IN LATE SEPTEMBER 2023, THE MAIN trade union federations from BRICS countries converged in Durban for their annual trade union forum (BRICS TUF). The theme was “Cooperation for Fair and Inclusive Development for all Peoples of the World…”

Their gathering was immediately followed by the BRICS Labour and Employment Minister’s Meeting (LEMM), which is meant to merge government and business inputs with those of organised labour. As expected, the trade union movement was meant merely to rubberstamp and legitimise the decisions taken by government ministers. Organised labour’s participation in LEMM was reduced to a ten-minute input from Cosatu, handpicked by the Department of Employment and Labour, without consultation with South Africa’s broader labour constituency.  

Dangers of bourgeois nationalism

This did not shock us, however. The shocking development is the attitude of the representatives of the trade union federations, who cloaked themselves in bourgeois nationalism and turned themselves into unappointed spokespersons of their governments. They did not focus on forging alliances between our federations for a common struggle against exploitation, privatisation, and fiscal onslaught. Instead, it was a classic example of “customarily jumping at the opportunity to join government delegations to trade deal talks”, echoing narrow bourgeois nationalism, guided by the logic of competition and trade.

This attitude is caused by the degeneration in the labour movement, which itself is caused by trade unions being drawn closer to the government through alliances. To avoid these dangers, trade union federations in the BRICS bloc will have to come together on a common programme of struggle against exploitation, privatisation, and fiscal austerity.

Against the neoliberal agenda

So, the BRICS government’s declaration in 2013 committed to debt sustainability. This is a repetition of the neoliberal mantra established under the Bretton Woods regime, to whip countries towards “fiscal consolidation”. In recent years, the governments of India, Brazil and South Africa have implemented fiscal austerity. Trade union federations ought to be establishing a common platform to fight the imposition of such austerity measures.

Saftu brought a motion for insertion in the declaration, to commit the federations to fight against privatisation in the process of the clean energy transition. This motion was elbowed aside on the grounds that it was submitted late. But as the unfolding energy transition is being privatised, our opposition towards it must grow louder. Our struggle with our national bourgeoisie for the share of the surplus continues. 

BRICS and the need for an alternative

Trade union federations in the BRICS bloc will have to come together on a common programme of struggle against exploitation, privatisation, and fiscal austerity.

BRICS was meant to offer a multipolar alternative, in the context of the unfair multilateral system that favours the US and Europe. The West has used its post-war hegemony, through the Bretton Woods financial institutions (the World Bank and IMF) and the World Trade Organisation, to allow its corporations to dominate global trade. This became even more acute in the 1970s when the global economy stagnated as a result of the overaccumulation crisis that built up in the Western economy, as multinationals competed for the world market.

The multinationals that could win and dominate global capitalist trade were those that could lower their input costs and undercut their competitors. Multinationals from the advanced world migrated production to East Asia, where unit costs of labour were low, independent unions were not allowed, and environmental, safety and health regulations were non-existent. In addition to offshoring, these multinationals benefitted from the World Bank and IMF structural adjustment programmes that turned the neo-colonial world into a destination for Foreign Direct Investment, to extract minerals and profits cheaply.

And soon BRICS companies also took advantage of the poorest countries’ misery. An alternative multilateral regime is necessary. The question however is, will a BRICS that is still premised on a capitalist framework provide the alternative so desperately needed?

Imperial-capitalism and disappointments

One area where the Bretton Woods institutions have had a continuing stranglehold is in controlling finance and dictating policy recommendations that serve the interests of imperialist corporations from the advanced neo-colonial countries.

Disappointingly, instead of forging a new developmental path away from these institutions, the BRICS governments still follow the recommendations of the IMF and World Bank. They have increased their ownership in both institutions. These institutions have been declaring since 2009 the desire to change leadership and “shift the voting power… in favour of the Emerging Market Economies and Developing countries”. But the Bank president is still inevitably a US citizen, while the IMF’s leader is always European.

And their neoliberal agenda has not changed. In its 2022-26 Country Partnership with South Africa, the World Bank asserted that a “sustained pace of reform and level of fiscal consolidation will mean that difficult policy choices will be required”. These included cuts in public services, privatisation of state-owned enterprises, and shrinkage of the civil service wage bill.

The BRICS’ failure to establish a new, independent financial institution makes this all the more discouraging. As Zwelinzima Vavi said in his input to the BRICS Trade Union Forum if South Africa taps the $100 billion Contingent Reserve Arrangement, that still gives power to the IMF: after taking 30% of our quota as a loan, access to the next 70% requires having an IMF structural adjustment programme in place!

That is why it was no surprise that the BRICS Johannesburg II Declaration (the first having been in 2018) showed the leaders’ ongoing obedience to Western neoliberal institutions, as articulated in a half-dozen resolutions supporting: a rules-based multilateral trading system with the World Trade Organisation (WTO) at its core…a market-oriented agricultural trading system… a robust Global Financial Safety Net with a quota-based and adequately resourced International Monetary Fund (IMF) at its centre… [with] increases in the quota shares of emerging markets and developing economies (EMDCs)… including in leadership positions in the Bretton Woods institutions. 

De-dollarisation

The other area where Sandton demonstrated dismal political will is the need to urgently reform the global currency regime. The domination of the US dollar as the base currency has been a problem; it enables US imperialism to bully and influence economic policy globally.

The other area where Sandton demonstrated dismal political will is the need to urgently reform the global currency regime. The domination of the US dollar as the base currency has been a problem; it enables US imperialism to bully and influence economic policy globally.

In December 2022, the Bank of International Settlements reported that half of the world’s trade is conducted/invoiced in US dollars. Although there has been a gradual decline over the past 19 years, the dollar still accounts for over 60% of Foreign Exchange Reserves.  In addition to this, about half of the cross-border loans and international debt securities are issued in US dollars. The dollar is the base currency of the world. Even the BRICS New Development Bank only lends 22% of its current portfolio in local currencies.

The position held by the dollar unfairly advantages it against other currencies and affects trade relations generally. By holding the dollar as the base currency, the US can lay a claim over values produced by the working class across the world. They don’t have to match the toil; they simply print the currency. And when there is financial turmoil — even if it emanates from the US — the dollar strengthens because it is a hedge and “store of value” globally. The devaluation of the dollar in such a position is unthinkable.

Moreover, the US Federal Reserve – which decides on printing dollars – determines the pace of monetary policy and interest rates across the world. Fearing devaluation against the dollar, central banks of many countries have tailed the Fed’s hiking of interest rates since early 2022, so that the sellers and buyers of currency will hold onto their currency, rather than dumping it in the forex market. Our central bank, the SARB, is doing this even at the risk of recession, more unemployment and rising cost of living.

There is a lack of serious engagement by trade unions and others in civil society. There is a tendency to hype the BRICS as anti-imperialist when in reality it is sub-imperialist. We have not yet provided an alternative monetary regime of exchange.

There has been regular rhetoric about striving to “reform the financial architecture” since the 2008-09 global financial meltdown. Yet in the BRICS 2023 declaration, the only mandate along these lines was to “task our Finance Ministers and/or Central Bank Governors…to consider the issue of local currencies, payment instruments and platforms and report back to us by the next Summit.”

Kicking the can down the road in this manner leaves doubt about whether the BRICS are serious about reforming, or whether their conservative leaders enjoy the status quo.

Their capitalist orientation makes a mockery of providing an alternative. In a capitalist framework, competition, not collaboration, is the determining feature of trade relations. Individual countries have to be ruthless, including exporting capital at the lowest costs by suppressing labour costs. So the new order will not replace imperialism with a more humane order but with another form of imperialism. Even though this imperialism might not resemble the murderous US imperialism, it will nonetheless be geared towards profit extraction and the plunder of resources.

Trevor Shaku is the National Spokesperson of Saftu and a former FMF and OMF activist.