BRICS Plus: A Death Knell or a Complementary Partner for ASEAN?

Charting a course for BRICS Plus in a changing world

The following is an editorial by Ong Tee Keat, Senior Fellow of Taihe Institute and President of the BRI Caucus for Asia Pacific

Southeast Asia stood in international limelight again as four of the ASEAN member states, Indonesia, Malaysia, Thailand, and Vietnam (collectively known as ASEAN-4), were invited to participate as "partner countries" of BRICS Plus at the Kazan Summit last October. The announcement came on the heels of the ASEAN Summit in Laos and elicited immediate tongue wagging by pundits across the world.

Intriguingly, ASEAN, which does not prohibit its member states from joining other minilateral or multilateral groupings, is now having its effectiveness and relevance scrutinized microscopically, following the preliminary induction of ASEAN-4 to BRICS Plus. ASEAN centrality, underpinning the regional economic and security cooperation architectures, is being called into question, if not dismissed as mere rhetoric in its own multiverse. Some even view the expansion of BRICS Plus with the inclusion of ASEAN-4 as ringing the death knell for ASEAN.

All in all, the arguments are generally framed within the zero-sum perspective, with ASEAN and BRICS Plus being viewed as the only binary choices for the Southeast Asian countries. The pundits involved seem to have turned a blind eye to the multiple membership status of some ASEAN member states in the various minilaterals and multilateral groupings, such as the G20, APEC, the Organization of Islamic Cooperation (OIC), and the Indo-Pacific Economic Framework for Prosperity (IPEF).

In this context, the joining of the US-led IPEF by Indonesia, Singapore, Malaysia, Thailand, Vietnam, Brunei, and the Philippines - seven of the ten-member bloc - has never begged the question of triggering a chronic crisis of confidence in the regional bloc. Neither has it discounted ASEAN's continued relevance in promoting regional economic integration with the emergence of the IPEF.

Perhaps the only difference lies in that the IPEF is initiated by the US, while BRICS Plus - generally dismissed by the West as a motley grouping of Global South countries influenced by China - is pursuing its own agenda contrary to Western edicts.

While the turf of international discourse remains biased and dominated by the collective West, the arrogance of unipolar hegemony and superiority has blunted the West's sensitivities to the rest of the world, though the global dynamics are evolving increasingly toward multipolarity.

From the Southeast Asian perspective, ASEAN's multiple affiliations serve more as foreign policy planks to advance their interests, notably in addressing their respective developmental priorities and economic crunch. The complementarity of ASEAN and BRICS Plus affiliations is a boon to ASEAN-4 - which represents the vibrant emerging economies in the Southeast Asian region.

Broadly speaking, the market size of BRICS Plus, which represents 45% of the world's population, 25% of global trade, 40% of global oil production, and 28% of the global GDP (in nominal exchange terms), is far beyond the existing size of intra-ASEAN and Regional Comprehensive Economic Partnership (RCEP) trade. The fast expanding BRICS Plus is set to grant ASEAN-4 immediate access to a vast unconventional market in a large swathe of the Global South. The potential economic dividends accrued therefrom are simply too strong a pull to resist.

On the other hand, ASEAN-4, which is home to vast deposits of critical minerals and natural resources such as nickel, rubber, and palm oil, needs support from BRICS Plus in the face of mounting geopolitical pressure from the US-led Minerals Security Partnership. This is another NATO-like geostrategic alliance created in response to the increasing demand for critical minerals by the collective West, alongside meeting the geopolitical needs to diversify supply chains, ostensibly targeting China. Simply put, this aligns with ASEAN's conventional hedging strategy amid the rising geopolitical tension.

Yet, to the inter-governmental BRICS Plus grouping, the inclusion of Indonesia, Malaysia, Thailand, and Vietnam to the fold will undoubtedly bolster its clout as a commodity powerhouse.

Alongside this, ASEAN-4's quest for developmental finance to address specific choke points in their pursuit of development and modernization constitutes another contributing factor prompting them to embrace BRICS Plus.

Over the years, the gap in development finance, notably in infrastructure development across Southeast Asia, has long been on the back burner under the watch of the World Bank and the International Monetary Fund (IMF).

In this context, the BRICS-founded New Development Bank (NDB), headquartered in Shanghai, offers an alternative choice of multilateral financial institution to the emerging economies in addressing their respective developmental priorities, notably in infrastructure construction and sustainable development. It emerges as an unprecedented rival to the Bretton Woods institutions, posing a direct defiance to the existing dynamics of global financial governance that favor the developed economies.

Parallel to this, the growing trend of Global South countries settling cross-border trade payments with local currencies, alongside currency swap arrangements among some of these nations, has turbo-charged the momentum of ditching the greenbacks in global trade.

Despite this, a study by the Atlantic Council's GeoEconomics Center last year reaffirmed that the US dollar remains the world's primary reserve currency. Regardless, the NDB remains committed to increasing local currency lending to 30% of the total lending by 2026 to meet the rising developmental needs in the Global South. This helps relieve the borrower countries from the mounting debt distress induced by the US currency appreciation.

The repeated tariff threats by the US President in his bid to deter the growing de-dollarization, be it through the use of a new BRICS currency, if any, or any currency other than the US dollar, did not seem to stem the tide. A clear case in point lies in the recent mutual agreement between Indonesia and India to use either rupiah or rupees for their trade settlement. This came on the heels of a naked threat of a 100% tariff against countries defying the US unilateral demand.

To ASEAN, BRICS Plus' role in promoting the use of local currencies in financial transactions is a timely booster, strengthening ASEAN's arm in boosting regional payment connectivity. Obviously, the ASEAN Local Currency Transaction Framework is a ready instrument in serving this purpose. Coincidentally, Indonesia, Malaysia, and Thailand, three members of ASEAN-4, are forerunners under the framework.

Presently, ASEAN-4 members, with the possible exception of Vietnam, which appears somewhat cautious in engaging with BRICS Plus for fear of alienating itself from the US, are understandably looking beyond the prevailing role and initiatives of ASEAN, which are more adherent to enhancing economic regionalism within the region.

In this context, the accessibility to a wide gamut of BRICS initiatives, ranging from the BRICS Pay, the Contingent Reserve Arrangement (CRA), the NDB, and the BRICS Clear, to a cross-border settlement and depository infrastructure, a BRICS reinsurance company, and a BRICS grain exchange, offers fresh hopes to the aspiring ASEAN member states in their quest for fresh milestones in the evolving multipolar global order.

The BRICS Plus' unanimous opposition to economic sanctions and discriminatory carbon border adjustment mechanisms imposed by the US-led West further inspires the ASEAN member states, which have been bearing increasing brunt of global exigencies such as poverty, debts, and communicable diseases.

ASEAN member states like Indonesia, Thailand, and Malaysia need BRICS Plus' help to amplify their voices of concern on these challenges, some of which are taking a toll on these emerging economies.

From the macro perspective of making ASEAN Centrality sustainable, noting that both China and Russia in the BRICS Plus grouping are signatories to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), it's all the more relevant for ASEAN to seek BRICS Plus' endorsement for its push to promote the Southeast Asia Nuclear Weapon-Free Zone Treaty. Amid the changing dynamics of the day, this is crucial in giving the decades-old Zone of Peace, Freedom, and Neutrality (ZOPFAN) Declaration a new lease of life and geopolitical relevance.

The ZOPFAN Declaration, which is a foundational document expressing the bloc's collective intent in making Southeast Asia a zone of peace, freedom, and neutrality, free from any form or manner of interference by outside powers, underpins the entire architecture of ASEAN Centrality in sustaining peace and prosperity. This needs to be bolstered and stay watertight, in view that member states such as the Philippines have been yielding to the external influence of the US by courting the latter's intervention. This is a clear breach of the ZOPFAN Declaration, of which the Philippines was a signatory.

Amid the rising Sino-US rivalry in the region, the ASEAN member states must stay true to their aspirations while calibrating their foreign policies in engaging with the two major powers. From the ASEAN perspective, the bloc can ill-afford to have its centrality compromised.

Over the past 16 years, since 2009, a resounding success in the "trade-in-goods" across the region, particularly with China, has been strengthening ASEAN's economic muscle. Yet this is far from being sufficient in meeting the growing multi-dimensional aspirations among some of its member states. In this respect, ASEAN would benefit greatly from the support of BRICS Plus to bolster its relevance in the emerging multipolar world.

Under the prevailing circumstances, the clear choice lies in the growing clout of the developing Global South, which is now represented by BRICS Plus - a force to be reckoned with in the power equation of global dynamics.