Buenos Aires, Argentina – Patricia Bullrich works the crowd. Addressing representatives from over 600 companies at the 2023 AmCham summit in Buenos Aires, the former left-wing rebel and current right-wing presidential hopeful recognizes that it would only be an electoral “option” in more stable times.
But these are not stable times in Argentina – not with the inflation rate exceeding 100% and poverty approaching 40%.
In Bullrich’s account, his “character and determination” could be the salvation of a country struggling with a $44.5 billion in debt to the International Monetary Fund (IMF) and a once-in-a-century drought that cut its soybean and wheat production in half. Under these circumstances, would a Bullrich administration agree to join BRICS — an alliance that is an acronym for US adversaries Russia and China, as well as Brazil, India and South Africa?
“We’re not going to the BRICS,” she said in a Q&A at the summit, adding that her geopolitical allies would be the “democracies” of the United States, Western Europe and Israel.
Mayor of Buenos Aires Horace Rodriguez Larretaanother leading presidential candidate from the same center-right Juntos por el Cambio (Together for Change) coalition, made similar comments to the AmCham crowd this month, but said he would be ready to trade with any nation including the BRICS.
Yet whoever wins October’s presidential election, they may not have the luxury of pursuing their political beliefs in an increasingly multipolar world.
Argentina is facing its worst economic crisis since the depression of 1998 to 2002, when unemployment soared above 20% and more than half the population slipped below the poverty line. President Alberto Fernandez of the center-left coalition Frente de Todos (All People’s Front) has already announced that he will not run for a second term, while his vice-president, Cristina Fernandez de Kirchnerrefused to appear following a controversial fraud conviction.
Last June, during a videoconference with BRICS representatives and heads of state, Fernandez requested full membership in the group on behalf of Argentina. More recently, the Brazilian President Luiz Inacio Lula da Silva pledged to help “eliminate [the IMF’s] Argentina’s neck knife”.
Will the South American nation end up join the BRICS remains an open question, although this is unlikely before the October elections. There is also no guarantee that joining would move the needle. What is clear, however, is that Argentina could use all the help they can get.
“When you’re in opposition, you’re free to say whatever you want,” Vicky Murillo, director of the Institute for Latin American Studies at Columbia University in New York, told Al Jazeera. “But if either coalition wins, the next government will have to pay particular attention to Brazil and China. These relationships are too important to make ideological distinctions.
Emerging Markets
Coined by a Goldman Sachs analyst in 2001, BRICS (then BRIC) is an acronym used to describe some of the largest emerging markets in the world. The countries held their first diplomatic summit in Yekaterinburg, Russia, in 2009, and the fledgling bloc added South Africa the following year.
Representing more than 40% of the world’s population, the BRICS were designed as a counterweight to the G7 countries that have long dominated the global economy and its financial institutions. To that end, the bloc created the New Development Bank at its sixth annual summit in Fortaleza, Brazil, in 2014.
“The founding logic of the new development bank is to have an alternative financing mechanism that emphasizes the needs of developing countries rather than those of rich countries,” said Andres Arauz, senior fellow at the Center for Economic and Policy Research in Washington, DC, and a former Ecuadorian minister of knowledge.
“Although its goals are ambitious, the NDB only has about $12 billion that it can distribute to member countries,” he told Al Jazeera. “But the BRICS countries themselves have billions of dollars in reserves and plenty of cash available to help Argentina refinance its debts.”
To understand why Argentina has pursued a closer relationship with the BRICS, one need only look at its latest IMF loan. In 2018, the fund provided a record $57 billion to the right-wing administration of the then president. Mauricio Macri.
But rather than rebuilding Argentina’s crumbling infrastructure, that money was largely used to finance capital flight – a violation of IMF statutes. The economy stagnated, inflation soared to over 50% in 2019, and voters ended Macri’s presidency after just one term. His successor, Alberto Fernandez, canceled the last tranche of the loan, but his administration failed to stem the bleeding.
The COVID-19 pandemic, a costly war in Ukraine and this year historic drought all served to improve the electoral prospects of Juntos por el Cambio candidates, as well as those of Javier Milei of La Libertad Avanza (Freedom Advances)—a political outsider who has proposed dollarizing Argentina’s economy.
“The BRICS have the ability to redefine Argentina’s relationship with debt,” Julio Gambina, an economist and professor at Argentina’s National University of Rosario, told Al Jazeera. “His investments could enable the country to build a community economy that prioritizes the needs of individuals and families over transnational corporations. But that remains a theory.
Hindering Argentina’s potential entry into the BRICS is its history of joining and leaving international alliances, said Juan Gabriel Tokatlian, professor of international relations at Torcuato Di Tella University in Buenos Aires.
In 1973, Argentina joined the Non-Aligned Movement – a coalition of countries that opposed Cold War-era polarization and championed the interests of the developing world – only to leave the group in 1991. And it was a member of the Union of South American Nations before retiring in 2019.
“If Argentina were to enter BRICS only to drop out because an incoming government has a different political orientation, it would be very expensive,” Tokatlian told Al Jazeera. “At the same time, BRICS countries want to be sure that new entrants to the bloc will stay. So they make their own strategic calculations.