How the West Was Lost
How the West Was Lost
The world’s biggest developing countries no longer consider the U.S. and Europe their exemplar
By Kenneth Rapoza
It wasn’t all that long ago when the U.S. would tell a poor Latin American nation to jump, and the response would be, “how high?” Those days are gone. They are never coming back, and it is unclear if Washington knows it—or understands why the trend has accelerated post-COVID.
Take an example from earlier this year: In February, fresh off his victory against Jair Bolsonaro and just a year out of prison for his role in the so-called Car Wash scandal involving state oil giant Petrobras, Brazilian President Luiz Inácio Lula da Silva returned to Capitol Hill. This is Lula’s third go-round as president, and he’s met President Biden before. But Lula knows Vladimir Putin at least as well, if not better, than he knows Biden. As a leader of a BRICS nation—which refers to the countries of Brazil, Russia, India, China and South Africa—Lula has been meeting with Putin since the acronym was coined by Goldman Sachs economist Jim O’Neill over 20 years ago.
During his February visit to Washington, Biden asked Lula to send ammunition to Ukraine to aid their fight against Russia. Lula told Biden to pound sand. “I’m not interested in prolonging the war,” Lula said. “I’m interested in ending it.” Lula’s views were given a spotlight by the Financial Times and The New York Times, two of the main establishment messengers. The message: Lula spews “Russian propaganda,” the White House said. He partially blames Ukraine for the war. Then, Lula went to China in April to talk to his other BRICS friend, Xi Jinping, where the two talked about China mediating a peace deal between Kyiv and Moscow.
Lula’s like the honey badger. He doesn’t care what Washington thinks—or what London and Brussels think, for that matter. Those countries don’t need to be placated or respected: They can be ignored now. And this is how the West was lost.
At a Crossroads
Everyone in the emerging world wants the Ukraine war to end. India and Saudi Arabia’s leaders support Lula’s idea of a group of developing countries mediating. Mexico President Andrés Manuel López Obrador has said Mexico will remain neutral, and that the country is against prolonging the war. Despite requests from the U.S. and Germany, Mexico is not sending armaments to Ukraine.
Volodymyr Zelenskyy is catching on. In late May, Reuters reported that Ukraine’s Foreign Minister Dmytro Kuleba reached out to South Africa and other developing countries to mediate peace under the guise that only they can talk sense to Putin.
Kyiv is right to think so. There is no chance that the U.S. or Europe can mediate peace in Ukraine. It’s an awkward position for the Western powers: The more they reject and ridicule China and the Global South’s call to end this war, the more they are seen as war mongers. President Biden can try to instigate peace to take a potential mediator role away from Xi, but the Russian government will see sabotage and is unlikely to trust a Washington-led process.
From a geopolitical standpoint, a China-led peace accord, if successful, would mean the Western world is no longer seen as global peacemaker. At this point, only the Five Eyes nations (the U.S., the U.K., Canada, Australia and New Zealand) plus the EU would see themselves that way. The rest of the world would not. It’s clear, then, that we’re at a crossroads in the multipolar world debate.
A Perception of Western Hypocrisy
The big emerging market countries had always aspired to build a global economy in which the policies and whims of the U.S. did not reign supreme, but their main markets were the U.S. and Europe, so this aspiration was more of an academic exercise.
Then the COVID lockdowns happened, and the world saw how the West limited the rights of its people. Then the Russia-Ukraine war happened, and the world saw how the West took control of Russia’s central bank accounts and massively altered its energy industry.
Many countries increasingly expressed their frustration with Western hypocrisy and lectures on human rights. Mexico’s Obrador said the West’s China-style COVID lockdowns were “letting their authoritarian instincts show.” He called the West “dictatorial.”
In practical terms, countries got scared that Western sanctions against them were coming next. India has been tossed around as a sanctions target for buying Russian military equipment this year. After India’s Foreign Minister Subrahmanyam Jaishankar was criticized for importing Russian oil, he complained that Europe was engaging in double standards. After all, Europe imported six times more Russian oil than India did since the start of the war in February 2022. “Why didn’t Europe cut off oil from Russia right away? ... You can’t say ‘this is my principle, but, by the way, I will do it by my timing,’” he said.
Similar feelings are present in Africa. Mo Ibrahim, a billionaire philanthropist from Sudan, likely summed up the sentiment of African leaders in an interview with the German news outlet DW, when he said: “Do the international rules only apply to Russia and not the U.S.? Let’s not be hypocrites. This is the problem. You need to look into the mirror sometimes. Let’s be honest in dealing with this stuff. I think it is unacceptable for Russia to invade Ukraine, but in the same place I will condemn the American invasion of Iraq. When you talk about international rules ... it has to apply to everyone.”
Building Their Future—BRICS by BRICS
How will the BRICS countries respond next? That’s certainly an important question leading into this weekend’s annual BRICS summit, taking place in South Africa. First, concerned that U.S. policies will constrict trade in emerging markets, the BRICS countries have renewed conversations about conducting commerce in one another’s currencies instead of the U.S. dollar. For the private sector, Russia sanctions made settling dollar transactions nearly impossible. This is what led to the “de-dollarization” headlines we have seen in both the political and financial press lately. If you are a Brazilian exporter of, say, poultry products—one of Brazil’s biggest exports to Russia—good luck settling commerce with them in dollars.
The BRICS nations would be wise to believe that Western sanctions are becoming more frequent. Western policies are a real political risk to them now. For most emerging nations, China is their number-one or number-two market, and it’s a big investor in their countries. A developing nation reliant on China trade has no choice but to prepare for the day when sanctions against China will make it hard to settle trade in dollars with their Chinese counterparts.
This is why more emerging market nations want to join the BRICS. While they would prefer to use the dollar—it’s abundant, and they have been doing it forever—it is reasonable for them to suspect they are one felled tree in the jungle from climate sanctions. Africa or the Middle East might be one trans pride rally ban away from human rights sanctions.
De-dollarization isn’t anti-dollar: It represents protection against sanctions. The emerging world now sees the U.S. and Europe as bullies that must be dealt with.
The BRICS countries couldn’t have done this 10 years ago. Together, their economies are now bigger than the G7 economies in terms of purchasing power parity. They have more economic leverage than most Western countries. China’s economy is bigger than every Western economy except the U.S.’s. India’s economy is bigger than France’s and the U.K.’s, and it will likely surpass Germany’s by 2030.
Western corporations used to have an unrivaled playground in these countries, but now, China is taking over both in terms of foreign direct investment and corporate brands. Ford no longer makes cars in Brazil: China’s Geely and BYD automakers do. If Brazil adopts electric vehicles in the future on a large scale, it will be Geely’s Polestar and BYD Seagull hatchbacks that dominate the roads, not Teslas.
These days, Washington can barely persuade Mexico to police its border and destroy the fentanyl drug trade. Can you help a friend out, Mexico? The answer has been a resounding no.
Moreover, Obrador is telling Mexican-Americans in Florida to vote against presidential candidate Ron DeSantis because of DeSantis’ support for immigration policies unfavorable to Mexico’s addiction to remittances—the record-breaking amounts of money sent to Mexico from Mexicans working in the U.S.
On the foreign policy front, the Middle East is tired of regime change wars. It was China that got Saudi Arabia and Iran back on speaking terms. The West had nothing to do with getting Syria back in the Arab League. Washington and London advised against it, and they were summarily ignored. And again, it won’t be the U.S. or European Union that ends the Russia-Ukraine War. The developing world will see this as a failure of the West, and a shifting of political influence away from the G-7 nations.
As Jim O’Neill recently said in an interview, the countries of the West “no long rule the world in the eyes of emerging nations.” The West needs to rethink its relationship with many developing countries, many of which they helped grow in economic and political might thanks to the offshoring of manufacturing and cheap capital. But if the West only wants to demand fealty and punish those who pull away from its world view, then the Western world will only expedite the developing world’s exit from its orbit.