Autor: Karolina Olszowy

Pulaski Policy Papers nr 4, 16th February 2024

On 1 January 2024, Russia took over the rotating chairmanship of the newly expanded BRICS. The Russian government has already planned a comprehensive range of activities across domains such as politics, security, economy, culture, education and sports, culminating in a summit scheduled for October in Kazan.^[1] As Moscow has repeatedly emphasised in the past few weeks, its presidency aims to increase the global influence of the BRICS nations.^[2] Also on the agenda are, first and foremost, issues concerning the development of a common trade settlement mechanism for member countries and the continued accession of new members. Significantly for Russia, this involves breaking Moscow’s international isolation.

 

Russia in the Era of an Enlarged BRICS

At the 15th BRICS summit held last year in Johannesburg, the accession of six countries was accepted. Egypt, Iran, the United Arab Emirates, Saudi Arabia, Ethiopia, and Argentina joined the format. They became official members in January 2024, excluding Argentina, which ultimately rejected the membership offer after Javier Milei won the presidential election.^[3]

The group’s expansion officially aims to build a more “inclusive and equitable”, which means less dependence on the Western liberal democracies, and international system. The accession of new members strengthens its political and economic clout, as well as the group’s international influence. The enlarged BRICS comprises approximately 46% of the world’s population and 29% of global GDP. With Saudi Arabia’s and the UAE’s accession to the bloc, the expanded BRICS accounts also for approximately 43% of the world’s oil production^[4]. However, the situation is more nuanced and complex as BRICS members have divergent foreign policy objectives (as BRICS makes decisions based on the principle of unanimity, it will become even more challenging with the addition of new countries). Internal conflicts among individual members are also a significant issue. India and China, along with longstanding territorial disputes, have been in strategic economic competition for years. The relations between Iran and Saudi Arabia also are far from being stable, as both continue competition for influence in the Middle East.

From Russia’s perspective, the expansion of BRICS is highly beneficial and demonstrates that Moscow is not as isolated as the West might wish. Some countries want to maintain friendly relations with Russia, and Putin is very keen to capitalise on this (Putin’s visits to e.g. Saudi Arabia and the United Arab Emirates in December 2023). Russia also tries to build an impression that the BRICS expansion is shifting the dividing line in the world, moving from the previous East-West divide to a confrontation between the countries of the affluent North and the developing Global South.

 

New Leadership and Russian Aspirations

On 1 January 2024, Russia assumed the presidency of BRICS. Putin announced this presidency will be held under the motto “strengthening multilateralism for equitable global development and security.” Russia plans to cultivate partnerships in three areas: (1) politics and security, (2) economics and finance, and (3) cultural and humanitarian contacts. Putin also intends to enhance the coordination of member countries’ foreign policies and undertake a „joint search for effective responses to challenges and threats to international and regional security and stability.” The security threat in which Russia is currently showing great interest is the Israeli-Palestinian conflict. Putin seeks to use this war to undermine the Western-led world order. By adopting a pro-Palestinian stance and hosting a delegation from Hamas in Moscow, Russia aims to win over countries in the Global South that stand in solidarity with the Palestinians. Russia has also offered to become a mediator in the conflict and host a foreign minister meeting. Such actions are intended to diminish the global role and influence of the US, which Putin blames for the outbreak of the war, arguing the war is a result of Washington’s policy. So, while BRICS has not and likely will not produce any concrete peace proposals or new stability formats for the world, Russia’s involvement in the Middle East conflict is a challenge to Western countries. It gives Moscow a platform to use in reaching a global audience and gaining credibility in the eyes of the part of the international community. Putin seeks to shift the world’s attention from the war in Ukraine to the one in the Middle East, stating, „When you look at the suffering and bloodied children (in Gaza), you clench your fists and tears come to your eyes”.^[5] Such words, being a reflection of hypocrisy (while at the same time, Russian rockets destroy apartment blocks in Ukraine), are intended to draw the world’s attention to the suffering of Palestinians so that it forgets the war in Ukraine more quickly.

Other Russian plans for its presidency include the implementation of the BRICS Economic Partnership Strategy for 2025 and the Innovative Cooperation Action Plan for 2021-2024.^[6] The BRICS Economic Partnership Strategy 2025 aims to enhance trade and economic cooperation among member countries. The document talks about reducing barriers to mutual trade in goods and services, improving supply chain connectivity, and strengthening investment links.^[7] Significantly, the actions referred to in the Strategy could help Russia circumvent sanctions imposed on it by Western countries. Strengthening financial cooperation within BRICS can help Russia access capital and financial instruments, despite the restrictions imposed by economic sanctions. By increasing the number of trade agreements, Russia can also gain alternative trade channels and access to new markets.

Another task the Russian government has begun working on is the expansion of BRICS climate cooperation. According to Putin’s order, the Cabinet of Ministers is tasked with submitting proposals for projects monitoring greenhouse gases and measuring the carbon balance of ecosystems by 3 June 2024— these will then be presented to the member states. Moscow’s plans also aim to lay the groundwork for BRICS members to jointly develop scientific and technological solutions for mitigating human impact on the environment.^[8] These initiatives may come as a surprise, as Russia is not a pro-environmental country (it is responsible for 4.8% of global greenhouse gas emissions worldwide, ranking in this regard fourth after China the United States and India).^[9] Nevertheless, Moscow recognises the growing climate-related problems in the South and wants to address them. For example, at the COP28 Climate Summit in Dubai, Russian officials claimed that Russia was exploring whether some of its gold reserves that Western countries had frozen could be used to help the Global South fight climate change.^[10] This is also a part of Russia’s effort to seek new allies and emerge from international isolation.

One of the more high-profile topics that have been discussed for some time is the BRICS countries’ goal to create their own currency for international settlements,^[11] However, it is doubtful that significant progress was made in this regard.

Moreover, according to Putin’s December 2023 press conference, Russia will dedicate its chairmanship of BRICS to building a fair world order, being an alternative to the Western one. Currently, nearly 30 countries are willing to join the bloc. These include Algeria, Bolivia, Indonesia, Cuba, the Democratic Republic of Congo, the Comoros, Gabon, and others for whom BRICS represents an alternative to the global institutions dominated by Western countries.^[12] Belarus and Kazakhstan will be given membership priority because they are among Russia’s closest partners.^[13] In addition, Putin announced “the development of rules for a new category of BRICS partner states.”^[14]

In total, Russia plans to host more than 200 events at various levels, including political, cultural, and sporting events. For Russia, the BRICS chairmanship is, first and foremost, an opportunity to overcome its isolation on the international stage. One of the steps towards this goal is cooperation with Egypt, where Rosatom is constructing the first El-Dabaa nuclear power plant. On 23 January 2024, Putin and Abdel Fattah el-Sisi attended an online ceremony to commemorate the pouring of concrete into the foundations of the fourth power unit.^[15]

 

Bypassing International Sanctions by Russia

Another way for Russia to address its international isolation is to consistently navigate around the sanctions imposed by Western countries following Moscow’s aggression in Ukraine. Initial export restrictions disrupted Russia’s trade, forcing Moscow to search for loopholes. For example, after restrictions were imposed on the supply of US telecoms equipment and Cisco (a U.S. tech provider) halted sales, the Russian company Convex found a roundabout way to obtain the needed equipment. It utilised an e-commerce site called Nag, which circumvented international trade restrictions by purchasing US components through a network of suppliers in China. In this way, Russia managed to acquire basic telecommunications equipment, monitoring devices, microchips for advanced computers, weapons systems, and drones.

Another way to circumvent sanctions was through the use of transhipment. Countries like Morocco and Turkey received goods from global technology production centres at their ports and loaded them onto ships bound for Russia. Russian officials regularly exchanged information in emails about which ports they would use to transship goods or where they could repair their ships. Another electronics supply company, ProSoft, maintained a supply of Western technology through a little-known scrap company registered in Casablanca, Morocco. These included „nearly 300 products containing Intel chips, as well as components made by Nvidia and a computer chip optimised for artificial intelligence designed by Google”.^[16]

Russia also circumvented sanctions imposed on it by Taiwan. The restrictions, which have been in place since 2022, covered high-tech and dual-use (civil-military) technology goods, including semiconductors, aerospace and computer technology, lasers, and sensors. Despite the sanctions, Taiwan has become the main supplier of machine tools— the backbone of the manufacturing and military industries— to the Russian defence industry, as those purchased in the West have been restricted. Taiwanese electric discharge machines have also been supplied to Russia’s Lebedev Physical Institute, which is subject to U.S. sanctions. Supplies of Taiwanese technology to Russia were routed through third countries such as Turkey and the United Arab Emirates. The Economic Department of Taiwan’s International Trade Administration reported a 16-fold increase in fines for supplying prohibited goods and technology to Russia and Belarus. The authorities also announced tighter controls on the supply of Taiwanese technology to Russia through third countries.^[17]

 

Conclusions

1. The decision to expand BRICS aims to create a “more representative” international system that is not as dominated by the West. It increases its potential politically, economically, and geopolitically on the international stage. At the same time, however, it should be kept in mind that BRICS is not entirely anti-Western, as some of its member states, such as India and Saudi Arabia, wish to maintain friendly relations with Western countries.
2. Despite potential benefits, the expansion of BRICS poses new challenges for the group. The lack of formal character of the organisation and the differing foreign policy objectives of the members make decision-making and consensus-building difficult. Attaching so many different countries to the organisation could destroy it from within, causing it to lose its original identity. Additionally, internal conflicts among individual members may limit the effectiveness of the group’s activities.
3. The expansion of BRICS is seen as beneficial by Russia, as it enables Moscow to maintain friendly relations with member states and shifts the dividing line in the international arena. It also demonstrates that Russia is not isolated and can actively participate in global initiatives, which can be used as a tool to strengthen its position in the world.
4. Russia is employing diverse and creative methods to circumvent sanctions imposed by the West. This allows Russia to maintain access to key technologies and prevent its isolation on the international stage. Increasing cooperation with BRICS countries and accepting new members is a way to avoid sanctions and isolation.

Author: Karolina Olszowy, external contributor

 

^[1] ‘Обращение Владимира Путина в связи с началом председательства России в БРИКС’, Kremlin.ru, January 1, 2024, http://kremlin.ru/events/president/news/73202

^[2] ‘Russia assumes one-year rotating chairmanship of expanded BRICS from January 1’, Tass, January 1, 2024, https://tass.com/politics/1728509

^[3] ‘Argentina pulls out of plans to join Brics bloc’, BBC News, December 29, 2023, https://www.bbc.com/news/world-latin-america-67842992

^[4] ‘Visualizing the BRICS Expansion in 4 Charts’, Visual Capitalist, August 24, 2023, https://www.visualcapitalist.com/visualizing-the-brics-expansion-in-4-charts/

^[5] ‘Russia’s Putin tries to use Gaza war to his geopolitical advantage’, Reuters, November 17, 2023, https://www.reuters.com/world/russias-putin-sees-political-economic-upside-israels-war-with-hamas-2023-11-17/

^[6] ‘Обращение Владимира Путина в связи с началом председательства России в БРИКС’, Kremlin.ru, January 1, 2024, http://kremlin.ru/events/president/news/73202

^[7] ‘Strategy for BRICS Economic Partnership 2025’, BRICS Information Centre, November 2020, http://www.brics.utoronto.ca/docs/2020-strategy.html

^[8] ‘Правительство РФ проработает вопрос расширения климатического сотрудничества в БРИКС’, TV BRICS, January 26, 2024,

https://tvbrics.com/news/pravitelstvo-rf-obsudit-rasshirenie-sotrudnichestva-v-brics-po-voprosam-klimata/

^[9] ‘GHG emissions of all world countries’, European Commission, 2023, https://edgar.jrc.ec.europa.eu/report_2023?vis=ghgtot#emissions_table

^[10] ‘Russia studying allocation of frozen gold reserves to Global South for climate change’, The Kyiv Independent, December 10, 2023, https://kyivindependent.com/russia-studying-allocation-of-frozen-gold-reserves-to-global-south-for-climate-change/

^[11] ‘BRICS Currency to Facilitate International Settlements: Glazyev’, Telesur, October 24, 2023, https://www.telesurenglish.net/news/BRICS-Currency-to-Facilitate-International-Settlements-Glazyev-20231024-0007.html

^[12] ‘What is BRICS, which countries want to join and why?’, Reuters, August 22, 2023, https://www.reuters.com/world/what-is-brics-who-are-its-members-2023-08-21/

^[13] ‘МИД РФ: Москва уделит особое внимание Беларуси и Казахстану при расширении БРИКС’, Анадолу, August 25, 2023, https://www.aa.com.tr/ru/мир/мид-рф-москва-уделит-особое-внимание-беларуси-и-казахстану-при-расширении-брикс/2976084

^[14] ‘Обращение Владимира Путина в связи с началом председательства России в БРИКС’, Kremlin.ru, January 1, 2024, http://kremlin.ru/events/president/news/73202

^[15] ‘РФ и Египет запустят новый этап строительства атомной электростанции’, TV BRICS, January 23, 2024, https://tvbrics.com/news/rf-i-egipet-zapustyat-novyy-etap-stroitelstva-atomnoy-elektrostantsii/

^[16] ‘Chinese Traders and Moroccan Ports: How Russia Flouts Global Tech Bans’, The New York Times, December 19, 2023, https://www.nytimes.com/2023/12/19/technology/russia-flouts-global-tech-bans.html

^[17] ‘《報導者》獨家調查：台灣工具機流入俄羅斯軍工業和核子物理研究所’, The Reporter, January 23, 2024, https://www.twreporter.org/a/taiwan-machine-tool-russia-enduser