by Samuel Furfari – originally published in Factuel in French. Republished here in English translation with permission of the author.
As the BRICS countries have expanded to include six new members, economic commentators have focused on the role of currencies. This is understandable. But we should not lose sight of the power of the BRICS+, which stems from their control over oil and gas reserves. These countries are also concerned about their own economic growth and that of their customers in the Global South, so next November’s COP28 is already shaping up to be a failure for the EU’s anti-growth agenda.
More BRICS… Powerful
The BRICS group of countries has decided to expand: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates will join founding members Brazil, Russia, India, China and South Africa on 1 January 2024.
The other candidate countries will have to wait to join, because this club of countries attracts a lot of people. Some ‘political’ researchers scoffed, arguing in particular that there are huge disparities between the countries of what I will call the BRICS+. Aren’t there huge disparities in the EU, for example between the economies of Germany and Cyprus? After all, there is no question of a union or institutions between the BRICS countries, as there is in the EU.
The BRICS+ are an informal grouping, just like the G7 or the G20. These groups have emerged because formal multilateral cooperation, sublimated in the United Nations, has become ineffective, unnecessary and costly. The strategic competition between the great powers is growing and can no longer be reduced to the great UN convolutions and lost in agencies or bodies such as the COPs, which have sufficiently demonstrated their emptiness.
These 11 countries carry considerable weight on a global scale. They account for 36% of the world’s landmass, compared with 16% of the G7. With 45% of the world’s population, they are almost five times as populous as the G7. In economic terms, the BRICS+ are also larger than the G7 (37% of world GDP compared to 30% of the G7). In terms of food, they are also better off than the G7: they produce almost half of the wheat and 55% of the rice. Brazil, India and Argentina are among the top five beef-exporting countries. They are also dominant in steel and aluminium production. Steel, so vital to the construction and automotive industries, is 70% produced in the BRIC+ countries, including five of the world’s top eleven producers. Aluminium, an essential metal for modern life, especially in the mobility sector, is almost 80% in the hands of this group of countries. We will see later on their strategic importance in terms of energy, but it is worth remembering that without coal there is no steel production and without electricity there is no aluminium production. Not surprisingly, energy is of strategic importance to these consumer giants.
Clearly, China is the heavyweight in almost all of these comparisons. Most economists, both inside and outside China, expect its economy to grow by 5% a year. This growth cycle has been impressive over the years, but we are seeing a shift in pace that could be worrying if confirmed. The problems facing the Chinese economy are political and systemic. China’s economy is struggling because its authoritarian demons are catching up with it and crippling the private sector. This possible decline in China’s influence will affect the internal balance of the BRICS+, which will not displease the other members of the group, but will not call into question the predominant and growing weight of this grouping, because one way or another, China will not collapse.
United Nations Pond
The BRICS meet at the highest leadership level to further consolidate and strengthen mutual trust in order to influence the world’s major strategic directions. It is clear that this group intends to mark its difference from the G7, the main leaders of the OECD countries (and NATO, with the exception of Japan and Australia). Indeed, how can we not see the BRICS as an alter ego of the OECD, which no longer accepts the dominance of the United States? The war in Ukraine has brought this opposition to the fore, so much so that Vladimir Putin was unable to travel to Johannesburg due to sanctions imposed by the West and had to participate via videoconference. He will have his revenge next year when the BRICS meet in Moscow.
But the bridges have not been completely burned, because beyond bilateral relations, which remain largely intact, the G20 is an opportunity for the BRICS+ and the G7 to talk to each other. Argentina, Brazil, China, Russia, India and Saudi Arabia are members of these two informal groups, and the latter will host the annual G20 meeting on 9–10 September.
Western media often speculate about whether China wants to introduce the yuan to compete with the dollar, or whether the BRICS want to have a common currency. The state of the Chinese currency discredits this hypothesis. In fact, it is a distraction because it is not the real issue.
It is becoming increasingly clear that the geopolitical cards are being reshuffled.
The rise of the ‘workshop of the world’ — China – and the ‘office of the world’ — India – thanks to the enormous firepower of a population that is at last educated and no longer dependent on subsistence farming is arousing the interest of what is now called the ‘Global South’. This neologism refers to countries that have been described as ‘emerging’, ‘developing’ or even, ‘less developed or underdeveloped’. The majority of these countries are located in the global south, mainly in Africa, Asia and Latin America.
These countries, their leaders, their populations and, above all, their young people, who are discovering the reality of the rich world thanks to the Internet, only want to live well, like the G7 countries. There is only one condition for this: economic growth.
China shows that economic growth is possible even in a dictatorship.
The corollary of economic growth is the growth of energy consumption, because the physical concept of work is exactly the same as that of energy. Without energy, there can be no work, and without work, there can be no economic growth and therefore no social development.
The rise of India
In contrast to Russia’s failed moon landing on 19 August, the successful landing of the Indian lunar module near the moon’s south pole on 23 August confirms India’s mastery of space technology. This gives India the right to claim to be a leading power. Of the four countries that have successfully landed on the Moon, three are BRICS members (China and Russia before India). The success of the Chandrayaan-3 lunar landing confirms India’s place in the Artemis Agreement, the multilateral initiative led by the US NASA to send men to the Moon by 2025.
Another area in which India has surprised is the extraordinary progress it has made in electrifying the country, a key parameter of prosperity. Millions of Indians suffered from backward economic development, negatively affecting health care and quality of life. Poor lighting prevented people from working after dark, and a lack of water pumps limited the use of modern toilets. Since 2000, successive governments have been determined to end this energy poverty, manifested primarily in the lack of electricity. Today, 99% of Indians are connected to the grid, even as the population has grown from 926 million in 1993 to 1,428 million today. Thirty years ago, that figure was only 50%. How has this been possible? It was the massive use of coal that made this electricity revolution possible. Thirty years ago, India consumed 5.36 exajoules (EJ) of coal, compared with 20.09 EJ today.
Seventy-five percent of India’s electricity is generated by coal, so much maligned in the EU. There can be no economic miracle without abundant and cheap energy, as China has shown.
Obviously, unlike Brussels-Strasbourg, the Indian authorities are not obsessed with reducing CO₂ emissions. That is why India, along with China, opposed the inclusion in the Glasgow COP26 conclusions of the need to reduce coal consumption.
On August 25, India’s Minister of Electricity and New and Renewable Energy, Shri R. K. Singh, called for a change in the discourse and argument on global climate change, shifting the focus from total emissions to per capita emissions in each country. On the Ministry of Energy’s website, his call is clear: ‘India’s per capita emissions are one third of the global average, one of the lowest in the world; despite this, developed countries have until recently pressured large countries like India to reduce their emissions. Their per capita emissions remained three to four times higher than the global average. The speech was [so far] about each country’s total emissions.’
Shri Singh delivered the coup de grace by declaring that ‘the housing stock of developing countries will multiply, as we grow; We will need more cement, steel and aluminium to build these buildings and factories. This will lead to an increase in emissions. So we need to develop [to be allowed to develop].’
The Global South has understood that if it wants to develop, it must do so by consuming fossil fuels and thus emitting CO₂.
The United Arab Emirates – a new member of BRICS+ – has chosen to include the colour black in its flag as a reminder that its prosperity is due to black gold.
MEPs have asked the Emir of the United Arab Emirates to remove Sultan al Jabal from the presidency of COP 28, to be held in Dubai in November 2023, because – the ultimate sin – he is the president of ADNOC, the company that manages the country’s hydrocarbon production. Federal Council member Ali bin Rashid al-Nuaimi did not hesitate to criticise these lessons: European lawmakers, ‘advocate international intervention in a sovereign decision – the latest effort in a long series of Western efforts to impose their will on global governments in the Global South for national political gain.’
With 46% of world consumption, the BRICS+ are major energy consumers: 35% of world oil, 36% of natural gas and 72% of coal.
They hold 42% of oil reserves, 50% of gas reserves and even 40% of coal reserves. Their energy future is therefore secure, which is clearly not the case for the EU, which is isolated in this area because its privileged ally, the United States, has also secured its energy future thanks to shale oil and gas. There is not enough space here to highlight the blow of Iran’s admission to this group at a time when the country is still being roundly criticised by the US and, to some extent, the European Union. With 9% and 17% of the world’s oil and gas reserves respectively, the BRICS+ have secured a significant proportion of their hydrocarbon needs.
The decline of the EU
Not only are the BRICS+ big consumers, as we have seen, but they also need customers to ensure their growth. The Global South does not want to consume for consumption’s sake, as some of the G7 countries do, but out of a need to get out of poverty or even to limit emigration, which, if it continued, would have harmful consequences for African countries.
The BRICS+ and the Global South are therefore objective allies for economic growth and will therefore consume more energy.
Given that, after fifty years of research and promotion, wind and solar PV account for only 3% of primary energy demand globally and in the EU, the demand for conventional energy (fossil fuels, nuclear and hydro) will only increase.
Meanwhile, in the EU, which is the big loser in this BRICS development, the raison d’être is decarbonisation.
But because it is utopian, it has to resort to economic and demographic decline. Is it because it knows that its energy future is not green but gloomy that it is funding studies on degrowth? The Flemish media Doorbraak has just reported that three activists from the degrowth movement have been awarded a contract worth 9.9 million euros to write pamphlets and campaign for six years at the expense of the European Union to defend their retrograde political choice. Will MEPs speak out against this political abuse of the so-called Horizon Europe research programme? It reminds me of what an Italian MEP once said: ‘If you think you are a leader and nobody follows you, you are a loser.’ The BRICS+ demonstrate this obviousness.
Prof. Samuel Furfari’s books available on Amazon.