Lula goes to Africa to discuss expansion and end of dollar use by the Brics

President Luiz Inácio Lula da Silva (PT) is on his way to the Summit of the Brics (commercial and diplomatic group formed by Brazil, Russia, India, China and South Africa), which takes place in the city of Johannesburg, in South Africa, between the 22nd and 24th of this month. The agenda includes discussions on criteria for admitting more member countries to the bloc, diplomatic positioning in relation to the war in Ukraine, strengthening the Bank of the Brics and greater economic cooperation.

The key issue under discussion should be the possibility of future expansion of the bloc. But there are no perspectives that new countries will be accepted in this 15th Summit of the Brics.

China and Russia have pressured the group for more countries to join. That’s because, since 2022, Beijing has been trying to transform the bloc’s character from purely economic to political. The Chinese are trying to strengthen the Brics based on an anti-American agenda to transform the bloc into a political body capable of standing up to the G7, the group of the largest democratic economies on the planet, which is led by the United States.

The bloc’s politicization is also convenient for Russia, which was isolated in the economic and diplomatic areas by Western nations because of the invasion of Ukraine. This context of rivalry between Washington and its G7 allies against Beijing and Moscow has been called “Cold War 2.0” by analysts.

In other words, the Chinese are working to make the Brics bigger and bigger, so that it can be used against the United States. The Russians also see the possibility of reducing their commercial and diplomatic isolation.

Is the expansion of the Brics good or bad for Brazil?

The expansion of the Brics has both negative and positive aspects for Brazil. The negative is due to the fact that both Brazil and South Africa are the weakest economies of the Brics. The inclusion of more countries in the group could leave Brazil in an even more uncomfortable position, according to José Augusto de Castro, president of the Brazilian Foreign Trade Association. With more countries in the bloc, Brazil may lose political importance and decision-making power in the group.

Another negative aspect is the possible entry of more dictatorships besides China and Russia, in a context of an attempt to politicize the bloc. In addition to the government system, candidates like Iran, Saudi Arabia and the United Arab Emirates have cultures and religions that are completely different from those practiced in Brazil.

Other countries claiming to join the Brics are Indonesia, Argentina, Egypt, Ethiopia and the neighboring dictatorship allied with Lula, Venezuela.

On the other hand, the disparity between the Chinese and Brazilian economies tends to place Brazil in a position of submission to the Chinese in the bloc. Thus, the entry of more member countries would be positive, as it would tend to dilute this effect, according to risk analyst Nelson Ricardo Fernandes Silva, from ARP Risk.

President Lula took a position on the subject of the expansion of the Brics at the beginning of August: “I think it is extremely important that we allow other countries that meet the requirements to join the Brics. From the world point of view, I think that the Brics can to have a role, I would say, exceptional.”

Russian leader will not attend as he is wanted for war crimes

The leader of Russia, Vladimir Putin, could not attend the meeting in person along with Lula and presidents Cyril Ramaphosa (South Africa), Narendra Modi (India) and Xi Jinping (China).

The International Criminal Court issued an arrest warrant against the Russian and, if he steps on South African soil, he could be arrested. He is accused of the war crime of ordering the abduction and forcible extradition of Ukrainian children from invaded regions for adoption by Russian families. Thousands of minors are being torn away from their Ukrainian families and disappearing in Russia today. Putin says he is protecting children by ripping them away from their families and country.

The Russian leader even considered traveling to South Africa. If he did, he would hardly be arrested. That’s because South Africans fear a military backlash from the Kremlin. But the presence of the Russian autocrat would put Cyril Ramaphosa in a diplomatic tightrope with the international community.

Therefore, Putin will participate in the meetings via videoconference and will also be represented in person by his chancellor Sergey Lavrov. The intention is, even if from a distance, to develop the discussion about the expansion of the bloc.

President Lula even made contradictory statements about the invasion of Ukraine and said, among other misconceptions, that Kyiv was “as guilty of the war” as Moscow. The Brazilian positions in relation to the war have been generating revolt in the Western world and its consequent political isolation – even in agendas of other areas, such as the environment.

The Brazilian government has pointed out as a reason for not condemning Moscow for the invasion of Ukraine the fact that Brazil is a major exporter of agricultural products and depends on imports of Russian fertilizers. In addition, Lula has taken advantage of the international scenario to import cheap diesel oil from Russia.

At the same time, Brazil turns a blind eye to Xi Jinping’s authoritarian regime and the human rights abuses and hunting of ethnic minorities he promotes in his country, as China is Brazil’s biggest trading partner.

China uses Brics Bank and propaganda to increase its influence in the Global South

Since the Brics was created in 2009, China’s economy has taken off and today the country stands out with the second largest Gross Domestic Product (GDP) in the world. Beijing’s ambition, however, is to occupy the top position in this ranking.

With a GDP of over US$11 trillion, China is the largest economy in the Brics. Thus, the Asian country is also mainly responsible for financing the National Development Bank – also called Banco dos Brics.

The organization was officially created in 2015 so that its members could have access to funds to finance public or private infrastructure and sustainable development projects. Although with a smaller structure and contribution than similar organizations, the NDB was born with the intention of being an alternative and opposing western organizations, such as the World Bank and the International Monetary Fund.

The propaganda created around the bank tried to lead people to believe that developing countries could resort to “less bureaucratic” loans that would be more tangible for their realities.

Loans and financing granted by Western organizations are generally linked to demands for economic austerity measures and commitments to social and environmental issues. Therefore, the discourse of lending money and supposedly not meddling in the internal affairs of countries has attracted nations from the Global South.

But both Western and Chinese investments or those from the Brics Bank to developing countries are accompanied by an ideological charge and an attempt to influence their populations.

For example, an article in the American newspaper New York Times revealed that Beijing has sponsored newspapers to “propaganda” the Chinese government in developing nations, including Brazil.

The investigation showed that there is a network that finances left-wing media around the world to make positive publicity for the Chinese Communist Party. In Brazil, the vehicle identified was the portal Brazil in fact, known for publishing material favorable to the left. On its page, the portal has a space reserved for publishing a weekly bulletin with news from China.

Some of the reports praise the Brics and reproduce Xi Jinping’s speech on supporting Russia in the war and making financial negotiations without the intermediary of the dollar.

Creator of the term “Brics” says it is impossible to create common currency in the block

The Chinese discourse of contesting the hegemony of the dollar and defending the creation of a common currency for the Brics also became a common agenda among members of the bloc and was quickly adopted by Lula and Putin.

“Every night I ask myself why all countries are obliged to do their trade pegged to the dollar. Why can’t we do our trade pegged to our currency? Why are we not committed to innovation? “, said Lula in a speech in Shanghai this year.

The term Brics was coined in the early 2000s by economist Jim O’Neill, who worked at investment bank Goldman Sachs. He grouped Brazil, Russia, India and China as developing economies, at the time with many similarities, that had the potential to influence the global scenario for the next fifty years.

About ten years after the term was created, the countries decided to form a bloc and later include South Africa. In an interview with the British newspaper Financial Times on the last 15th, O’Neill said that the Brics “never achieved anything since they started to come together”.

He also criticized the idea of ​​creating a common currency among member countries. “It’s just ridiculous. Will they create a BRICS central bank? How would you do it? It’s almost embarrassing”, said Sachs about the creation of a common currency for negotiations between the members of the organization. He said, however, that the hegemony of the American dollar has been a great obstacle for emerging countries, which have to submit to the policies of the Fed, the US central bank.

Today O’Neill works for the British think tank Chatham House.

A People’s Gazette, experts said that the idea of ​​creating a common currency (which would exist alongside the currencies of member countries) could create financial instability in the global market. “This change would bring negative impacts for investors who “use their dollar reserves to invest and speculate on different stock exchanges”, said Rogério Pereira de Campos, doctor in Social Sciences and researcher at the Araporã Foundation.

South Africa, which holds the rotating presidency of the Brics, has already said that the issue of a common currency, defended by Lula, will not be on the agenda for discussions.

After participating in the BRICS Summit, Lula should visit Angola and São Tomé and Príncipe, both on the African continent.