Krystian Kamiński: Argentina refuses BRICS

Some 40 another countries have already expressed interest in accession for a reason. Global South countries are seeking fresh options for economical cooperation and backing sources without typical Western conditions. They hope to reduce their dependence and influence of Western partners. It is not amazing due to the fact that many developing countries have had painful experiences with restrictive IMF austerity measures and the harsh requirements of the planet Bank.

In particular, the inclusion of 2 arabian countries contributes to the global emergence in the importance of BRICS. Saudi Arabia as early as 2022 was the group's largest trading partner in the mediate East, with a turnover of over $160 billion. Riyadh hopes to strengthen economical relations with China and India within BRICS and gain access to further markets in Russia and Brazil. The profitable interests are besides foreseen by the United arabian Emirates and are ready for further de-dollarisation. In July, they agreed with India that they would conduct business in their currencies. A period later, Indian Oil Corp. made its first deal with Abu Dhabi National Oil Company in Indian rupees. As early as March, the Emirates sold any 65,000 tons of liquid gas to China and received Chinese yuan instead. Saudi Arabia besides shifts to non-dollar currencies erstwhile selling its fossil fuels. A fresh agreement has been reached between the People's Bank of China and the Saudi central bank to name 50 billion yuan ($6.93 billion) for 26 billion Saudi Rials. The 2 arabian countries are surely not precursors to the dollar waiver. Finally, they sale their oil and gas worldwide and are dependent on an global marketplace that sets prices in dollars. However, they respond pragmatically erstwhile they are promised advanced profits.

However, six countries were to join BRICS but Argentina withdrew at the last minute...

Javier Milei went to the election with a extremist agenda and, as it turns out, immediately began its implementation. This is not only about a extremist agenda on socio-economic issues, but besides about abroad policy. The September BRICS summit besides established the inclusion of Argentina. Then the libertarian applying for the president's position then announced, with the right language, that after the eventual takeover of power, he would retreat the South American country from this format. Like he said, that's what he did.

Four months ago I wrote that of all the fresh members of BRICS Argentina is the most problematic acquisition. Unpolitically stable, respective "changes in regimes" have already occurred over the last century, and during this period it was incapable to stabilise its economy. Since the dawn of a mostly peripheral natural material economy, initially serving mainly Britain, theoretically inactive a 100 decades ago wealthy, per capita GDP was akin to developed European countries. In practice, the country had a crucial wealth gap which affected Argentina's past with attempts to reduce it by Juan Domingo Peron. However, neither his corporate-social attempts nor subsequent attempts (neo)liberalizations first made during the 1976-1983 military dictatorship provided for a simplification in debt, inflation, pauperization of large numbers of the population (40 percent of Argentines presently live below the poorness threshold). However, the completion of the disaster was complemented by reforms which were managed by the global Monetary Fund and implemented in the decade of the 1990s by then president Carlos Menem. The decrease in inflation took place at the expense of freezing the economy, advanced unemployment, resulting in pauperisation.

Argentina is an example of how peripherality, despite resources, periodic economical growth, or a favourable trade balance and an influx of capital, makes the economy susceptible to external stimuli and deconituncies. Argentina has not overcome its peripheral position.

Milei as a liberal radical, he besides ideologically approached abroad policy. As he said on the BRICS issue, "he will not do business with communists", referring to the fact that by far the top function in the group (approximately 70% of GDP) is played by China. The People's Republic of China is not communist in the sense of Karl Marx, or even Mao Zedong, but for Miley communists are even countries with a much smaller function of the state in the economy.

Milei wants to undo the clock's clues, but Argentina is no longer just the periphery of Western economies. In 2022, 14 percent of Argentine exports were in Brazil, 9% in China, 7% in the US, almost 6% in Chile, 5% in India. In turn, 21% of Argentine imports accounted for China, 19% for Brazil, 12% for the US and only 3% for Germany.

The predecessors of Milei tried to prosecute a more multi-vector abroad policy, due to the fact that this was the structure of the Argentine economy inactive during the globalization period. The fresh president besides questions the membership of Mercosur, the confederate Common Market, which connects Argentina with Brazil, Paraguay and Uruguay (Venezuela is suspended in it) and to a lesser degree deregulation, with Colombia, Ecuador, Bolivia and Peru. It besides questions the very existence of the central bank of Argentina and the national currency it wants to replace with a dollar. For now only pesos have been devalued by 50%. Milei now announces a run for mass privatisation, but first wants to gain extraordinary powers under a circumstantial "extraordinary state" in the economy she intends to establish. If it succeeds, the privatisation form will most likely besides reflect the direction of the global engagement of the fresh president of Argentina.

When Jair Bolsonaro took power in Brazil in 2019, he besides announced a extremist reorientation of his country's global engagement towards cooperation with the United States and their allies. In practice, small came of it, and after Joe Biden took over power in Washington, the US distanced themselves from the “tropical Trump” for ideological reasons. I get the impression that Milei has applied an equally ideological measurement to abroad policy, taking the other path, to a powerful neighbour, Brazil.