The world’s most powerful leaders will soon meet in New Delhi, heralding the culmination of India’s G20 presidency. While the G20 has delivered very little since its early successes following the 2008 global financial crisis, there are two reasons why the group’s coming summit still matters for India.
First, Prime Minister Narendra Modi has turned the G20 presidency into a major domestic issue by involving all of India in the preparations. G20 posters featuring Modi are plastered across the country, signalling his intention to present India as a key player on the global stage. The more that Indians are persuaded their country is a vishwaguru (teacher to the world), the greater the ruling party’s chances in upcoming state elections and next year’s national elections.
Second, India now faces a big strategic choice, following the Brics’ (Brazil, Russia, India, China and South Africa) decision to add Saudi Arabia, Iran, Ethiopia, Egypt, Argentina and the United Arab Emirates. Until recently, the Brics was anomalous in design and ineffective (and thus harmless) in operation.
But Brics+ is more political in focus, more China-centric in leadership, and more anti-West in motivation. Its composition is shaping its character. The question for India, then, is whether it still makes sense to belong to such a grouping.
That answer is “probably not”, for three reasons. First, consider the economics. The attraction of the original Brics (South Africa joined in 2010) lay in its members’ economic dynamism. Back in 2004, Brazil, Russia, India and China were booming. But today, the Brics risks becoming a collective of fading stars. To be sure, many of the Brics still have high levels of wealth. In particular, China, Russia, Saudi Arabia and the UAE still have the resources needed to partner with and donate to poorer countries. But wealth alone is no guarantee of global economic influence. Just look at Japan. Developing and emerging economies aren’t particularly interested in a potential partner’s glorious past; they want to align with countries that are on the rise.
There is no doubt that the Brics of 2023 is much less dynamic than it was two decades ago. Gone are the days when China could effortlessly achieve 10% annual growth. The economic model that produced those spectacular results has broken down, such that most analysts now expect secular growth of 3% or less. Meanwhile, Russia has been in terminal decline for years – and now its war of aggression will enfeeble it further. Though Brazil is currently enjoying a boom on the back of higher commodity prices, it remains to be seen if its fortunes can be sustained.
As for the others, Argentina is teetering, yet again, on the edge of financial collapse, and South Africa remains saddled with astronomically high unemployment and profound governance and fiscal challenges. Egypt needs support from the International Monetary Fund to ensure any semblance of macroeconomic stability, and even Saudi Arabia and the UAE are living on borrowed time: a concerted global push on climate change will leave them stranded with devalued hydrocarbon assets.
In short, Brics+ comprises a bunch of economic has-beens. The big exception is India, which is still growing rapidly, with long-term prospects that have improved markedly in recent years. Since it no longer has much in common with the other Brics members, it should consider leaving – both for symbolic and practical reasons.
That brings us to the second big issue: politics. The new Brics+ shows every sign of becoming more political, and in ways that pose serious problems for India. For starters, its increasingly China-centric, anti-Western orientation runs counter to India’s longstanding principle of non-alignment. Maintaining equidistance from rival power blocs has always been a central tenet of Indian foreign policy, which it has upheld even in the face of Russia’s war on Ukraine.
To Modi’s enormous credit, India has managed to move closer to the United States and Japan while also maintaining its relations with Russia; it has also deepened its ties with Israel and forged better relations with Egypt, Saudi Arabia and, especially, the UAE. Is India prepared to jeopardize this success just to remain a member in good standing within the enlarged Brics+?
Moreover, apart from Argentina and Ethiopia, the new members are all autocracies, and this fact matters now that the group is becoming more political. Does India really want to belong to an authoritarian club? Notwithstanding its own political backsliding under Modi, it still counts democracy as its international calling card.
The third reason to quit the Brics concerns global governance. There is no longer any doubt that the US- and G7-led international order is unfit for purpose. After all, multilateral financial institutions do not give nearly enough voice to rising powers; multilateral trade institutions have been undermined through unilateral protectionist measures; and interdependence itself has been weaponized in the name of US national security.
But even if India would prefer a new world order, its vision would not coincide with that of China, Russia or Saudi Arabia. Among other things, the other Brics members aspire to dethrone the US dollar as the world’s dominant currency, and to provide alternative development resources and emergency funding to poorer countries. But these objectives imply that a better world would be based on renminbi dominance, Belt and Road Initiative-type lending, and a greater reluctance among official creditors to write-off debts when poor countries face crises.
These solutions are not obviously better than the status quo, and from India’s perspective, they are almost certainly worse. How would India benefit from replacing US dominance with Chinese dominance? By lending its weight to Brics+, it would become complicit in supporting China’s geopolitical aspirations.
Since India already eschewed membership in the China-centred Regional Comprehensive Economic Partnership, it would be rather odd for it to align with China in a quasi-political grouping. The feeling appears to be mutual: Chinese President Xi Jinping reportedly intends to skip the G20 summit.
That should make India’s choice easier. The G7 is outdated, and Brics+ is no alternative. Tedious and performative though it has become, the multilateralism of the G20 remains a sliver of hope in navigating a new world of fragmented disorder.
As an assertion of its emerging strength, India should leave the Brics. And, as a signal of its commitment to constructive alternatives, it should strive to make the G20 a success.
Arvind Subramanian is a senior fellow at the Peterson Institute for International Economics and Josh Felman is a principal of JH Consulting.
Copyright: Project Syndicate