Arab-less BRICS in Brazil?
July 13, 2014, 7:43 am

Arab nations should have taken a leaf from the book of South American states by seeking representation in the five-nation summit of BRICS nations on July 15 and 16 in Fortaleza, the North-Eastern coastal city of Brazil.

The 2014 BRICS summit has huge implications for South-South economic partnership coupled with the potential to restructure the faltering and uneven global economy, agendas of paramount importance to many Arab economies, including the oil-rich states of the Gulf.

BRICS significance for the Arab region

Observing the Arab states’ inertia in the Middle East as Iraq implodes and Israel continues to bomb besieged Gaza, is like witnessing a region that seems to be either passive or unable to muster the will to embrace multilateralism and resolve its mounting internal and external problems in order to improve its standing as a credible actor in global politics.

The region, namely its oil-rich states such as Qatar, Saudi Arabia and UAE jointly, at least, has the potential and the building blocks for engaging the global political and economic ‘supremoes’ in the developed North. The Gulf has embraced globalism in an unprecedented and successful way: UAE will host the 2020 Expo, Qatar the FIFA 2022 World Cup, and the two along with Saudi Arabia continue to record some of the highest individual (as well as collective) fiscal surplus in the region and the world.

Chinese President Xi Jinping, right, shakes hands with Saudi Prince Salman bin Abdul-Aziz as they pose for photos at the Great Hall of the People in Beijing, China, Thursday, March 13, 2014 [AP]

The significance of the 6^th BRICS Summit is the potential it could offer for Arab rentier economies, ranked amongst the richest in the world, to break free of the rent-petrodollar recycling ‘vicious circle’, which ties oil-rich states to a West-specific model of development. Huge financial outlays from gas and oil proceedings are redirected into financing imports and largely risk-free investments in Western economies.  Whilst, to an extent, this makes good economic sense, there is little political kudos or clout deriving from the resulting economic dependency of the oil-rich states. The UAE has been unable to make a good case with its Western allies for Iran to abandon their 1971 seizure of the Abu Musa and the Greater and Lesser Tunb islands in the Persian Gulf. Saudi Arabia’s tireless efforts for the US to intervene militarily in Syria have thus far fallen on deaf ears.

A BRICS-Arab win-win alliance possible?

The BRICS group (Brazil, Russia, India, China, and South Africa), created in 2009 during the first summit hosted then by Russia, boast emerging and high-performing combined economies deemed by some Western economists (e.g. from Goldman Sachs) to have what it takes to overtake the presently dominant US and G-7 countries by the 2040s.

This scenario is not implausible. The five nations’ jointly represent close to 45 per cent of the world’s population and nearly 20 per cent of the global volume of trade. The combined land mass occupied by the five nations is not only vast, but also represents all major continents. This explains the huge bill of airport, rail, road and other construction projects forecast to approximate $4 trillion over a five-year period and to include BRICS countries (and potentially Latin America and Africa).

With their fiscal surplus reserves oil-rich states could book themselves not only a role within the BRICS group, but also as partners in the reconstruction of a new socio-political paradigm that shifts and distributes political and economic power from the traditional gatekeepers of the Western global economy (with its still dominant Bretton Woods instruments made up of the IMF and the World Bank) for the greater sake of even and sustainable development. To this end, the oil-rich states are not called upon to renounce partnership with the established economic and financial system dating from the post-war period, but to diversify membership and partnership in ways that widen their margin of existence in the global arena.

Arab stakeholders in the BRICS Bank?

Specifically, the planned BRICS development bank (as discussed in the 2013 BRICS Durban Summit) will be the most important financial arm to which oil-rich states could seeks means of contributing to and investing into.  Oil-rich states have not only the funds but also the financial know-how required to partner with the planned development bank as a facility envisaged by the developing world’s most dynamic economies to effect a paradigm shift in the global economy with an eye on more even development and access to poor African and Latin and Southern and Southern American countries. It is a normative agenda hinting at just and durable development that beckons participation from all Arab states, especially the oil-rich whose petrodollar largesse is enabling in this respect.

For the Arab World, there is an additional agenda with which BRICS presents all developing countries: reforming the United Nations as well the Bretton Woods system’s conditionality that renders development insensitive to issues of social justice, more often than not stressing market logic and ideological agendas — along the lines of ‘there is no free lunch.’

Arab contribution of funds to the development bank and membership of BRICS in the future would help bolster an emerging financial facility (not unlike the European Development Bank) to be effective in lending a helping hand to long-term infrastructure projects including in Arab, African, Middle Eastern, Muslim and Southern American cash-strapped countries. This would be a pivotal decision not only in terms of procurement of parts of the financial capital needed for helping the birth of dual economic system in our world, but also in terms of lending moral capital to a worthy cause the beneficiaries of which would be billions of have-nots, marginalised by the existing predatory and highly selective and prescriptive economic system.

This would be the case especially if a new economic paradigm shifts from stressing the priorities of the donors to doing development in a fashion that is sensitive to the demands of the recipient nations and peoples. Also, by helping bring to the fore a new developmental model, oil-rich states along with the BRICS group and other actors could lessen the influence of private capital in the exploitation of developing countries bio-systems and peoples by greedy multinationals.

“The six Gulf Cooperation Council (GCC) countries, which have more than 44 per cent of the world’s proven crude deposits, have over the past two years budgeted fiscal surpluses of more than $70 billion due to higher output and strong hydrocarbon rent” [AP]

The BRICS group offers fresh attempts at international solidarity away from ideological posturing. It has the potential of adding value to the enlivening of multilateralism with an eye on levelling the playing field and even distribution in the economic arena. The political bonus would be global pluralism with the potential of new visions and new hopes. In theory, BRICS and Arab contribution to it sound promising. In practice, the litmus test will come if re-doing development by BRICS plays the trump card of sustainable and even development.