The world is facing a debt crisis. Global debt to GDP ratio has risen to 336%. In 2022, 25 nations had to pay out one-fifth of their total income to debt servicing. 39 countries, a quarter of the world’s population, live under crushing US sanctions. Food and fuel prices soar whilst 735 million people suffer from chronic hunger. Everywhere new state alliances are being created and old coalitions are fragmenting under the pressure. Countries on all continents are jostling to protect their interests, reflecting growing inter-imperialist rivalries, battling for the world and its resources to be redivided.
New trade blocs are forming around the alliance between China and Russia. In August, South Africa hosted the 15th BRICS (Brazil, Russia, India, China, South Africa) summit. BRICS is consolidating itself as a capitalist trade bloc to challenge US hegemony, specifically excluding traditional imperialist powers. Of the 27 countries that registered their interest in joining BRICS, Argentina, Ethiopia, Egypt, Iran, Saudi Arabia and the United Arab Emirates were invited to become members from 1 January 2024. French President Macron’s request to attend the summit was firmly rebuffed. Though Argentina is unlikely to join if right-wing candidate Javier Milei wins October’s presidential elections, this expanded alliance will account for 47% of the global population. With the incorporation of three Gulf oil giants and a strong overlap with the OPEC+ alliance of oil producers, ‘BRICS+’ will account for 39% of global oil exports, 46% of proven reserves and 48% of all oil produced globally. These nations share hardly any common ground other than a current view that their needs will be better served by challenging the dominance of the US dollar. As the Indian diplomat Shivshankar Menon wrote in Foreign Affairs earlier this year, ‘Alienated and resentful, many developing countries see the war in Ukraine and the West’s rivalry with China as distracting from urgent issues such as debt, climate change and the effects of the pandemic.’
Sections of the left celebrate BRICS+ as a new anti-imperialist bloc. However, despite providing a challenge to US, British and EU imperialism, BRICS+ is fraught with contradictions as its component powers seek to assert their regional interests, searching for new markets and partners. Nonetheless, for countries such as socialist Cuba, subjected to over six decades of US blockade and aggression, it provides a crucial breathing space. Unsurprisingly, Cuba, alongside its regional anti-imperialist allies Venezuela and Bolivia, have formally applied to join in the coming years.
Though a proposal to create a digital trading currency did not materialise, BRICS+ pledged to accelerate trade in their own currencies, aiming to reduce their dependence on the dollar. Ironically, US sanctions have driven this process forward. The ongoing trade war with China, the freezing of Russian central bank assets and the locking-out of Russia and Iran from the SWIFT system of international payments have forced their closer collaboration. Proposed BRICS+ member Argentina has engaged in currency swaps with China and recently repaid some of its IMF loan in renminbi (RMB). BRICS+ also demanded the reform of the World Bank and International Monetary Foundation, and the UN Security Council, a call repeated at the G20 summit in New Delhi and at the G77+China summit in Havana. Western imperialism’s control of these global economic and political structures is under attack from all quarters.
However, BRICS+ alliances are already being tested. The admission of Gulf monarchies Saudi Arabia, the world’s largest oil exporter, and its ally the UAE into BRICS+ and the Eurasian Shanghai Cooperation Organisation has only been possible due to China’s brokering of a ‘peace deal’ between Saudi Arabia and long-time rival Iran. This could threaten US control of global oil reserves and the ‘petrodollar’ system which since 1974 has seen Saudi Arabia sell oil exclusively in dollars, further securing dollar dominance. Saudi is mulling the use of multiple currencies after the UAE conducted its first oil sales in RMB. Nevertheless Saudi maintains it is ‘building bridges with everyone’ and continues to depend on the US for military security and weaponry.
India is positioning itself as a rival to China. On track to become the third largest economy, India has refused to join China’s Belt and Road Initiative and is engaged in a sporadic border war with China over the disputed regions of mineral-rich Arunachal Pradesh, and Himalayan vantage point Aksai Chin and its trade connections with Central Asia. India is a member of ‘the Quad’ security group with the US, Australia and Japan. The US overtook China as India’s top trading partner in 2022. Nonetheless, India has flouted the US-led ban on Russian oil, becoming Russia’s biggest importer in the wake of the Ukraine war, benefiting from the discounted prices and selling some of it on to Europe.
Such contradictions will sharpen in the scramble to create new trade routes; the International North South Transportation Corridor seeks to connect Russia, Azerbaijan, Iran and India through ship, rail and road, reducing transit distance by 40% compared to the Suez Canal route. The corridor is already partially in use. A competing India-Middle East-Europe Economic Corridor was announced at the G20 linking India, the UAE, Jordan, Israel and Saudi Arabia to markets in Europe, a project backed by the US and EU. India is hedging its bets, aiming to develop Iran’s Chabahar port to compete with the Gwadar port and pipeline project central to the China-Pakistan economic corridor. Added to these tensions, China’s economy has slowed, youth unemployment is 21%, foreign direct investment hit a 26-year low and foreign investors sold off $12bn of Chinese stocks in September.
Amidst these changing global currents, even alliances within the US-European imperialist bloc are wavering. With Britain having decidedly sided with the US after Brexit, Foreign Secretary James Cleverly expresses fears of sections of the British ruling class, opining ‘the geopolitical centre of gravity is moving south and east. We cannot hang on to the comfort blanket of our pre-existing friends and alliances’. In the same breath he argued for strengthening AUKUS (the Australia-UK-US military alliance), delivering nuclear submarines to Australia and increasing defence spending by £5bn.
In this shifting geo-political landscape, pledges of ‘multipolar’ peace and co-operation will be eclipsed by the drive towards violent conflicts between the main parties, as already witnessed between NATO and Russia, and the US threats against China. British imperialism is preparing for conflict on all sides; as communists determined to fight against imperialist war-mongering, so must we.
Sam McGill
FIGHT RACISM! FIGHT IMPERIALISM! 296 October/November 2023
