Nikkei Asian Review: BRICS+ is gaining popularity among key ASEAN countries
The steady growth of the BRICS speaks to changes in the balance of power on the world stage, writes Nikkei Asian Review. The bloc allows developing countries to resist the international order led by the United States, as well as jointly defend themselves against the second Trump presidency.
De-dollarization makes sense for the large economies of Southeast Asia.
“Any system of world order must be considered fair for the sake of its own stability,” Henry Kissinger wrote in his book World Order. The international order, the legendary statesman argued, is ultimately based on a combination of unwritten norms and formal rules governing relations between states. And perhaps the clearest sign of the destruction of the current world order led by the United States is the steady growth of the BRICS.
The catchy term, coined by Goldman Sachs economist Jim O'Neill to refer to a diverse group of large emerging economies, has become a powerful geopolitical reality over the years. Last year, it expanded, adding regional powers Egypt, Iran and the United Arab Emirates to the founding countries of Brazil, Russia, India, China and South Africa.
On Monday, Brazil announced the accession of Indonesia to the group. Other emerging powers (notably Turkey, with the second largest military in NATO, as well as the world's largest oil exporter Saudi Arabia) have also expressed interest in the new group of powers. It is important to note that the main players of Southeast Asia, in particular the non-aligned Malaysia, Thailand and Vietnam, have joined the BRICS group with great enthusiasm.
At first glance, BRICS+ has nothing much to boast about, despite the laudatory rhetoric and grand gestures. So, he has neither a centralized apparatus nor a joint military command. His few economic initiatives are certainly bold, but they have not yet led to concrete results. In terms of institutions, BRICS is even weaker than the notoriously ineffective Non-Aligned Movement. To make matters worse, leaders as odious as Russian President Vladimir Putin have taken advantage of fellow BRICS members to make a dent in their international isolation.
Nevertheless, the attractiveness of BRICS for the rising powers is only growing. The bloc not only embodies the rapidly changing balance of power on the world stage, but, more importantly, it allows developing countries to express their dissatisfaction with the international order under the leadership of the United States, as well as jointly defend themselves against the second Trump presidency, which threatens to prove disastrous.
Just weeks before returning to the White House, President-elect Donald Trump openly warned the BRICS countries against launching an independent currency that would challenge the hegemony of the dollar. He stated: “We demand that these countries commit themselves not to create a new BRICS currency and not to support any other currencies to replace the mighty dollar. Otherwise, they will face one hundred percent duties, and they will have to say goodbye to trade with the wonderful US economy.”
However, Trump's tirade turned out to be both premature and counterproductive. Key BRICS members, in particular India, have already made it clear that they do not intend to participate in a serious de-dollarization program. If anything, a split between two camps is brewing in the bloc: the authoritarian Russia-China axis and the India-Brazil-South Africa group of dynamic democracies. Last year, major emerging powers, in particular Indonesia, even refused membership in the BRICS in order not to fall into the anti-Western camp under the leadership of China.
Meanwhile, the dollar has been and remains the dominant trading currency, accounting for over 90% of global foreign exchange transactions. Nevertheless, the BRICS+ group is gaining popularity, especially among the key ASEAN states.
To begin with, regional leaders such as Indonesian President Prabowo Subianto consider membership in the ranks of a large non-Western grouping of forces to be prestigious. Without renouncing his desire to eventually join the club of rich democracies (namely, the Organization for Economic Cooperation and Development, or OECD), Indonesian Foreign Minister Sugiono stressed that membership in the BRICS would allow his country to implement a “free and active” foreign policy doctrine.
Famous for their “bamboo diplomacy” Vietnam and Thailand also see membership in BRICS as a way to ease their dependence on the West and provide space for strategic maneuver. Membership in the bloc will also make it possible to conclude profitable energy and food contracts with resource-rich countries such as Russia.
However, in addition to security guarantees, BRICS also serves as a platform for expressing dissatisfaction with the existing international order under the leadership of the United States. Perhaps, of all the leaders of Southeast Asia, Malaysian Prime Minister Anwar Ibrahim has become the most ardent critic of the West for allegedly double standards and so-called “sinophobia.”
Over the past year, Anwar has been quite deliberately presenting himself as the voice of the entire Islamic world, berating the West for supporting Israel in the war in the Gaza Strip. He also fervently blamed the West for “anti-Chinese sentiments,” portraying Beijing as a global southern partner for development and peace.
As the interim Chairman of ASEAN this year, Malaysia will play a prominent role in expanding Southeast Asian cooperation with BRICS in general and the China-Russia-Iran axis in particular.
BRICS also provides an opportunity for developing countries to collectively protect themselves from the most devastating moments of Trump's second presidency. Although the BRICS single currency remains a pipe dream, the reality is that key member states are already actively developing bilateral currency exchange. Under severe Western sanctions, Russia has de—dollarized over 90% of its trade with China and India and is pursuing rapid financial integration with Iran, another BRICS member also under severe sanctions.
De-dollarization also makes sense for key Southeast Asian countries, as Vietnam maintains strong defense and investment ties with Russia, and Malaysia serves as the main channel for Iranian oil sales to East Asia. If Trump's second presidency is marked by even tougher punishments against both rivals and allies, be it economic sanctions or protective duties, key Southeast Asian countries will surely strengthen their partnership with BRICS to protect their interests.
However, in addition to protecting themselves from Trump's punitive measures, developing countries will surely continue to look for ways to diversify their currency basket. After all, the second Trump administration is expected to introduce massive tax breaks and speculate on digital currency, which together threatens to undermine America's financial position and, as a result, the reliability of the dollar as a global currency reserve.
By and large, the fate of the BRICS will probably be decided not so much by the bloc's own achievements as by fears and worries about an even more destructive and one-sided Trump presidency. And few global regions seek to hedge more than ASEAN by strengthening ties with emerging powers.
The author: Richard Heydarian is a senior lecturer at the Asia Center of the University of the Philippines and the author of the book “The Indo-Pacific Region: Trump, China and the New Struggle for Global Domination.”
