One of the world’s most important geopolitical meetings has just ended. And, as to be expected, sanctions regarding the Russo-Ukrainian War were addressed right at the opening. In his speech one of the world’s most powerful men, representing a country with a staggering annual GDP of nearly twenty trillion, made an unambiguous statement about the unprecedented sanctions against Russia.
President Xi Jinping kicked off the virtual BRICS meeting on 22 June 2022 with: “The crisis in Ukraine has again sounded an alarm bell to the world ... Those using their leading position in the international financial and monetary system to impose sanctions recklessly will only end up harming others and themselves and make people across the world suffer.”
If the above wasn’t clear enough, he also stated that sanctions “politicise, instrumentalise and weaponise the world economy”.
The other members of BRICS share China’s view. To state the obvious, Russia isn’t in favour of the sanctions. Neither are India, Brazil and South Africa. And this isn’t rhetoric either; a massive shift in global trade is occurring.
In a meeting from 15 to 18 June 2022, Russian and Chinese companies signed a raft of trade deals covering natural gas, food and other commodities. These deals come only a couple of days after the opening of a new bridge, costing $342 million, between the two countries. Since the start of its illegitimate invasion, Russia has displaced Saudi Arabia as China’s biggest supplier of oil, and its exports of natural gas to the country have jumped by 54%.
Since Russia has been kicked out of the SWIFT banking system, two countries are using a Chinese alternative, the Cross-Border Interbank Payment System. Yuan-ruble trading has jumped 1 067% since the invasion. This is a major step towards breaking the dollar’s domination of global trade.
Last year India imported 60 000 barrels of oil from Russia and this year 740 000, and Russia is now set to become the country’s number one source. Private refineries in India are then turning the discounted oil into petrol and diesel and selling it all across the world, including Europe. Plans are also afoot for Indian retail stores to open up in Russia, slotting into the gap left by the departures of Western companies.
Brazil isn’t fazed by the war either. Russia is its number one supplier of fertiliser at 3,06 million tons, and the two countries recently negotiated to make sure Russian fertilisers keep on coming. On 28 June 2022, Putin and Brazil’s president, Jair Bolsonaro, had what seems to be a rather amicable chat on the matter.
Moreover, Argentina and heavily sanctioned Iran have now applied to become part of BRICS and would add to the BRICS countries’ substantial share of the global economy: They represent approximately 41% of the world’s population, 24% of the global economy and 16% of the world’s trade. At the BRICS summit President Putin said that Russia’s trade with other BRICS increased in the first quarter of this year by 38% and reached $45 billion.
The Economist reported in May that Russia’s export earnings were 65% higher in the first three months of 2022 than in the first quarter of 2021 and, due to sanctions, its imports were down 20%. It now has a trade surplus four times higher than last year. Putin now has plenty of cash to fund his invasion, which Western sanctions have completely failed to halt. Moreover, the Russians are advancing in the Donbas and the Ukrainians are in retreat.
What, one might be tempted to ask at this juncture, are South Africa’s intentions in bypassing or ignoring Western sanctions? Well, if there is a plan of any sort, no one has seen it. Literally. There’s only so much you can do by candlelight.
On the opposite side of the planet the G7 – Canada, France, Germany, Italy, Japan, the UK and the USA – held a meeting this week in Germany. Given the scale and diversity of their sanctions, the best the G7 could do was ban the sale of Russian gold. This was a symbolic move, as the trade was effectively banned by the pre-existing financial sanctions. Most of Russia’s gold went to the United Kingdom, which is a global trading hub for the precious metal. It hardly takes great insight to imagine Russia cutting a direct deal with India to feed its insatiable appetite for gold.
Not only did the G7 reiterate its support for Ukraine until the bitter end, it also took exception to China. The G7 communiqué stated that China must force Russia to withdraw its troops from Ukraine. The UK’s foreign secretary, Liz Truss, has gone a step further. She said, “I want the G7 to act as an economic NATO not just the challenge of Russia but also the challenge of China.”
While peace should be the goal, I’m pretty sure that China isn’t going to listen to the Brits or any of the G7 countries. The Opium Wars, the century of humiliation, the rape of Nanking, Hong Kong and all of that.
Putin’s war of conquest and the subsequent sanctions have had the unfortunate and unintended consequence of dividing the world into rival blocs, eerily reminiscent of the Cold War. Major powers and groupings are sliding into a “we vs them” mentality in a zero-sum game. Absolutely fantastic. Africa’s 20th-century history shows the true cost of the world’s powerful countries locked into a struggle for dominance, economic or otherwise. Raped women, dead children, the hungry and starving in a series of proxy wars in the name of other people’s ideals.
Tristen Taylor is a freelance journalist and photographer. He is also a Research Fellow in Environmental Ethics at Stellenbosch University.