Pretoria navigating tightrope of bolshie BRICS and uneasy G7

The gap is widening as BRICS backs Russia despite – or perhaps because of - Ukraine. By

As BRICS throws more of its weight behind its warring member Russia, South Africa is walking an increasingly fine line between its membership of this bloc of five emerging and developing nations and its good standing with the G7 and the West more generally.

Pretoria’s delicate balance in straddling the widening East-West divide was on display over the past week as President Cyril Ramaphosa first attended the virtual BRICS summit hosted by Chinese President Xi Jinping and then participated in person in the G7 summit hosted by Chancellor Olaf Scholz at Schloss Elmau in Bavaria.

At the BRICS summit, also attended by Indian Prime Minister Narendra Modi and Brazilian President Jair Bolsonaro, Russian President Vladimir Putin pushed hard for a raft of joint measures that would in effect help Russia to circumvent the sanctions that Western countries have imposed on Russia because of its invasion of Ukraine.

Putin’s measures would collectively reduce the role of the US dollar in financial transactions between BRICS member states.

These measures included an alternative mechanism of payment that would entail all other BRICS countries joining the Russian central bank’s MIR electronic fund transfer system, which it introduced in 2017.

Putin also invited the other BRICS countries to join Russia’s financial messaging sys- tem, its alternative to the international SWIFT system that Western countries cut Russia out of this year.

The BRICS leaders agreed to deepen the use of their own currencies rather than the US dollar in transactions among themselves. Putin also pushed for the creation of an international reserve currency based on the basket of BRICS currencies.

Officials said that the leaders discussed the creation of a BRICS credit-rating agency.

Another major decision of the summit was to start the process of expanding the membership of the bloc.

There had been a general condemnation by the five leaders of the “unilateral” sanctions imposed on Russia by the West and a decision to deepen cooperation among BRICS states in response.

The strong new impetus for expansion and deeper cooperation had mostly come from

Russia and China, which had previously been reluctant to strengthen and broaden BRICS, was told.

These ideas are not necessarily all new. SA had proposed some of them when it chaired BRICS in 2018 in Johannesburg. Then president Jacob Zuma had pushed for a BRICS credit-rating agency, for example, because the usual West-based agencies were hammering South Africa. But Russia wasn’t very keen and the plan was dropped.

In 2018, Pretoria proposed expanding the membership of BRICS, but other members – notably Russia and China – were not enthusiastic. Now Russia’s isolation from the West is driving it towards a closer embrace of a stronger BRICS.

Argentina, Mexico, Egypt and Indonesia are pushing hard to join. Moscow and Tehran announced after the summit that Iran had applied to join – even before BRICS has formally decided to expand.

“While the White House was thinking about what else to turn off in the world, ban or spoil, Argentina and Iran applied to join the BRICS,” Russian Foreign Ministry spokesperson Maria Zakharova was quoted by Reuters as saying.

The BRICS New Development Bank showed the way by accepting Bangladesh, UAE, Egypt and Uruguay as members last year. The bank has been a pathfinder for BRICS by increasingly lending in local BRICS currencies rather than US dollars.

Pretoria is aware that Western governments are looking at this growing BRICS cooperation with some unease because they see it as indirectly supporting Putin’s war.

South Africa expects kickback from the West, “which we will deal with as it comes”. But officials note that the reality the West must accept is that there is strong commitment by all five BRICS members to deepen their solidarity, including through financial and economic cooperation.

There is a greater determination, especially from Russia, China and, to some extent, India, to expand BRICS “to bring in a few more weighty countries of the South into the equation to give BRICS even more gravity”.

This is because the Ukraine war and the West’s reaction to it has accelerated “a new dynamic” in the global order.

Pretoria recognises that the “delicate balance” it maintains between its membership of BRICS and its good relations with the G7 is going to become ever more difficult to maintain, but is confident that its participation in a stronger BRICS will not damage its relations with the West.

“The G7 and the West is important to us; it’s a major partner of ours. Though, at the same time, BRICS is also important for us,” an official says. The result is that South Africa walks a middle path and will continue to do so.