Brazil’s refusal, like India before it, to join China’s Belt and Road Initiative (BRI) has significant implications for the functioning of BRICS+ in the geopolitics of the Global South.
The Latin American country’s decision is a double whammy for China, coming shortly before President Xi Jinping’s ambitious visit to Brasilia in the second half of November, hoping to formalise Brazil’s entry.
In the process, there appears a possibility of two of the world’s fastest developing economies, with a remarkable record of economic cooperation and trade, standing together to see that BRICS+ veers neither to the powerful China-Russia alliance within or the US-West power bloc without.
As previous and current chairs of G20 and invitees to influential global groupings, Brazil and India can now garner attention in having a say in the geopolitics of the Global South, acquiring, in the process, the backing of the smaller countries in Asia, Africa, and Latin America who like to be non-aligned.
With Xi visiting Brazil for the G20 conference in Rio de Janeiro in November, and the two presidents also meeting that month at the Asia-Pacific Economic Cooperation (APEC) summit in Peru, Chinese officials are keen to seal the deal during the golden jubilee of Brazil-China relations.
Brazil’s caution over BRI shows that it wants to avoid binding commitments that might link its economy too closely to China’s goals. This strategy allows Brazil to use Chinese funding for infrastructure without becoming too dependent on China. By staying outside formal BRI membership, Brazil keeps the freedom to choose projects that fit its economic goals reducing the risk of relying too heavily on a single foreign power.
Brazil also wants to protect its industries and ensure that any projects with China bring mutual benefits. Unlike smaller countries that depend heavily on China for support, Brazil has a strong economy and abundant natural resources, giving it more power to negotiate. Brazilian officials worry that joining the BRI might lead to exporting raw materials without truly advancing Brazil’s economy.
Instead, Brazil wants partnerships that bring in new technology and strengthen areas that support its goals for reindustrialisation. Brazil also wants to avoid causing tension with the US. Recently, US Trade Representative Katherine Tai advised Brazil to think carefully about joining the BRI, pointing out potential risks.
By staying out of the BRI, Brazil aims to keep its options open, allowing it to build strong trade relations with both the US and China without being caught in a power struggle.
President Xi Jinping has visited the region at least eleven times since he took office in 2013. In addition to several bilateral agreements with countries in the region, China has signed comprehensive strategic partnerships—the highest classification it awards to its diplomatic allies—with Argentina, Brazil, Chile, Ecuador, Mexico, Peru, and Venezuela.
China has been investing heavily in Latin America for more than a decade. It has built roads and dams in Brazil’s Amazon rainforest as land is cleared to grow more soybeans for export to China. It has also built or expanded ports in Peru, Mexico, Panama; a dam and surveillance system in Ecuador; and dozens of other projects throughout the region. In Latin America, 19 countries have now joined China’s Belt and Road Initiative — after a decade in which trade between China and Latin America increased multiple times.
The hope across much of Latin America had been that signing on to Belt and Road Initiative membership would bring more Chinese investment of the kind each country needed, and more opportunities for Latin American countries to export to China, narrowing often sizable trade imbalances. That has not always happened. Venezuela and Ecuador, for instance, now have high debts to China and new economic woes in the wake of COVID-19.
India was opposed to the BRI concept from the beginning. Shorn of all frills, the concept is not a global organization but a constellation of mini-bilaterals between each member country and China. India always suspected it would not offer a level playing field to the country’s businesses. It also opposed BRI because a key component—the China-Pakistan Economic Corridor (CPEC)—passes through PoK, an Indian territory that has been under the illegal occupation of Pakistan.
The intergovernmental organisation BRICS originally comprised Brazil, Russia, India, China, and South Africa. Later, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates were admitted as member states. It is now called BRICS+.
The organization is now caught in the China-Russia vortex. The two powers want to expand the body to increase their global clout vis-à-vis the United States and project their influence over the Global South.
The resistance comes from two up-and-coming powers, India and Brazil. They are among the biggest economies in the world, with enviable geographies and demographics. Leading the pack is India with its policy of multi-alignment that makes it accept concessional oil from sanctioned Russia while escaping the wrath of the United States. That is because India is a key criterion in the West’s policy towards the Indo-Pacific.
China realizes the value of BRICS+ even though the body is still a bloc of countries with scattered relationships. The expanded BRICS bloc now represents roughly 45 percent of the world’s population, and with the inclusion of the UAE and Iran, the bloc accounts for almost 30 percent of global oil output, a number that would dramatically increase should Saudi Arabia join. In terms of purchasing power parity (PPP), the newly expanded bloc now holds 35 percent compared to 23 percent of global PPP 20 years ago. For comparison, the G7 group held 40 percent PPP in 2004, compared to 29 percent this year.
According to reports, the latest expansion is not set to end with Egypt, Ethiopia, Iran, and the UAE. It is estimated that over 40 countries have expressed interest in joining the forum and that 24 countries are in the formal application process. While no formal invitations were given to countries in Kazan, a new category of “partner countries” emerged to signal future rounds of expansion—a via media between Brazil and India’s staunch opposition and China and Russia’s drive to expand the bloc.
An expanding BRICS+ attracts countries that feel neglected by the current international order and virtually taken for granted. The presence of India, and now possibly Brazil, maybe the catalyst needed to give an orientation towards the South with a perspective different from both the US and China.