BRICS: ‘Expansion’ Explained!
The BRICS family is all set to grow, as the forum of five major emerging economies (Brazil, Russia, India, China and South Africa) announced during its recently held annual conference in Johannesburg that some counties would become full members of this Group in early 2024. BRICS has confirmed that Argentina, Ethiopia, Iran, Egypt, Saudi Arabia and the United Arab Emirates (UAE) would soon become members of the Group that was formed in 2009 by Brazil, Russia, India and China. Later, South Africa joined BRICS.
Reports suggest that 40 countries in the Global South, affected by the Russia-Ukraine War, are eager to join the Group in the post-COVID period. These countries have started considering the BRICS as an ideal platform to present their financial woes. And, 22 of these 40 countries formally applied for membership ahead of the 15th BRICS Summit held in South Africa on August 22-24, 2023. Hence, it can be assumed that the group will grow further in the future.
One of the aims of this expansion is to reduce the dominance of the US Dollar in international trade transactions, and to develop alternative mechanisms. Although China and Russia have been somewhat successful in reducing their dependence on the US Dollar, other BRICS members are still dependent on the US currency. Even the National Development Bank (NDB), set up by the original BRICS members as an alternative to the World Bank (WB) and International Monetary Fund (IMF), has lent so far in US Dollars. As per a survey, the majority of the amount that the financial institution has lent so far is in Dollars. Hence, there are serious doubts about whether the goal of reducing the dominance of the US Dollar would be achieved at all in the coming months.
Experts consider the expansion of the BRICS as a political victory for China and Russia, which are keen to build the Group as a rival to the G7, the current driver of the global economy. Although the Kremlin wants to respond to the Western alliance by using this platform, Beijing’s intention is a little different. The Asian Giant is trying to set up a geopolitical system by expanding the BRICS so that the new system could help build a China-led alternative world order in the future.
Beijing has already taken necessary steps to include countries, like Saudi Arabia, in BRICS. It may be noted that China recently played an important role in normalising ties between Saudi Arabia and Iran. The US had made an attempt to play this role in the past, but failed. It is a serious issue and a cause of concern for India. China’s intention to expand the BRICS for building a new geopolitical system may not be a good piece of news for India, but the proposed inclusion of Iran and the UAE to the group could certainly give some relief to New Delhi.
Experts believe India needs to be careful about the fact that serving the national interest of one or more countries should not be the only purpose of expansion of the BRICS in the coming years. Disagreements between member countries in this regard had affected the functioning of international groups, such as the Organisation of Islamic Cooperation, the G77 and the Non-Aligned Movement (NAM), in the past. The BRICS should not suffer a similar fate due to the same reason.
An Emergency Programme To Save Argentina
The Schiller Institute – a German-based political and economic think tank founded by Helga Zepp-LaRouche, with stated members in 50 countries – issued a statement on September 4, 2023. According to the statement, there are certain battles that cannot be avoided and must be won. One such is the battle to get the US and Western Europe to change their current geopolitical confrontation course with Russia and China, a course meant to enforce the bankrupt trans-Atlantic financial system and its unipolar world order. The alternative to winning this battle is probable thermonuclear war.
Another is the upcoming Presidential Election in Argentina to be held on October 22, 2023, which is shaping up as the immediate, first battleground between the newly-expanded BRICS-11 process, and that same bankrupt trans-Atlantic system – a system that is terrified that it will be swept away by the tidal wave of nations joining the BRICS, the emerging Global Majority. The outcome of that showdown will surely determine the future of Argentina for decades to come. However, it may also decide the fate of the BRICS as well.
Argentina is one of six nations that joined the BRICS during the August 22-24 (2023) Summit in Johannesburg, despite threats and pressure to not do so. Now there are another 20-30 countries that want to follow suit, and join the Global Majority in building a new development and security architecture for their nations and the world. The City of London and Wall Street urgently need to make a bloody example of Argentina and prevent it from ever joining the BRICS on January 1, 2024, by beating that nation’s economy to a bloody pulp through debt collection and capital flight, and in that way fully discredit the current Alberto Fernández Government and its candidate, Economics Minister Sergio Massa, and hand victory to the psychologically unstable Javier Milei.
Bankers’ favourite Milei, who some call Argentina’s Zelenskyy, has already sworn that, if he wins, he will pull Argentina out of the BRICS even before it joins; eliminate Argentina’s currency (and thus its sovereignty) and replace it with the speculators’ Dollar; break ties with China, Russia, and most of Argentina’s Ibero-American neighbours; and otherwise implement extreme Neo-Liberal policies that will deliver a coup de grâce to the nation’s physical economy.
The economic crisis is already so grave in Argentina that Massa, who is currently in charge of negotiations with the IMF hit-men, was slammed in presidential primaries in August, with the three leading candidates (Massa, Milei and Neo-liberal Patricia Bullrich) each getting about a third of the votes, It is a shocking setback for Massa, who had expected a much stronger showing.
Today, Argentina is in the death choke of the IMF and the trans-Atlantic banks it represents. Those banks forcibly indebted the Latin American country under the previous Macri Government, the way an aggressive drug dealer shoves fentanyl down a victim’s throat. As a result, Argentina is by far the largest debtor of the IMF, at USD 46 billion. Massive capital flight, orchestrated by the same banks, has bled the country white; the parallel-market Peso has plunged from 200 to 600 to the US Dollar in a year’s time; interest rates today stand at 118%; and inflation for the year is forecast by the IMF to come in at 108%, which has played a major role in driving about half the population into poverty.
If Argentina can be picked off by the bankers, its neighbour and ally Brazil, one of the five founding members of the BRICS, will be the next. And the message will have been delivered to the world: “Try to break with our system, and we will financially ‘waterboard’ you and wipe you off the map.”
This message is the same one pronounced in 1969 by the arrogant Henry Kissinger, then National Security Adviser to President Richard Nixon, to visiting Chilean Foreign Minister Gabriel Valdés: “Nothing important can come from the South. History has never been produced in the South. The axis of history starts in Moscow, goes to Bonn, crosses over to Washington, and then goes to Tokyo. What happens in the South is of no importance. You’re wasting your time.” Meanwhile, the BRICS are now proving Kissinger wrong.
The Schiller Institute has proposed an emergency programme for Argentina and the BRICS to win that battle, which specifies the immediate steps to be taken by the Alberto Fernández Government and candidate Sergio Massa of the Unión por la Patria ruling coalition, well before the October 22 Presidential Election so that its impact will already be felt by election day. Based on Lyndon LaRouche’s work in the science of physical economy, the Schiller Institute has proposed nine specific measures that fall under three broad policy headings, to be adopted for Argentina. It should be considered as an example for the world.
A) Stop the bloodletting: People First!
Argentine peso
- Declare an immediate debt moratorium on the servicing of the USD 275 billion foreign debt, including USD 46 billion owed to the IMF, the largest amount owed that institution by any country in the world. Unilaterally break off all negotiations with the IMF, whose initials in Portuguese (FMI), according to Brazilian patriots, in fact stand for ‘Fome, Miséria, e Inflação‘ (Hunger, Poverty and Inflation).
- Impose full capital and exchange controls, including the obligatory conversion of all export earnings into pesos for deposit in Argentine banks. These measures will end the free convertibility of Pesos into Dollars, and stop the speculation and capital flight that it promotes.
- Establish a fixed parity between the Peso and Dollar, as sovereignly determined by the Argentine Government, for approved categories of international trade, travel and other productive uses of foreign exchange. Speculative international banking transactions are not in the approved category, and illegal efforts to carry them out should be severely penalised by confiscation and legal proceedings. Franklin D Roosevelt had demonstrated that bankers tend to respond with remarkable rationality when facing the prospect of losing both their speculative assets and their freedom.
The international floating exchange rate system that was ushered in with the August 15, 1971 measures announced by the then US President, Richard Nixon, was the catastrophic turning point that opened the doors to the USD 2 quadrillion speculative bubble that has recently taken over the entire trans-Atlantic financial system. A return to a fixed-rate system of productive (non-speculative) national currencies, long advocated by Lyndon LaRouche, is now on the agenda, far sooner than most expected.
Push
B) Provide an urgent transfusion of productive credit
- Issue emergency government funds and subsidies to the poorest Argentines (half now live in poverty) and to businesses otherwise heading towards bankruptcy. Debt service payments on the government’s large domestic bonded debt (which totalled almost USD 400 billion in March 2023) must be frozen, until such time as the urgent needs of the population have been met. Economics Minister Massa announced measures in late August to provide some emergency relief, but what the government hands out on a Monday is stolen from Argentines on Tuesday by the bankers’ imposition of over 100% hyper-inflation and rampant capital flight. That will change with the implementation of measures 2 and 3 above.
- Nationalise the autonomous Central Bank (BCRA), which is in fact controlled by the City of London and Wall Street, and reestablish a National Bank that issues Peso-denominated productive credit, at 1-2% interest rates. Argentina has such precedents in its history, as does the US with Alexander Hamilton’s First Bank of the US of 1791.
- End runaway inflation by establishing strict price controls for market baskets of essential consumer and producer goods. Inflation-generating high interest rates, banker-imposed devaluations, and the international speculative carry-trade will all have been banished and will no longer be factors creating skyrocketing domestic prices.
- Expand trade in national currencies with BRICS members and other friendly nations, taking full advantage of Argentina’s new membership in the BRICS and its access to the New Development Bank (NDB). This will also help Argentina gain access to non-dollar credit lines for investment purposes from those countries and the NDB. The BRICS nations must respond to Argentina’s battle for survival as if their own existence depended on it – because it does.
C) Launch great infrastructure projects
The bi-oceanic high-speed rail corridors linking the Atlantic and Pacific coasts of South America must be built, as part of a reestablished sense of long-term mission for Argentina, and the entire region. Convoke an international conference to be held in Buenos Aires in mid-October 2023 to get the projects quickly approved and launched, with the participation of high-level government representatives from Brazil, Peru, Bolivia and China (the country that has the required rail technology and has for years offered to build such projects, under its Belt and Road Initiative (BRI) proposal). In China, such infrastructure projects have raised the technological platform of entire regions and have been essential to that the country’s spectacular achievement of lifting some 850 million Chinese out of extreme poverty in the last four decades. The growing sense in Argentina and across the Global Majority is: If China can do it, why not we?
Argentina must also join the world’s space-faring nations, as India just succeeded in doing with its Chandrayaan-3 moon landing. Argentina already has an active space programme, and Brazil’s Alcântara space launch facility near the Equator is the perfect centre for a cooperative South American effort, along with international allies from among BRICS nations and others. The Alcântara base (and the European Union’s space facility in Kourou, French Guiana – should they choose to join the effort) can serve as the hub for the rapid training of a highly productive, skilled labour force for the entire region. This can be taken up at the same mid-October international conference, with the critical addition of India as a participating nation. After all: If India can do it, why not we?
Such a set of measures will save Argentina from becoming a failed state. The country should be allowed to proudly join the BRICS on January 1, 2024, and to strengthen the BRICS’ strategic role for the battles that lie ahead. Argentina would not survive without the BRICS. Also, the BRICS may not survive without Argentina.
President Luiz Inácio Lula da Silva of Brazil recently stated: “I cannot accept that it is normal for a citizen to be born poor and die poor, for their child to be born poor and die poor, for their grandchild to be born poor and die poor… We do not have the right to remain poor… We do not have the right to continue being called the Third World.”
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