Seppo Niemi 11.8.2024
BRICS and SCO, overview 2024
“The best way to predict the future is to create it”, Abraham Lincoln
BRICS overview 2024
Russia took over the year-long presidency of the BRICS group on January 1, 2024. Over 250 events are expected to be held as part of Moscow’s BRICS Presidency, which will culminate in the group’s summit in Kazan in October 2024.
Summit of BRICS Foreign Ministers on June 10–11, 2024, in Nizhny Novgorod, Russia
Foreign ministers from the members of BRICS gathered on 10–11 June in the Russian city of Nizhny Novgorod for an annual meeting. This was the group’s first regular meeting since BRICS expanded this year to include new members Egypt, Ethiopia, Iran and the United Arab Emirates. Well over 30 more countries want to cooperate with BRICS in various formats.
The parties were discussing current issues of international relations, international agenda, improvement of the global governance system with emphasis on strengthening the role of developing countries, conflict resolution and interaction in leading multilateral platforms. The BRICS foreign ministers agreed upon a joint statement.
Foreign ministers from some non-BRICs members were invited, too, most notably Turkish Foreign Minister Hakan Fidan, who attended. Russia welcomes Ankara's interest in the work of BRICS, Putin said at a meeting with Turkish Foreign Minister Fidan.
Preparations for the upcoming 16th BRICS summit, which will be held in Kazan in October 2024, are on the agenda. Almost all leaders of BRICS countries have confirmed their participation in the group’s summit Russian Foreign Minister Sergey Lavrov told reporters.
The 10th jubilee BRICS Parliamentary Forum in St. Petersburg, July 11–12, 2024
The central topic of the forum is "The Role of Parliaments in the Strengthening of Multipolarity for Fair Global Development and Security". Russian President Vladimir Putin attended the 10th jubilee BRICS Parliamentary Forum. Around 400 delegates from 16 countries, including Russia, took part in the forum.
During the Parliamentary Forum, a protocol to the memorandum of understanding was signed and a joint declaration passed. A number of meetings between the speakers of both houses of Russian parliament with their foreign colleagues were held on the sidelines of the forum. BRICS may create a parliamentary body in the future, Russian President Vladimir Putin said, addressing the BRICS Parliamentary Forum.
Bloc’s expansion and action plans for 2024
BRICS membership
The BRICS group has seen two waves of expansion since its establishment in 2006. In 2011, South Africa joined the four founding nations of Brazil, Russia, India and China. In August 2023, six new members, including Argentina, were invited to join the group. However, Argentina turned down the invitation in late December.
Five new members – Egypt, Iran, the United Arab Emirates, Saudi Arabia and Ethiopia – were integrated into the BRICS family on January 1, 2024. Thus, the full members of the association now include Brazil, Russia, India, China, South Africa, Egypt, Iran, UAE, Saudi Arabia, and Ethiopia.
Regarding new member candidates, in the beginning of 2024, nearly 20 more countries have formally applied to join BRICS: Azerbaijan, Algeria, Bahrain, Bangladesh, Belarus, Bolivia, Cuba, Honduras, Kazakhstan, Kuwait, Malaysia, Pakistan, Palestine, Senegal, Thailand, Venezuela, Vietnam. In addition, further expansion is possible: Afghanistan, Angola, Comoros, Chad, DR Congo, Gabon, Guinea-Bissau, Equatorial Guinea, Eritrea, Indonesia, Libya, Mexico, Morocco, Myanmar, Nigeria, Nicaragua, Serbia, Sri Lanka, South Sudan, Sudan, Syria, Tunisia, Turkey, Uganda, Uruguay and Zimbabwe have expressed interest in membership of BRICS. The new membership plan is under preparation for the 22–24 October Summit in Kazan, Russia. BRICS may emerge as the second largest bloc just after the UN. If considering the potential members in the near future, it may be a group of around 50 countries.
Only countries that don’t engage in a policy of illegal sanctions against other countries can be admitted to BRICS, Russian Deputy Foreign Minister Sergey Ryabkov said. "One of the key criteria for the BRICS membership or for being admitted as a partner state is the applicants’ non-participation in the policy of illegal sanctions.
Action plans and performance
Russia will chair BRICS in 2024 under the motto "Strengthening Multilateralism for Equitable Global Development and Security." According to the Russian Foreign Ministry, the country plans to hold more than 200 events of various levels, which will be hosted by more than a dozen Russian cities. The BRICS foreign ministers meet in Nizhny Novgorod in June and the high-level summit will be held in Kazan in October.
BRICS has also created significant initiatives, from which the following can be mentioned:
The New Development Bank (NDB), formally referred to as the BRICS Development Bank, is a multilateral development bank operated by the five BRICS states. The bank’s primary focus of lending is infrastructure projects with authorized lending of up to $34 billion annually. South Africa hosts the African headquarters of the bank. The bank has a starting capital of $50 billion, with wealth increased to $100 billion over time. It is not a replacement of existing global financial institutions but is supporting the existing financial system.
The BRICS Contingent Reserve Arrangement (CRA) is a framework for providing protection against global liquidity pressures. This includes currency issues, where members’ national currencies are being adversely affected by global financial pressures. Emerging economies that experienced rapid economic liberalization went through increased economic volatility, bringing an uncertain macroeconomic environment. The CRA competes with the International Monetary Fund (IMF). Along with the New Development Bank, it is an example of increasing South-South cooperation. It was established in 2015 by the BRICS countries.
BRICS Partnership on New Industrial Revolution innovation Center (BPI). China, being the most important member of the BRICS, has established this Center (BPI). In November 2020, President Xi Jinping announced that China will set up an innovation center for BRICS partnership on new industrial revolution in Xiamen City of Fujian province with a clear focus on policy coordination, personnel training and project development. It has become an important platform for the BRICS members to promote partnerships and to leverage each other’s strengths to develop and prosper against the background of the Fourth Industrial Revolution.
De-dollarization process, initiated and supported by BRICS countries
China and Russia are the key promoters of de-dollarization process worldwide. They actively advance moving away from dollar-based trade to national currencies.
BRICS payment system. At the 2015 Summit in Russia, the BRICS finance ministers started consultations for a payment system that would be an alternative to the SWIFT system. The stated goal was to move to settlements in national currencies. China launched its own alternative to SWIFT: the Cross-Border Interbank Payment System, India also has its alternative Structured Financial Messaging System (SFMS), as do Russia SPFS and Brazil Pix.
Potential common currency, BRICS countries committed to study the feasibility of a new common currency or similar, at the 2023 BRICS summit in South Africa. Fair and easier international trade as well as a major reduction in costs of transactions would be some of the reasons why the countries could forge a currency union. Dependence on US Dollars may be reduced drastically. The new BRICS currency may be based on gold standard and the commodity basket.
BRICS is actively seeking to establish a new currency on the world stage, aiming to challenge the dominance of the US dollar. Many nations in Asia, Africa and Latin America are considering reducing their reliance on the US dollar.
Russia, China and India ditch US Dollar in 95% of trade. A firm sign of growing BRICS de-dollarization efforts, Russia, China and India have ditched the US dollar in 95% of bilateral trade during 2024. The shift was defined by a massive increase in local currency usage in the trade between Russia and the two BRICS nations. Moreover, the ICC reported that Russia’s export settlements in either the US dollar or the Euro also fell drastically.
The BRICS countries will actively seek solutions to remove financial interaction from Western influence, Russian Deputy Foreign Minister Sergey Ryabkov said at a press conference following the first meeting of the representatives of all ten BRICS nations in early February 2024, in Moscow. Russia proposed to the BRICS members to form an alternative banking structure to secure trade operations that are politically autonomous.
South African Ambassador Kwele admitted in interview the progress made towards a common BRICS currency. He highlighted the alliance’s efforts to promote the use of local currencies among member states in order to mitigate the risks associated with excessive dependence on the US dollar. The upcoming BRICS summit, in October 2024, promises to reveal more details about this currency venture.
BRICS countries supported Russia’s initiative to create a grain exchange, Agriculture Minister Oksana Lut told reporters following the 14th meeting of the BRICS agriculture ministers, June 28, Moscow. At the meeting the ministers also touched upon the key issues of BRICS food security, as well as global food security. The BRICS countries now make up about 30% of all arable land in the world and jointly produce about 40% of grain crops, 50% of fish and 50% of dairy products worldwide.
SCO overview 2024
The SCO (Shanghai Cooperation Organization) in short: founded on June 15, 2001, in Shanghai. Initially the organization included Russia, Kazakhstan, Kyrgyzstan, China, Tajikistan and Uzbekistan, in 2017 they were joined by India and Pakistan. Iran applied to join in 2008 and became a full-fledged member of the organization in July 2023. Belarus is to join the group soon.
Russia considers SCO and BRICS as backbones of new international order. SCO already integrates 26 countries, including ten member-states (considering Belarus that will join the organization at the summit), two observers and 14 dialogue partners. Beijing will assume the rotating chairmanship of the SCO for 2024–2025.
Ministerial meeting of SCO, May 20–21, 2024, Astana, Kazakhstan
The SCO foreign ministers discussed preparations for the organization’s summit due to be held on July 3 and 4, as well as topical international topics. Special attention focused on the prospects for the organization’s further development and its adaptation to the formation of a new world order. Foreign ministers held a number of bilateral meetings.
The ministers agreed upon a package of documents to be signed by the heads of state. The July 3–4 summit is expected to endorse Belarus’ admission to the SCO as its full-fledged member. The ministers also discussed the situation in the Gaza Strip and in the Middle East in general, as well as issues of promoting stabilization in Afghanistan, combating terrorism and drug threats.
Summit of SCO in Astana on 3–4 July, 2024
The SCO summit was held on July 4 at the Palace of Independence in Astana, Kazakhstan. SCO Secretary General Zhang Ming attended the summit as well UN Secretary-General Antonio Guterres and the leaders of several international organizations, which were also invited.
On July 3, the first day of the summit, the head of states held a series of bilateral talks. Russian President Vladimir Putin opened a series of bilateral meetings with his Mongolian counterpart Khurelsukh. Putin is scheduled to hold talks with the heads of at least six countries, namely Azerbaijan, Kazakhstan, China, Turkey and Pakistan. A meeting with the Iranian acting president will also take place. Besides, Putin may talk to UN Secretary General Antonio Guterres.
Foreign ministers of Russia, China and Mongolia, Sergey Lavrov, Wang Yi and Battsetseg Batmunkh, reaffirmed their interest in integrating joint economic projects with the activities of the Eurasian Economic Union, with China’s implementation of BRI and with Mongolia’s Steppe Road Plan. This reflects their common interests and will contribute to harmonizing various information processes as part of creating the Greater Eurasian Partnership.
On July 4, head of states and delegations participate in the SCO Summit
Agenda of the meeting. Participants discussed the organization’s work in 2023–2024. They also considered further strengthening of the organization and promotion of cooperation in the areas of politics, security, economy and humanitarian ties. Besides, the heads of state exchange views on pressing issues on the international and regional agenda. During the Council meeting, reports were heard from the heads of the SCO standing bodies: the organization's secretary general, Zhang Ming and the director of the Regional Anti-Terrorist Structure Ruslan Mirzayev.
The SCO leaders signed documents on the admission of the Republic of Belarus to the organization. Belarus officially became a member of the SCO.
Twenty-four documents were adopted at the SCO summit. The central final document is the declaration of the SCO Council of Heads of State. The document reflects the consolidated approaches of the participating countries on current regional and international problems. The heads of state also adopted a Statement on the Principles of Good Neighborliness, Trust and Partnership.
The leaders also signed a decision on the approval of the initiative "On World Unity for a Just Peace and Harmony," which is designed to "confirm the commitment to the formation of the most representative, democratic, fair, multipolar world order with the central coordinating role of the UN."
SCO Plus format
The first meeting of the SCO Plus format on the sidelines of the SCO summit was also held on July 4 in Astana. The topic of the meeting is "Strengthening multilateral dialogue - the pursuit of sustainable peace and development." Among those who were invited to the first meeting in the SCO plus format are President of Azerbaijan Aliyev, Emir of Qatar Sheikh Hamad Al Thani, President of Mongolia Khurelsukh, President of Turkey Erdogan, the ruler of the emirate of Ras Al Khaimah, Supreme Council member of the Emirates Sheikh Al Qasimi and Chairman of the People's Council of Turkmenistan Berdimuhamedov. UN Secretary-General Antonio Guterres and the leaders of several international organizations were also invited, including CIS Secretary General Lebedev and Secretary General of the CSTO Tasmagambetov.
President Putin spoke to reporters following the SCO summit
Key excerpts from his keynote speech: Development of cooperation within the SCO; Security and combating terrorism; Multipolar world and emerging new world order; Economic cooperation within the bloc; Conflicts in Ukraine and in Middle East; Youth Networks within the bloc.
Conclusions from the SCO Summit
Following the results of the 24th summit, SCO participants signed the Astana Declaration.
The security of the SCO member states remains a priority task. SCO’s regional anti-terrorist agency will be transformed into a universal center that will deal with the entire spectrum of security threats. The program of security cooperation will also contribute to the fight against separatism and extremism in the SCO area. The SCO protects its right to development and stimulate regional economy, resist external interference and provide each other with strong support and increase the exchange of intelligence data. The SCO regional anti-terrorist structure will be transformed into a universal center and the center will respond to the full range of security threats. A Center for Combating Drug Trafficking has been created in Tajikistan's Dushanbe.
The tenth participant member has been accepted – Belarus. For a country bordering the West, this is another means of protection, as well as an economic connection to new North-South transport corridors.
The new security paradigm in Eurasia proposed by Russia is designed to replace outdated Euro-Atlantic models. The Russian Federation is ready to respond in the same way in the event of the deployment of American medium- and shorter-range missiles in any region of the world. Thus, the SCO summit has laid the foundation to a new Eurasian security system that will restrain NATO's expansion.
Two other security issues were also discussed in Astana. Regarding Ukraine: Putin said that Russia proposed its plan to end the hostilities but Moscow would take into account the proposals from its SCO partners. Regarding India–China border issue: India and China agreed to begin negotiations to resolve problems along their borders, the Indian Foreign Minister said in a statement. The image of the SCO power bloc will depend on how border problems in the China-India-Pakistan triangle are going to be resolved.
Multipolar world. Changes in the world order are occurring rapidly and irreversibly, the multipolar world is officially here. The SCO and BRICS "act as a powerful engine of global development processes and the establishment of true multipolarity." Today, as the world goes through rapid and irreversible changes, the SCO’s proactive position in international affairs is much needed. A multipolar world is already a reality.
Along with BRICS, the SCO is a pillar of the emerging new world order. These two organizations serve as a powerful driving force behind global development processes and efforts to ensure true multipolarity. The SCO’s initiative "On Global Unity for a Just World and Harmony" marks a step towards multipolarity. The expanded format of the summit with the participation of the UN Secretary General suggests that Asia is determined to build a multipolar world with the support of the UN.
Development of cooperation within the SCO. All members attach great importance to cooperation within the SCO, which continues to develop progressively on the principles of equal rights, consideration of each other's interests, respect for cultural and civilizational diversity and the search for collective solutions to pressing security issues.
Economic cooperation. The draft decision on the development strategy of the association until 2035 outlines the prospects for further deepening cooperation not only in politics and security, but also in the economy, energy, agriculture, high technology and innovation. Use of national currencies: SCO nations are increasing the use of national currencies in mutual settlements, their share in Russia's commercial transactions with the members of the organization has already exceeded 92% in the first four months of 2024.
New members. Several countries want to change their status in the SCO and work more closely with the association: Cambodia, Bangladesh, Sri Lanka, Armenia and Azerbaijan applied to change their status from dialogue partner to observer. The summit in Astana showed how the SCO has really stepped up the game after incorporating India, Pakistan and Iran and now Belarus as new members, plus establishing key players such as Turkey, Saudi Arabia, UAE, Qatar and Azerbaijan as dialogue partners and strategic Afghanistan and Mongolia as observers.
SCO Summit shows Asia’s determination to build multipolar world. It also shows that the organization understands the threats to its security. The SCO positions itself as an organization that, in addition to developing regional economic ties, strengthens the security of member countries and struggles against terrorism and drug trafficking. It has been a long way from the original Shanghai Five back in 2001 to the present SCO as a serious geoeconomic cooperation bloc.
Summary and conclusions: BRICS and SCO in the Big Picture
The need for a new world order is a recurring theme now, when the unipolar world is falling behind and the era of a multipolar world is emerging. For the US, as the falling global hegemon, it involves adjusting to the reality of a shifting balance of power, which the US must come to terms with.
Today, new forces have emerged to challenge the existing world order: one of them is BRICS, then Chinese BRI, Asian SCO, Eurasian EAEU as well as Greater Eurasian Partnership. These new forces cover about seven billion people or over 80% of the world’s population. So called “western bloc” represents approx. 20% of world’s population. The end game in the new world order is going.
The importance of the 2024 summit of SCO in Astana, can be considered as a prelude to the crucial BRICS annual summit, under the Russian presidency, next October 2024 in Kazan.
SCO members see “tectonic shifts are underway” in geopolitics and geoeconomics. That multipolar, political and economic international order they support, is in a sharp contrast with the unilaterally-imposed “rules-based international order” the US and its allies support.
The focus of “world affairs” has moved to east, Russian-Chinese maneuvers in Eurasia are, de facto, linking security in Asia as indivisible with security in Europe. A new Eurasia-wide security architecture is an upgrade of the Russian concept of Greater Eurasian Partnership – involving a series of bilateral and multilateral guarantees. Russia and China are the leaders of Eurasia integration and the drive towards a multipolar world.
Astana once again revealed how the main drivers of the SCO are advancing fast from energy cooperation to cross-border transportation corridors. The road map ahead includes socio-economic integration and the development of international transportation corridors – from the INSTC (Russia-Iran-India) to the China-supported “Middle Corridor”.
Moscow and Beijing see the new evolving multipolar reality – SCO and SCO+, BRICS 10 and BRICS+, EAEU, ASEAN, INSTC and other corridors, new trade settlement platforms, the new Eurasian security architecture as well as Sino-Russian bilateral cooperation – as “the Eastern Juggernaut” in the complex, long-term strategy of meticulously shattering the domination of the US hegemon worldwide.
The US sees the SCO as an anti-Western alliance. Due to the conflict in Ukraine, Russia, as a member state of the SCO, is now in direct conflict with the West. The discussion about Taiwan is also bringing China increasingly into conflict with the US and its allies. So, it can be said that the SCO is an anti-Western alliance, not because of the founding idea but as a reaction to “Western provocations”.
In the long term, of course, is crucial how the BRICS as an alliance will develop. The further development of these organizations will greatly depend on their cooperation and the division of tasks and responsibilities. China and Russia have key roles in this process.
Helsinki, 11.8. 2024
Seppo Niemi
kansainvälisen politiikan tutkija