BRICS Nations and the Future of Emerging Markets

KNIGHT: Great. Good morning, everyone. I’m Ed Knight, the executive vice chairman of Nasdaq. And today, the Council—and I want to thank the staff again for all their help in putting this together—but the Council has assembled a distinguished group of experts to discuss the recent BRICS summit in South Africa.

The results of that summit highlight what the Financial Times recently called a, quote, “movement” from the prix fixe menu of global alliances to the à la carte world. The menu of these global alliances has shifted to a more fluid world order, and we’re going to discuss that today. The unexpected announcement of the admission of six new BRICS members underscored how rapidly things are changing.

Today, we have CFR scholars from the world of law, diplomacy, and the academy who have spent decades directly engaged in these issues. I won’t repeat their bios. They’re there for you to examine. But we all know Ken Juster, who comes to us from distinguished service as ambassador to India; Esther Brimmer, who has spent many years at senior levels of the State Department working on international organizations; and Zoe Liu, as CFR fellow for international politics and economy, has recently co-authored among other things a book on China and its economic diplomacy and Can BRICS De-dollarize the Global Financial System?, which we’ll get into in a moment.

But to start things off, I’m going to ask Esther if she could explain to us what BRICS is exactly and how it has evolved over the last fifteen years. Esther, you’ve said the world still needs the United Nations. Does the world need BRICS? And if it does, where does it fit with the multiplicity of multilateral economic groupings? Esther?

BRIMMER: Well, first, good morning. It’s good to see everyone on the screen. And welcome to all the participants in this meeting. I’m looking forward to this conversation about BRICS and their implications.

But if I may take a moment and just recall the history of BRICS, it began life, actually, as an analytical term. Jim O’Neill at Goldman Sachs first creates the term to apply to Brazil, Russia, India, and China, followed by a small S, to talk about these emerging economies that are both economically important but were beginning also to play a larger role on the global stage. In 2006, those four countries start having regular meetings of their foreign ministers. And in 2011, it expands to include South Africa. So it goes from a concept to actually a practical diplomatic interaction.

What we see now is that BRICS has now taken on a much larger political role and it’s had the addition of resources. There’s now the New Development Bank, which is part of the BRICS framework.

But we should keep in mind that there are many different types of international organizations. Of course, the United Nations is our core, fundamental global body, but there are many different formulations. And so, sitting in the United States, we tend to think of those institutions where the United States is a member or which we helped found, especially those core institutions founded after the Second World War. That said, we have to recognize that the multilateral world now has many different type(s) of organizations in many different formats. And the BRICS has evolved, but it’s one of many different groupings because states realize that in multilateral diplomacy you need to be playing on multiple fields.

KNIGHT: Oops. Thank you, Esther.

As I mentioned, you’ve written recently on the topic of BRICS and de-dollarization, the future of the dollar. And we’d love to hear, is BRICS going to be a tool to be used by those who want to de-dollarize the global financial system? Is that part of what, for instance, China is trying to do in its participation in BRICS and as it kind of develops its new economic playbook? Zoe?

LIU: Thank you. Thank you. And thank you, Esther. And many thanks to everybody who has tuned in. You know, thank you, also, Ed, for reading some of my publications.

But just going to directly to our question, is BRICS going to be a tool used by those wanting to de-dollarize the global financial system? Yes, I did write about can the BRICS de-dollarize the global financial system, and I do think that the expanded BRICS group has certainly gathered a sort of formidable group of countries who are highly incentivized to promote the development of an alternative, non-dollar-based financial system. And they do have economic reasons to do so, but I think more importantly they want to hedge against sanctions by the United States and the West. In particular, this is the case for Russia, Iran, and China as well, and I think recently news headlines saying that Venezuela is very much interested in as well.

But I wanted to clarify that there is a difference between de-dollarization, dethroning the dollar, the promoting of an alternative global financial system, or renminbi internationalization, and I do think these terms are very different. And I do think BRICS has gathered enough weight to pursue an alternative to the existing dollar-based system. You know these countries, they have the motivations both economically and geoeconomically, and they have the infrastructure. Both China, India, and Russia have developed their own domestic-oriented financial infrastructure. And they also have been trading with each other—a lot of the idea is that, you know, since you are already each other’s—one of the largest trading partners, then why you have to go to a third type of currency to raise the transaction cost as well as currency exchange risk cost.

So they also have very motivated leaders, like Putin, like President Xi Jinping, like the Brazilians’ president. But I would also try to say that, well, it’s very different—the de-dollarization is very different than trying to promote an alternative financial system because, even in the context of China or in the context of Putin, leaders have not—haven’t think about the pursuing of a de-dollarized world as the optimal outcome. And in many ways—Putin himself actually said, you know, the reason why Russia has to pursue a SPF System is specifically because they are under sanctions. (Laughs.) And, yes, China perhaps is another very highly motivated member to de-dollarize, but none of—so far, no Chinese officials have publicly talked about de-dollarization. When they talk about a development of alternative financial system, they have always carefully framed it in the context of a more diversified global currency system, promoting the broader use of local currency in international trade. No Chinese leaders have actively talked about de-dollarize or the use of—dethroning the dollar. And in many ways, China would be the largest loser in a de-dollarized world.

So I’ll just stop there by saying that, yes, they having a formidable group for the pursuit of an alternative system, but they are far from de-dollarization. And in particular, the existing global system is still—in particular, the rules are still based upon the dollar and American banking system and American rule of law.

KNIGHT: That’s a great point, Zoe, the difference between de-dollarization and the issue of sanctions and avoiding them.

Ken, a lot of news coming out of India. And as you know better than anyone, it’s the world’s largest democracy and a BRICS founder, and it’s been a leader of the unaligned world from its founding seventy-five years ago. Its first prime minister, Nehru, said: We are not pro-Russian. We are not pro-American. We are pro-Indian. Does that still hold true? And how does BRICS fit into India’s ambitions as a leader of the Global South?

JUSTER: Well, thanks very much, Ed. It’s a pleasure to be here with this distinguished panel and with yourself.

Yes, it is still true. After independence, India very consciously did not want to have any allies. It wanted to not be subordinated to other countries in the way it was during its colonial period. And so it was one of the leaders of the Non-Aligned Movement. That non-alignment or unalignment has adapted over time to different circumstances, but India still eschews alliances and now people refer to its strategic autonomy. Even with the United States, many people assume that the U.S. and India are allies. We are not. We are strategic partners, as is India with approximately thirty other countries. India really supports a multipolar world and seeks to have good relationships with virtually all countries, and the BRICS is part of that history.

Before BRICS and even BRIC, there was RIC—Russia, India, and China. And this was initially Russia’s effort, joined by India and China, to make sure that there was not a unipolar world led by the United States, but that there was a multipolar world. Then Brazil was brought in and China’s economy started to dominate the BRIC countries, and even perhaps dominate the organization. And then they brought in South Africa. But throughout this, India has sought to be a part of many groupings—BRICS is only one of them; it’s in the Quad, it’s in the Shanghai Cooperation Organization, and several others—and really to, instead of have alliances, have a network of groupings that would address its primary interests and concerns, and also put India somewhat at the center of that in being the country that can bridge the gaps between the North and the South and the East and the West.

KNIGHT: Thank you very much, Ambassador. And appreciate that perspective.

Esther, can we turn to the U.S. and how they look at this? I know that’s something you worked on for many years, the U.S. position vis-à-vis all these multilateral organizations. Jake Sullivan said, quote, you know, “BRICS is not a geopolitical rival” after the BRICS summit. And frankly, is that—is that true from your perspective? If it is not a rival, is this something that we view as a useful organization for us to work with?

BRIMMER: Indeed, overall I would agree with the idea that it is not a geopolitical rival. I think we need to take a very different view of the multilateral system.

I quite liked the title of Anne Marie Slaughter’s book, The Chessboard and the Web. And we too often tend to see the world as a chessboard—two opposing forces in a sort of military relationship even in civilian affairs. Actually, the web idea or the network idea is a much better description of our international system, and that countries are actually learning something the United States has actually known for a long time, that there’s actually diplomatic benefit and overall geopolitical benefit from being a member of multiple organizations; that part of your influence comes from the fact that you sit in many different rooms, and so that whether you are a member state of an organization or even an observer, that you are part of multiple networks. As Ken has just indicated, India’s right in the middle of that and understanding that. And so I would say that actually from the U.S. point of view that the emergence of BRICS is not a threat, but one of many different configurations.

Back when I was teaching, I came up with a list just of seven different uses or purposes for international organizations. I won’t list all of them, but I’ll flag that international organizations such as the BRICS can do things such as provide for discussion and preparing proposals, setting agendas for action, bringing sustained attention and resources to certain issues. And indeed, many organizations, including the United States, use these groupings often to develop positions with likeminded states that you then may take to other international bodies.

So we have to think of the world as a web of relationships. BRICS is part of that web. And so the United States needs to know how to work in that web. First point is, whenever you have a chance, you should be in the room, even if you’re just an observer.

KNIGHT: Makes a lot of sense. Thank you, Esther.

And I’m going to direct the next question to Zoe, but I welcome the other members of the panel’s thoughts. But, Zoe, some of the headlines coming out of the BRICS summit portrayed the meeting as a great success for Russia and China because they were pushing for the immediate addition of new members, and supposedly India did not want that and others, and in the end six were added. So do you view this as a big success for China and Russia?

And while we’re talking about China and Russia, I would welcome your views on how China views Russia as an ally now with the issues coming out of Ukraine and out of Russia itself. Is Russia more a source of worry than a strategic support for China? Zoe?

LIU: Yeah. Thank you. Yeah. Thank you, Ed, for the question.

I think there are different bars to measure whether BRICS summit, in particular the expansion, is a success or not. Personally, I think the success in terms of expansion, it adds nominal weight to BRICS as a counterbalance to, say, G-20, as some news headlines would portray it. But again, I wanted to emphasize it’s nominal in the sense that BRICS members, even with the addition—you’ve actually introduced more historical and current rivals than making it more holistic and robust, or more—a group of solidarity. So, from that perspective, it’s perhaps the expansion often introduced potential conflicts. And given that BRICS has always been operating as a consensus-based group—every member has a veto power—so far we do not know exactly the expanded version of BRICS would operating—would be operating on the similar rule, which is everybody would have the equal amount of veto power, or existing member would be more important than the newer addition ones. But that said, I think that given that BRICS members have never had solidarity since they first came together, perhaps there is also no worry about a crisis of solidarity, given that they’ve learned how to deal with it.

And then, in terms of what kind of ally—(laughs)—Russia is to China, I mean, honestly, I think I am among many people both in the United States as well as elsewhere, and some scholars in China as well would share my perspective, which is Russia is not an ally of China, and if anything Russia is a strategic liability. (Laughs.) However, I think there is legitimately reasons if we view from Beijing’s perspective, in particular viewing from President Xi Jinping’s perspective, they want to keep Russia as a partner, because having Russia as a partner serves several purposes in the current geoeconomic landscape.

And I think, you know, if we can just put them in four different baskets, I think first of all having Russia as a partner, they can be partners in great-power competition. And then the idea is that China would not only—would not try—would not draw all the attentions of the United States. You have a formidable partner that can share the burden.

And then, secondly, Russia actually has emerged as a very important market for Chinese exports, in particular with the exit of massive foreign companies. And recently, while everybody—major world leaders are gathering in—were gathering in India for the G-20, President Xi didn’t even go. And guess where he went? He went to China’s rust belt in the north, and there he emphasized—he made a speech and he emphasized that China would want to continue opening up to the north. And the question I have is: Well, opening up to the north? You know, China’s north and that area is Russia. Despite that, he didn’t say it. So I think it’s a very important market for Chinese exports.

And then, thirdly, given that the Chinese economy still very much is energy-intense, obviously given Russia’s under sanctions, it makes Russian energy export both in terms of oil and natural gas—and natural gas in particular—very important for China.

And then the fourth area would be related to a more diversified international currency and financial system, forming a bloc and promoting a bloc to develop an alternative in case of sanctions.

JUSTER: Ed, can I just add a thought to what Zoe has said and building on Esther’s earlier comments? The BRICS began initially as an economic organization and related to what was viewed as the major emerging economies. Over time—(laughs)—some of these economies have not done as well as, let’s say, China has, and it’s sort of morphed into partially a political organization. And the countries that are members of the BRICS I think actually view the expansion a bit differently.

As you said, I think China and Russia were pushing for it, and in my view they really hoped to create BRICS as an almost anti-Western organization if not an anti-U.S. one, but one in which they really want to change the international order as it currently exists; whereas India is slightly different, as reports had they initially may not have wanted the expansion because it may have reduced its own influence. But they welcomed it, and they welcomed it as their leading the voices of the Global South, the lower- and middle-income countries or (swing ?) countries, not to demolish the existing international order but to reform it and to make sure that these countries had a greater voice in today’s international organizations—that there was more democracy, that the principles that are important to them get recognized by the rest of the world. And so India has tried to position this as not a—anti-Western or anti-U.S., but as an effort to have a multipolar world in which there is a more equitable distribution of power and attention to problems relating to countries of the so-called Global South.

KNIGHT: Thank you, Ken.

Esther, any comments on success or failure for anyone coming out of this, or?

BRIMMER: Indeed. I think I’d also want to pick up on what my colleagues have commented on, both note what did not happen, and some additional things that did happen. One of the things that did not happen, of course, is that President Putin did not go to the BRICS summit because of the concern about would South Africa honor its responsibilities as a member of the International Criminal Court regarding the arrest warrants. So, fortunately, South Africa avoided that problem by him not going. So first, you know, they avoided that crisis. And crises avoid are a good thing.

The other thing is to note what did happen. So there is another way to look at the expansion of BRICS. The first is the arrival of additional African countries. You could argue that, by and large, African countries are underrepresented in multiple multilateral bodies. And so if you take both the expansion of BRICS and look at the G-20, what we see is leading African countries having a greater role. So if—you have the arrival of Egypt and Ethiopia to the BRICS. And you have the arrival of the African Union to the G-20. Now, there’s a whole story which I’m happy to go in the questions if people are interested, about how the European Union and the African Union would be treated in international bodies. And for a while there, the EU had rights, for various reasons, that they definitely did not. And what we see is the expression of internationally minded, politically emerging African states. So you need to keep that in mind.

The other is increasing economic heft for the BRICS. I mean, bringing in Saudi Arabia and UAE. That you’re seeing countries that are taking large roles. Obviously, Saudi Arabia’s exploring really new relationships. And UAE is showing up in all sorts of places. And I worry about, among other things, about space policy. They’re actually one of the places that’s encouraging commerce in outer space. We have to rethink what states are doing. More states want to play roles in different parts of the international system. And we see that both with the expansion of BRICS and what’s happening with the G-20.

KNIGHT: Thank you, Esther.

Ken, of course this past weekend we had the G-20 meeting. And it was Delhi. And Prime Minister Modi has been seemingly everywhere over the last six months. And leading up to this G-20 meeting, of course, there was the BRICS meeting, but all year there was a series of meetings in India where the G-20 countries came together. And the Modi administration seemed to go out of its way to put the, if you will, new India on display. Of course, we have the state visit of Prime Minister Modi here in the United States. We had the soft landing on the moon. We had Modi hosting the G-20 countries. We had a very high profile for him at BRICS. We have an election coming up in India. Is there a strategy here by the Modi administration? Are they taking this somewhere? Or is this driven by their domestic politics, this increased visibility? How do you analyze it?

JUSTER: Well, all of the above. (Laughs.) India and Prime Minister Modi are really putting on display their claim to leadership on the global stage. And they’ve done an extraordinary job, including some intensive marketing, to project and position India in the center of international affairs, and the notion that India’s time has come. If you recall, only about eighteen months ago India was being rather heavily criticized for not condemning Russia’s invasion of Ukraine, for purchasing more oil from Russia. And he might have felt they were a bit on their hind legs. And yet, they have come through this, and extraordinary diplomacy by the prime minister and Minister of External Affairs Jaishankar, to be staunch defenders of their national interest.

To position themselves as the voice of the Global South, and the interests of those countries as they were affected by the war in Ukraine in terms of food prices, fertilizer prices, energy prices. To position themselves, again, and reiterate the fact that they’re the world’s largest democracy. And that they’re the leader in this effort I mentioned earlier, to reform the world order. And all of this has led to, as you said, a really spectacular state visit to Washington.

But you’ve seen Prime Minister Modi being courted by America, by the U.K., by Israel, by France, by Japan, by Australia. And they’ve really positioned themselves to be not the country that didn’t condemn Russia, but the country that can maybe bring the parties together because it has good relations with all, and that they really, as I said earlier, want to be the bridge between the north and the south and the east and the west, while growing their economy, pursuing their national interests. And they’ve done this through, in the latest way, their presidency of the G-20 on that global stage, and trying to bring together a consensus, and putting India at the center of all of this.

And the last point I’d make is that, as you know, President Xi chose to not go to the G-20. The first time since he’s been president that he didn’t attend such a summit. People have read that to be a snub of Prime Minister Modi. But, ironically, it actually enhanced India’s centrality in terms of bringing all these countries together and being able to take credit for leading the process.

KNIGHT: Yes. I want to get Zoe and Esther’s comments on that, but I want to remind people that we’ll be taking their questions in a few minutes. So if you want to put them in the Q&A, that would be very much welcome.

But, Zoe or Esther, how are you looking at India and the G-20 meeting, as it relates to BRICS?

LIU: Personally, I followed India’s hosting of G-20. And I think it’s actually very much—it’s a success for India, and I think is also very important PR campaign for India. It’s really a big extravaganza. It’s India’s hospitality on full display. And I would agree with Ambassador Juster on the—Xi Jinping, by not being there, actually enhanced India’s centrality.

But I think, you know, I would have cautious—I would offer some alternative explanations in terms of why Xi Jinping is not there. You know, first of all, when he was at BRICS, there was—you know, people on social media have already witnessed that was this weird episode where he, for people—for unknown reasons, he was left alone as he was walking into the hallway to meet with the South African president. So he could be personally realizing that it’s a big international display of unpleasant, if you will.

And then this transitioning to the G-20, he realized that the G-20 actually has become a bloc where he is not unnecessarily welcomed. So perhaps there is a personal reason that he probably doesn’t want to go. And then there are also legitimate domestic reasons why he didn’t go, because the Chinese economy is facing a lot of problems and perhaps his priority is really about not unnecessarily doing—participating in an international forum where he’s not welcomed, and to try to deal with Chinese domestic issues.

BRIMMER: I would just flag that there are also some interesting opportunities for sustained topics. When you—some of the best multilateral diplomacy, I think, occurs when you think about key issues that you can develop in multiple fora and support. I mean, early plans on food security issues at times have started in the G-7 then gone into the General Assembly. I just note that, of course, you have not only India chairing the G-7 this year, you have Brazil next year, in 2024, and South Africa in 2025. And then the United States in 2026. And so you could actually imagine picking some topics where there are shared interests and developing them and sustaining them over time, both in the G-20, BRICS, and a variety of other things. But again, that’s playing in the web, and seeing those as all part of a larger diplomatic strategy.

KNIGHT: So I want to ask the whole panel about the human rights question. So it comes up in in one context in the BRICS meeting, where the host, South Africa, of course, has a long history in terms of promoting human rights. And its president went out of the way the week before the meeting at a summit in South Africa to restate that. While, at the same time, you have Russia as a member. You had the president recently ask about whether he raised the human rights issue in the G-20 meetings. And then you have the addition of new members in BRICS that have—I mean, for one, Iran, that have a record on human rights that is very troubling. Could we start with you, Esther, about how you view the human rights agenda and BRICS, and in general in the foreign policy dialogue right now?

BRIMMER: Thanks for the question. And indeed, yes, I do have very serious concerns about the way human rights issues have been handled at—both in these—in these bodies. Indeed, that we that we are seeing. Of course, first, the admission of states with horrendous human rights records, Saudi Arabia and Iran as two examples, into the BRICS. And so that you also think that that will dilute efforts to try to raise issues. But some of the members already there have thin human rights records. So there’s a real concern there. And I think that’s one of the reasons why one of the important roles the United States and others play is raising—continuing to raise human rights issues.

Now, our record is not perfect. (Laughs.) And we are often reminded of that. But I think there have been times when there has been interesting cooperation. So I will say a decade ago, when I was, let’s say, particularly working on international organizations, I made three trips to Brazil and trips to India, not just to Geneva and New York, because we were talking about how we would work on some of the LGBT issues in which Brazil, under Lula at that time, was actually quite supportive. And it’s important to—when you’re working on global human rights standards that you try to get other states to be supportive. And so there’s potential there.

But some of those relationships may have to be at the—on the bilateral building, because when you have significant human rights abusers in the same room they’re not going to be as s forward-thinking as well. But I think it’s important that we continue to integrate and we look for ways of integrating and reintegrating human rights issues into our multilateral diplomacy. And it’s challenging now. Very challenging.

I’ll just note, one other thing is that the other issue has been the condemnation, or lack thereof, of Russian invasion of Ukraine. I’ll note this is not a new issue, unfortunately. In 2014, I remember traveling to Brazil. I’d just left government in 2013. And directly in a public forum having a debate in Rio about how come you didn’t—you spoke up about the U.S. invasion of Iraq, which was wrong. Many of us said so at the time. But you need to do the same thing about Russia’s invasion of Crimea in 2014. Unfortunately, this is a long argument, and there’s still a lot of work to do.

JUSTER: Ed, let me just jump in and add on to the points that Esther made. It’s obviously very important in the statements to reiterate the basic principles about human rights and its importance. And I assume leaders discuss these issues privately as well. And certainly, we saw that one of the reasons why Putin may not have attended the summit in South Africa was South Africa is a member of the International Criminal Court, and would have been under an obligation to arrest Putin for his violations of basic human rights and other atrocities.

That said, we’re in a period of great flux in the international system, with shifting relationships and different countries trying to work with others to gain stability. And sometimes that means that human rights will not be the primary focus when you’re trying to see if China is bringing together Saudi Arabia and Iran. How does the U.S. get into that and enhance its relationship with Saudi Arabia, as we’re seeing now, and perhaps use that relationship to bring about some changes between Israel and the Palestinians, and to forget Israeli-Saudi Arabian alliance. We saw the president of Vietnam, which has been criticized for human rights issues, but that’s a critical country in the Indo-Pacific strategy.

And so it’s a very delicate balance for a diplomat, and especially in a period where there’s so much change going on and we’re trying to enhance our own network of relationships, to make human rights the only issue. It’s going to be one of several. And we have to figure out how to raise it diplomatically. We should always reiterate publicly the principles. But one of the points about the BRICS is when it was originated, some of its principles were that they were against the interference in the internal affairs of other countries. This is something that the U.S. does, and the countries in the BRICS don’t like that. And they want to resist that. Well, that relates to human rights.

And they’re also—another principle is they’ve sort of been all weather friends. Which is, despite what goes on they stick by each other, which is probably what you’ve seen with India and Russia. So you have clashing overall visions for how the world order should be organized. You have different emphasis on various principles. It’s a critical issue. And the challenge always is how to raise it, but not let it necessarily overshadow what may be other critical strategic objectives as well.

KNIGHT: Thank you, Ken.

Zoe.

LIU: Yeah, if I can quickly just to chime in here with regard to human right. I think, first of all, when BRICS first got together it’s really about economic concerns. And we have always been trying to focus on economic issues, despite that right now BRICS—with the expanded conversations—BRICS, in terms of the policy convergence, expanded tremendously. But I think country still try to prioritize economic issues, energy issues, industrial—the fourth industrialization and innovation. Human rights is not necessarily out there—within BRICS, is not on top of the list.

And if we look at the internal dynamics, I think China has—China has always been saying that, on the one hand, the United States have been exercising double standard. And then increasingly, you’ll also hear several Chinese scholars and policymakers single out India, saying that, well, you know, India does not necessarily have a spotless for human rights issue, but somehow United States turned a blind eye. So from that perspective, I think there—the human rights issue is a thorny issue. But perhaps is really not, especially when BRICS is a consensus-based group, is not necessarily on top of their list.

And then if we extend this to the context of G-20, here China’s voice is the same again. Kind of really wanting the G-20 to focus on economic issues rather than becoming a platform for everything chiming in. So that the focus has been diluted. So from that perspective, I agree with my colleagues here. But perhaps we—yes, we do have to focus on how to raise the issue diplomatically. But then at the same time, in order for countries to achieve—not just achieved consensus for lip service, but having consensus and making consensus enforceable, exercisable, perhaps we need some focus.

KNIGHT: Very good. Thank you, Zoe.

Alexis, I think now is the time to turn to questions from our audience.

OPERATOR: (Gives queuing instructions.)

We will take our first question from Hari Hariharan.

Q: Good morning. Thank you for a great panel.

I want to couch my question with a couple of observations. The first one is, I wonder whether there can really be an effective BRICS when the rupture between India and China is as serious as it is. In fact, BRICS reminds me now have a book called The Seven Sisters, which was written many decades ago, about the oil companies. Where the cover said that from the noises they make, you can’t tell whether making love or war. So that’s one observation on BRICS.

And the second comment I would make is that one important institution which was not mentioned in this call, the G-7. Because it would implicitly seem that very early in the Biden administration, with Jake Sullivan and Blinken stewarding policy, that once the Ukraine and Russia-related matters started to develop, G-7 became principally the primary platform for the U.S. for significant—and to almost eviscerating the importance of G-20, in my humble opinion.

And then finally, I want to ask a question of Ambassador Juster. And that is, I know this sounds outrageous, but is it within even remotely the art of the possible that the U.S. could extend NATO membership to India, to Korea, controversially even to Taiwan, and effectively neuter any chance of serious Chinese aggression? I know it sounds outrageous, but I just want to throw it out there. Thank you.

JUSTER: OK, if you’d like, Ed, I can take an initial crack at that.

KNIGHT: Please.

JUSTER: First of all, on your observation, you’re correct that there are rivals inside BRICS. It is not a coherent organization. You mentioned India and China. There’s also Saudi Arabia and Iran, perhaps Ethiopia and Egypt have some differences. And in a sense, the BRICS summit—and the BRICS is less of a coherent organization, in my opinion, than sort of a statement. A statement to the West that these lower- and middle-income countries, maybe some would call them swing countries—are not happy with the current international system. You see not just six countries that got into BRICS this time around, there are twenty, thirty more who are aspiring to be within BRICS. And that says that there’s discontent with how international institutions are currently organized. And the BRICS group may be able to form some coherence on that type of principle, the need to change the basic organization of the world order, and less so on some other principles where there are going to be sharp conflicts between some of the members.

Now, the G-7 certainly still is alive and functioning. And it can be very important in initiatives such as Russia’s invasion of Ukraine. But, as I said, it’s one of a number of organizations. And some might say that the G-20 can be more effective, because it includes a broader set of countries. And yet, at the same time, when you have to have consensus among so many countries with different points of views, you get a bit of a watered-down policy overall. And you have no secretariat or ongoing organization between G-20 meetings that keep that effective. And it’s hard to look back at previous communiques that have come out of the G-20 and, ask, well, what got implemented and what didn’t, because people sort of move on. And the next G-20 president doesn’t say, let me implement what the last one did. They say, what can we do now that puts our signature and imprint on the organization.

In terms of NATO, you know, India does not want to be in NATO. In fact, folks have started to, in some cases, look at the Quad as sort of an Asian NATO. And India’s been very careful to make sure that it does not get into military affairs. It has gotten into maritime domain awareness but, beyond that, it’s very clear that it is not a military organization. In fact, it was originally called the Quadrilateral Security Dialogue. And I still see journalists and others referring to that. But if you look at the Quad countries, every statement they put out is from the Quad. They never talk about it being a security dialogue, because that, they feel, would be counterproductive and actually create an opportunity for China to further denounce it. It already does.

So I think—you know, I believe Korea. Japan have had observer status at NATO meetings. I know Japan has. I think Korea may have. And they may—that may be a way of connecting sort of these European and Indochina organizations. But I don’t think that India especially is looking to make it into a security organization themselves. Again, they’re against alliances. They want to coordinate. They want to get enhanced technology to be able to build up their military capabilities. But they’re not looking for an alliance.

BRIMMER: Just a further point about organizations, just to flag that there’s so many different organizations, and that states choose the fora where they may be able to advance something that’s appropriate for that organization. So take a different organization, Organization for Economic Cooperation and Development, OECD. Now that brings together certain advanced economies, but it’s taken on roles on technology, because states realized that they wanted to—a way to begin to think about emerging technologies. And they’ve started to look at that. So we want to look at different groups. The other thing I would just flag as something that—you know, beyond the very precise world of the Council on Foreign Relations—that too often we see the misuse of the word “alliance.” And that is used with frequency. And there are actually very specific countries that are allies. And that has certain implications.

And so I think one of the things we do have say is that there are lots of other relationships other than alliances. And finally to say that—ultimately, about the important point about NATO is that it’s first and foremost a political alliance. The North Atlantic Treaty includes elements that countries need to be part of the underlying political values that are then defended by this military alliance. And so we have to remember, again, that alliances are a very special category and be careful when we’re talking the wider world to help people realize the difference between many different international organizations and actual alliance structures.

LIU: And I would just echo—yeah, I would just echo what Esther and Ambassador Juster mentioned in terms of alliance. And I would just say, BRICS itself and never considered itself—BRICS members never considered itself as an alliance. And members have always described it as a lose partnership. It’s consensus building. And, yes, there are some commentators who say that China in particular wanted BRICS to become a rival and a challenger to the G-7. But I think there is—there is an important subtlety there, in the sense that the role of China in terms—the role of China in the consensus building sometimes isn’t—is not always a positive.

Because, for example, China and India may not necessarily always agree on certain things. And at the same time, certain G-7 members used to support the Chinese initiatives, such as the Belt and Road Initiative, which India has never supported. But now, you know, like, the only G-7 member, Italy, decided to well, you know, this is the time to revisit our position for the Belt and Road Initiative. So I think China is in a very difficult—you know, a very delicate position, especially under the leadership of President Xi Jinping. And I think, perhaps, at different international forums, really, China’s strategy should have been focusing on how to restore its relationship with the West, while expanding is in relationship with the Global South. But I don’t think China has been doing—unnecessarily doing a good job in communicating its intentions.

KNIGHT: Thank you, Zoe.

Alexis, could we have our next question?

OPERATOR: We will take our next question as a written question from Abraham Mubvumbi of BlackRock: What is your take on the rapid expansion of China in Africa? It seems like the West is not keeping up with the pace of investments being made there by China. Is that a good thing? Or must Western countries also do more in terms of investments in the African continent, considering the potential growth there?

KNIGHT: Zoe, do you want to start us off?

LIU: Sure. I can take the first crack on that. I wanted to take a step back by saying that China’s investment, or engagement, or aid, or economic statecraft within Africa is not a reason—is not a reasoned thing. Because after the 1955 Bandung Conference, Chinese diplomat and Premier Zho Enlai, at that time, visited several African countries. And starting from there, China started its aid to Africa by—in terms of infrastructure, building the Tanzania-Zambia Railway, dispatching medical teams, and all sorts of things like that. And remember, at that time China was one of the poorest countries in the world. In other word, China’s engagement with Africa does not, or hadn’t started, because a China is a rich country. In fact, it’s despite when China was poor.

So from that perspective, I think it’s important to take a longer historical horizon viewpoint and realizing that China has emphasized or realized the importance of its support of all the support—all the countries in the African continent. And then, fast forward in the context of China’s enhanced the engagement with Africa, it also did another just start from Belt and Road Initiative. Back as early as in the 2000s, as the as China’s foreign exchange reserves starting to accumulate, in the context of diversifying reserve management, many Chinese scholars as well as the state-owned enterprise senior leadership, they proposed an idea saying that why don’t we use the foreign exchange reserves to invest in overseas strategic minerals and—critical minerals and strategic assets?

So it was in that particular context that we started to observe China’s overseas expansion, in particular in the context of Africa. However, in the—when we think about the kind of contract negotiation, a lot of these started with—because of—China’s role has been making these unbankable projects into bankable project. And a very important role been has been played—has been played by this institution called Sinosure in terms of the government guarantees. So I think that is actually quite important. And China is not the only country doing it. Japan has been doing a lot in that context as well. So I think we cannot just focus on China’s influence in the region, but recognize that several American allies and partners have actually been expanding in Africa as well.

KNIGHT: And I’ve read also that India, and its—some of the large economic entities there—are engaged in ports and other investments outside of India.

JUSTER: Yeah, China, as I mentioned, has been very strategic in its relations with other countries. And it has expanded its role in Africa and Latin America, in part driven by its desire to get access to critical resources. And the United States, quite frankly—and then I’ll get to India a second—after the Cold War has sort of pulled back in some areas for budgetary reasons, and just neglect. And I think they’ve realized now—we’ve realized, the world has realized—that we need to provide more attention to, as I said, these lower- and middle-income countries of the Global South.

You saw at the G-20 India actually—one of their major efforts was to make the head of the African Union a permanent member of the G-20. And that was successful, but it called attention to the fact that the world needs to give greater attention. India is currently doing that. India has had an initiative with Japan to help develop parts of Africa. And the United States recognizes that they need to start devoting more attention to it. This does not only mean, by the way, economic resources and assistance, vaccines support. It also means showing up, attending meetings, being present, and making the people of this region feel that you care.

I think one of the unfortunate effects of COVID was that countries in Africa and other parts of the developing world came away feeling that the West, in particular, didn’t care—didn’t devote enough effort to provide medical assistance. And I think this is something that we’re all trying to address and fix. India did proudly reach out and provide vaccine assistance and has made a major part of their effort to say that we’re going to enhance our relationship with these countries.

KNIGHT: Esther.

BRIMMER: I would just also echo what Ken’s also commented on, which is it’s showing up. That actually it’s important that the United States is both visible in African institutions. The United States, of course, also helps support the African Union, as it does the European Union. But I think continued work in that area is important. China, of course, helped build the African Union headquarters, you know. So there’s some things that we see different entities vying there. But indeed, the sustained interest—and I think looking at other areas.

I’ll say that adding on one of the areas might be in international education. I spent some time over the years looking at that, looking at the flow of students, and thinking about the long-term investment made in bringing students to the United States from multiple countries. India being a good example. That thinking about these other ways of engaging with African countries, I think, is extremely important, and recognizing that they have their own interests, but that they—the United States can work cooperatively with them on those interests.

KNIGHT: Thank you, Esther.

Alexis, I think we have time for another question.

OPERATOR: We will take our next question from Raghav Rao.

Q: OK. Thank you for an insightful discussion.

With the relative success of, you know, BRICS, G-20, and the Quad, compared to United Nations, is United Nations still relevant? And my second part of the question is, with India’s growing prominence on the international stage, is India pursuing the permanent membership of Security Council? And would that materialize?

JUSTER: Well, because you directed a lot of it to India, let me take a first crack. The U.N. is still around. It still is the most prestigious of all of these international organizations. Those of us living in New York can tell you by the traffic that surrounds the U.N. General Assembly every year, that it’s still a heavily attended event. And countries like India and others are seeking reform of the U.N. Security Council so that they can have a permanent seat on it. And that’s still very much a part of India’s overall effort. It did so when it was on the Security Council as a temporary member. It pushed that. If you look at the most recent U.S.-India joint statements, that’s in there repeatedly.

And other countries want to work on that. And that may be one of the issues that the BRICS countries will want to work on, is reform of the U.N. So obviously because the U.N. has been less functional, because of some of the divisions from world affairs. We’ve seen what’s called minilateralism, and these other organizations being utilized for specific purposes. But that doesn’t mean that these countries have given up on wanting to have their own bigger voice and seat in the U.N. Now, as I said, it’s less clear that China ultimately has a vision for the world order that may be similar to what’s out there. But India certainly wants to reform the organizations, rather than to demolish them or to ignore them.

KNIGHT: Thank you, Ken.

Esther, you’ve written on this topic of the U.N.

BRIMMER: Indeed. Indeed. So, first off, I’ll say, yes, that the United Nations system still is fundamentally important. It remains the global body. And there are multiple issues where you have to deal with all 193 member states. That includes some of the nuclear nonproliferation issues. And that includes the Security Council. And indeed, the article seven rights of the Security Council to create both peacekeeping operations, but that still is the place where you talk about fundamental—certain fundamental security issues. And that the United Nations—also you need the global body to be able to set certain standards. Everything from, you know, civil aviation to telecommunications, all need global standards.

But I would flag in particular, that there’s talk about reform of the international system. And people often then turn to the Security Council. Interestingly enough, remember, the United States is a supporter of the expansion Security Council. The United States would benefit from basically any of the countries that would likely to be included if this were to happen, including India, Japan, Germany, Brazil. You know, they are all countries with which the United States can work closely in the security environment, and they are frequent members of the—nonpermanent members of the Security Council, and they work well.

The countries that are concerned about enlargement, they won’t say it, but look at it. China and Russia, are they really interested in the arrival of Japan or others on the Security Council? I think that the politics are maybe not as they are often portrayed in the media, that for the United States and others to have the expansion of other responsible countries that want to be part of the global security system would actually be beneficial. So but I don’t think it’s going to happen anytime soon. But we have to be clear about what that politics actually are.

KNIGHT: Thank you, Esther.

Zoe.

LIU: Yeah. I would just put a footnote there in terms of U.N.’s relevance. I think right now, as the global economy is moving towards—or struggling to move towards a sustainable future, I think the U.N. definitely plays a very important role in building consensus, or at least setting the goal. And I think the role of U.N. in terms of setting or getting all countries to agree on the Sustainable Development Goals, or the UNSDG, although, you know, critics might say that it’s quite a difficult or even impossible to achieve by 2030. But I think it’s always good to shoot for the moon. Even if you don’t get to the moon, you can achieve the stars. So from that perspective, I think the U.N. is very important in building a consensus to move towards a sustainable future.

KNIGHT: Well, thank you very much. We’re at the top of the hour and we’ll come to a close. But I first want to, again, thank our distinguished guests and speakers today, and members of this panel—Ken Juster, Zoe Liu, and Esther Brimmer. And thank the staff, Alexis, Laura, Isabelle, and Jamie for supporting us, and the Council for organizing this event today. I know I learned a lot today, and I appreciate everyone’s participation. Thank you.

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