growing power in Asia, expressed interest but was not invited to join. Nigeria, Africa’s largest economy and most populous country, also expressed interest but was not extended an invitation, though Ethiopia was.
The motivations behind the invitations vary. For example, Brazilian President Luiz Inacio Lula da Silva strongly advocated for Argentina’s inclusion because of geographical proximity and shared interests. Russia and Iran, bound by a common struggle against US-led sanctions and diplomatic isolation, found a shared cause. The inclusion of Saudi Arabia and the UAE underscores their shift away from the US’s orbit and their aspirations to become global powerhouses in their own right. With these new additions, the BRICS now include five of the world’s top ten oil-producing nations.
Challenges of cohesion
One challenge facing the BRICS is their lack of cohesion, which we discussed in our article on whatever happened to the BRICS. The group is made up of economies on a vastly different scale and very different political systems (i.e. a mix of developing democracies, autocracies, and state communism). Their governments have divergent and sometimes conflicting foreign policy goals – for example, both Russia and China share an anti-West agenda, but the rest of the existing BRICS don’t necessarily view the world this way. China and India have an ongoing border dispute in the Himalayan region and tend to view each other as rivals, each with little enthusiasm about the other acquiring more power.
The lack of internal cohesion within the group means that it has tended to punch below its weight in both politics and economics. Shortly after the expansion announcement, White House national security advisor Jack Sullivan said that Washington did not see the BRICS as “evolving into some kind of geo-political rival to the United States or anyone else” because of divergence within the group on critical issues.
The group’s latest expansion has made it more disparate, and the degree to which it can resolve and accommodate internal tensions remains to be seen. Without the ability to act coherently on key issues, the effect of the expansion could be more symbolic than substantive.
The BRICS: A symbolic powerhouse
Despite these challenges, the BRICS’s symbolic power is likely to grow. As the Global South grows in population and economic wealth, its claim that post World War II global governance organisations are too Western will carry more weight. The BRICS are well positioned to act as a voice for the emerging and developing world.
In terms of purchasing power parity, the expanded BRICS will be larger than the G7. (In fact, this is true of the existing BRICS, although they cover 40% of the world’s population compared to the G7’s 10%.) But because the BRIC currencies trade at prices far below the levels implied by purchasing power parity, the group remains much smaller than its advanced economies’ counterpart when measured in current nominal US dollars. The BRICS have tentatively suggested creating a common currency, but this is not considered likely to materialise for a while.
Economic realities and challenges
While China has established itself as the world’s second largest economy (after the US), it faces a series of economic headwinds. These include its demographic outlook, a mounting property crisis, and record youth unemployment. Many economists believe that China is about to enter an era of much slower growth (which in turn, will impact the global economy).
India has been growing fast and is on track to be the world’s third largest economy by the end of the decade. But Russia and Brazil account for the same share of global GDP that they did in 2001, and South Africa – the largest economy in Africa when it joined the BRICS – has now been overtaken by Nigeria.
Russia and China: Key players
Vladimir Putin did not attend the three day BRICS summit in person, as the International Criminal Court has issued a warrant for his arrest for war crimes in Ukraine, making it difficult for him to leave Russia. But most reportage portrayed the BRICS enlargement as a symbolic win for Putin, as he resists a US-led effort to isolate Russia in response to the Ukraine war.
While the BRICS expansion allows Russia to show the West that it’s not isolated, it also enables China to continue to build what it hopes is a Beijing-centric world order. The inclusion of Iran strengthens anti-Western sentiment within the group. However, whatever geopolitical objective China or Russia may have for the group, many developing or emerging economies don’t see the BRICS as an exclusively geopolitical body. They are also motivated by economic opportunities and the chance to secure privileged access to the Chinese and other markets.
Moving towards a multi-polar world
The BRICS expansion marks a significant shift in the global geopolitical landscape. While it amplifies the voice of the Global South, challenges related to cohesion within the group persist. As the world continues to evolve, the BRICS will likely play an increasingly prominent role in shaping international discourse and challenging the existing Western-dominated order. However, its effectiveness in addressing critical global issues will depend on its ability to bridge internal divides and agree on a unified way forward.
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