Cables From The Diplomatic Frontlines - BRICS expands with new member states: implications, exaggerations, and realistic threats.

BRICS expands: instead of similar economies, governance models, or values, what unites new members is a desire to maximize leverage.

• The past two weeks saw a flurry of punditry on the recently announced expansion of BRICS.

• As a quick refresher, the BRICS had agreed to admit Saudi Arabia, Iran, Ethiopia, Egypt, Argentina and the United Arab Emirates as new members of the bloc - they are to formally join in January 2024.

• And as if to somewhat relieve the Western fears that China was boosting its global soft power and becoming a stronger diplomatic challenge to the US, Beijing was quick to give up on this positive PR, and decided to run another one of its “great state autism” campaigns by releasing a new map of the South China Sea.

• Unsurprisingly, this did not go well with the Philippines, Taiwan, Malaysia or Vietnam.

• Two of these aforementioned states are military allies of the US (although, one could certainly argue that Taiwan is a burden rather than a full-on reciprocal ally - this doesn’t however diminish the strategic importance of defending the island).

• The other two (Vietnam and Malaysia), are moving closer and closer to becoming formal military and strategic partners of the US - China’s insistence on claiming expansionist interpretation over the South China Sea will certainly push them ever closer in this direction.

• In other words, even if China was in fact strengthening its geopolitical clout via expanded BRICS, it is decidedly not doing the same in southeast Asia and the Pacific - the main geopolitical arenas of this century.

• But also, is this BRICS expansion really as significant of a development as it seems?

• Is BRICS really an institution that could rival the EU, G7, or NATO? (the common, totally uncredible, and hyperbolic comparisons attached by many pundits in the West).

• The answer of course, is clearly not.

• But to see why, we need to unpack the following: 1) What BRICS is and is not, 2) Who are the new members and what political objectives unite them in their desire to join, and 3) What is the likely maximum that BRICS could ever amount to?

BRICS to date.

• It is important to remember that the acronym that describes this group of rapidly developing alternative powers, originates from a term used by a Goldman Sachs banker Jim O’Neill in his investment research/bulletin.

• O’Neill highlighted the rapid growth of Brazil, Russia, India, and China - especially in purchasing power parity terms (PPP).

• (side note: purchasing power parity is especially important in the context of war planning. If a country’s nominal GDP in $ terms is relatively modest, but it can in reality produce (domestically) a lot of parts for its military-industrial complex at a very low cost, then that number is more relevant in future war planning. This is one of the reasons why Russia’s staying power (in Ukraine) war was significantly underestimated - yes, in nominal $ terms, its economy is comparable to that of Italy’s, but in real PPP terms it is much bigger, in fact at $4trillion it is 25% larger than that of France or UK (last available figures were in 2021 - it is difficult to say whether Russia’s real/PPP GDP has declined since then - in fact, it may have risen). Similarly, the true threat of China becomes clear when PPP terms are used - it is ahead of America. Again not all too relevant in day to day life - most things of value are priced in $.. but when it comes to war planning, producing a lot of stuff very cheaply matters more)

• Originally the term ended at C - with China.

• Later on, South Africa joined in 2010, and the acronym was updated to BRICS.

• It is of course ironic that a term coined by a Goldman Sachs investment analyst (literally, the epitome of Western capitalist establishment) is now to somehow amount to a political institution intent on challenging the West by providing a geopolitical counterweight.

• But has it done any of that?