PERSPECTIVE: Sanctions beef up Russia's BRICS ties

By bne IntelliNews September 22, 2014

Graham Stack in Berlin -


Western-Russian mutual sanctions prompted by the Ukraine crisis has strengthened Moscow's partnerships with individual members of the BRICS group of emerging markets, and is adding to the BRICS political cohesion globally.

Russia has a unique role among BRICS – an acronym for the group of major emerging markets comprising Brazil, Russia, India, China and South Africa that has also become a formal political group with annual summits: Russia does not just share market characteristics with other BRICS nations, but has developed close strategic partnerships with other members, particularly India and China, say experts.

Now, as a side effect of mutual sanctions between Russia and the West, a another strategic partnership with a third member of the BRICS, Brazil, is taking off: Brazil is fast becoming Russia's strategic ally in food security as a result of a Russian ban on imports of Western agricultural produce.

Russia seems to have planned its sanctions on EU and US food imports well in advance of their announcement on August 6. Since 2011, Russian regulators have had restrictions on Brazilian meat exports to Russia due to disputed production methods, but lifted these restrictions in early May, rapidly certifying scores of Brazilian producers for export to Russia, according to Brazilian media.

These moves caused overall Brazilian exports to Russia to surge from $200m-280m per month in January through May, to $430m in June, increasing to $500m in July, according to trade statistics, as Russia apparently stocked up in advance of sanctions. Alone, beef purchases by Russia more than doubled in July on year from $85m in 2013 to $181m in July, and stayed high at $147.2m in August. This has made Russia the world's largest consumer of Brazilian beef and pork, at the same time confirming Brazil's status at the top of the world rankings of exporters. “Thanks to this, Brazil has consolidated its position as the leading provider of beef to the world,” says Antonio Jorge Camardelli, president of ABIEC, Brazil's association of beef exporters.

The EU apparently did not welcome this development. "We will be talking to the countries that would be potentially replacing our exports to indicate that we would expect them not to profit unfairly from the current situation," a senior EU official told the Financial Times on August 12. But Brazil's ambassador to Russia, Antonio Guerreiro, on August 21 denied any approach had been made. “Even if such attempt is made, the result will be nil. The Brazilian government never meddles with the operations of our businessmen," he said.

Cementing the BRICS

According to Brazilian BRICS expert at the University of Birmingham, Marco Vieira, Russia's enhanced Brazil partnership as a result of sanctions adds to what he calls “Russia's particular position within the BRICS”: it's the only BRICS member that has a strong bilateral relationship with each of its fellow BRICS, except South Africa. Russia's fledgling partnership with Brazil follows strategic partnerships forged with China in energy, and India in defence and nuclear power – both of which have also been strengthened by Russia's falling out with the West over its aggression in Ukraine.

Russia's strategic energy partnership with China was launched in February 2009 with a $25bn deal to build pipelines and supply oil from Siberia to China. The partnership was taken to a new level in May, at the height of tension with the West over Russia's annexation of Crimea two months earlier: Russia and China signed history's largest ever gas deal on May 20 after years of negotiations, envisaging massive gas pipelines to ship bring Siberian gas to the energy-hungry Chinese market, with the deal valued at $400bn.

A joint Russian-Chinese statement at the time added political context to the tie-up, which was seen as reducing Russian dependency on Western energy markets. “The sides noted the need to respect historical heritage of countries, their cultural traditions and independently chosen public and political system, the system of values and ways of development; counteract interference in domestic affairs of other countries, give up the language of unilateral sanctions, organize aid, fund or encourage activity aimed at changing a constitutional system of a foreign country or its involvement in any multipartite association or union,” the Russia-China document intoned. The statement clearly referenced Russian allegations of Western involvement in the ousting of Ukraine's former president Victor Yanukovych in February.

Russia's strategic relationship with India encompasses defence and nuclear power – areas where Russia is a world leader and India has huge demand. “Russia is our leading partner in military-technical cooperation… for instance it is the only country with which India has an inter-governmental commission headed by the defense ministers,” India's ambassador to Russia, P. S. Raghavan, said in an interview on September 4.

Partly as a result of a perceived military threat to Russia from the US and its allies, partly as desire to lord it over smaller neighbours, Putin announced in September enormous funding to develop new weapons systems, with $500bn being spent in 2011-2020 on rearming with new technologies, likely as a side effect to deepen the defence partnership with India.

From acronym to alliance?

Ironically, given that analysts regularly call for Russia to be excluded from the BRICS concept due to slowing growth rates, Russia is the driving force behind developing the BRICS from an acronym into an alliance, having pioneered the first summit in Russia's Yekaterinburg in June 2009. The Ukraine crisis, while strengthening Russia's strategic links with Brazil, India and China, has also shown growing loyalty to Russia by the BRICS. “The current anti-Western political agenda of the BRICS has indeed provided the group with a strong identity and raison d'etre beyond its initial artificial definition as a loose group of disparate yet rising economic powers,” says Vieira.

Notably, in response to moves initiated by Australia to have Russia expelled from the G20 group of countries after the annexation of the Crimea, the BRICS' foreign ministers released a joint statement critical of the “escalation of hostile language, sanctions and counter-sanctions, and force does not contribute to a sustainable and peaceful solution, according to international law.” China, Brazil, India and South Africa abstained from a voting on a UN General Assembly resolution criticizing the Crimea referendum.

Russia is also strengthening geopolitical coordination with two of the BRICS, China and India, which together with Russia dominate the Eurasian landmass. Russia already partners China in the security organisation Shanghai Cooperation Organisation (SCO). India only has observer status but is applying for full membership, with strong backing from Russia.

The SCO's focus remains on security across Central Asia, but the prospect of Indian membership of the SCO may be a step towards creating what Veira calls “another front of emerging powers attempt to counterbalance the West,” with the SCO becoming in geopolitical terms – expanse of territory across the Eurasian global 'heartland' – what the BRICS are in terms of growing global market share. However, here the going may get trickier, since the three rising Eurasian powers are not only potential allies vis-a-vis the West, but potential mutual rivals. “The strength of in-group loyalty is still to be tested… concerning BRICS members who share borders - Russia, China, India - and have regional leadership aspirations,” says Vieira.

“Russia’s support [for Indian accession to the SCO] is very natural – they embrace a bigger membership in this framework, the more the merrier, because there is a better chance to enhance stronger like-minded partnerships in their quest to create a more feasible organization for the 21st century,” believes Alica Kizeková of Prague's Metropolitan University. “Russia’s leadership believes that existing Western multilateral constructs are archaic and unable to tackle the current threats and challenges in the region.”

Russia's alliance-building efforts will take another step forward in July 2015, when Russia will play host to the first joint summit of the BRICS and SCO in Ufa, the capital of the Russian constituent republic of Bashkiria – where the accession of India and Pakistan to the organisation, will likely be at least accelerated, if not then celebrated.


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