“What is happening economically in the country is crazy. We now have 140% inflation. Daily prices are increasing. My lunch costs differently every day,” the foundation’s director, Konrad Adenauer, told DW. Argentina, Susanne Cass. It is not news to say that the South American country is in dire economic straits.
In this case, the news that sparked heated debate in the country: Argentina will join the BRICS group of emerging economies in January 2024 Made up of Brazil, Russia, India, China and South Africa.
Many describe this as a “historic” step and see Argentina as “the leading player on the world chess board”. In the supporting argument, the same statistics are repeated like a mantra: this group represents more than 40% of the world’s population, 30% of the planet’s territory, 23% of GDP and 18% of global trade.
But the fact that 99.44% of the world’s population is represented in the UN does not exactly give it an exceptional advantage on the world chessboard. And the economic data is not so promising. A group of BrixIt is not a free trade market like Mercosur or the European Union. Apart from this, for Argentina, BRICS members China and Brazil are already the most important trading partners.
At the moment, the BRICS is a very loose association: no general secretariat, no headquarters, no clearly defined rules. Even the current five members do not always agree. For example, China and India have a border dispute. So, what are the benefits of the BRICS system?
“For Argentina, BRICS accession opens up new opportunities. After all, the country has suffered greatly under the restrictions of international organizations dominated by the United States. Argentina now has alternatives, and I think this is a positive development,” he said in an interview with DW sinologist Benjamin Creutzfeldt, author of the book. China in Latin America: Reflections on Transpacific Relations and researcher at the University of Leipzig.
However, Goss underlines Chinese interests in BRICS expansion. “At this point, the entry of Argentina and other countries has to do above all Geopolitics. China wants to make clear that its strained relationship with the West can be offset by stronger ties with the rest of the world’s emerging economies.”
The opposition rejected Argentina’s entry into the BRICS system
Argentina’s opposition’s two main presidential candidates for October’s election, the ultra-liberal populist Javier Milei and the right-wing Patricia Bullrich, on Thursday ruled out the South American country’s entry into the BRICS bloc. “It is surprising that such a decision has been taken two months before the election and therefore before the change of regime. It has created a huge uproar not only among the opposition parties but also among the business community,” explains Kass.
New opportunities or new dependencies for Buenos Aires?
A key advantage offered by BRICS is the possibility of borrowing from the New Development Bank (NBD) based in the Chinese city of Shanghai. With this, Argentina receives a valuable alternative to credits from the Washington-based International Monetary Fund (IMF).
He Exchange The exchange with China, in particular, is sparking euphoric enthusiasm in the Argentine government. “We should call ourselves Argentina,” Economy Minister Sergio Massa said during a visit to China two months ago, renewing the agreement. Exchange.
He Exchange It is a currency swap in which two countries exchange an amount in their respective currencies for a specified period of time. Argentina thus avoids paying for imports in dollars and instead pays directly in Chinese yuan.
“A ‘currency swap with China’ gives Argentina breathing room in the short term, but it is not a solution to the real causes of economic distress: inflation and high public debt,” says Gass. Buenos Aires is trying to free itself from its dependence on the United States by increasing its dependence on another country.
What does Argentina’s entry mean for the rest of Latin America?
Argentina’s entry into the BRICS system will not have a major impact on other Latin American countries, both experts agree. Brazil is the decisive factor in this matter, not Argentina. “For Brazil, Argentina is an important trading partner and also a political partner in Mercosur,” says Gauss. For his part, Creutzfeldt underscores another point: Argentina is not too keen on giving up its distinction as the only Spanish-speaking country in the BRICS so quickly. Also, competition will be very high in Latin American countries.
Instead of lecturing, the West should cooperate
How should the West react to the merger? Käss is practical. According to him, the West criticized China and Russia’s vaccine diplomacy during the pandemic, but the fact that it provided sufficient numbers of vaccines did not sit well with the countries of the Global South. It’s an unforgettable one. “The West should avoid condemnation and instead try to make concrete offers of cooperation,” he says. Rapid ratification of Free Trade Agreement by EU-MercosurFor example, he insists that one of those measures would be (RR)
