Could Argentina’s incorporation in BRICS+ be under threat?

In late August, BRICS leaders met in Johannesburg, South Africa for the bloc’s 15th Summit.

Originally founded in 2009 by Brazil, Russia, India and China, with South Africa becoming a member a year later, South African President Cyril Ramaphosa announced a further six nations will join the bloc.

In what some analysts have dubbed “BRICS+”, Egypt, Iran, Ethiopia, Saudi Arabia, the United Arab Emirates (UAE) and Argentina are set to join the bloc from January 2024.

In Latin America, Argentine President Alberto Fernandez announced his nation’s incorporation entails “a new scenario” with potential for growth and development, insisting “we can increase our possibilities of opening new markets, consolidating existing ones, favouring investment flows, creating employment, increasing exports and to develop the application of new and better technologies.”

Martin Alejandro Martinelli, a historian at the Geohistorical Observatory, National University of Lujan and the Latin American Council of Social Sciences (CLACSO), describes it as a "momentous and historic shift" for the nations joining BRICS and citing analyst, Jose Fiori, calls it "a systemic explosion in the international order."

If Argentina continues its BRICS trajectory, Martinelli suggests it could open up new possibilities of relations and exchanges, at a "geostrategic, geopolitical and geoeconomic level" and the possibility of balancing on the international stage.

It follows what he describes as precedents of "unipolarity" and "Western dominance of world, economic and financial organisations, also the military, (NATO, IMF, World Bank, the use of the dollar)."

This shift involves the formation of a belt of four continents excluding Western Europe, Japan and the US that he argues “exercised dominance through force and consent.”

"An alliance of such magnitude reflects the geoeconomic and tectonic shifts that entail a hegemonic rebalancing of the capitalist system," Martinelli tells TRT World.

Argentina's incorporation is also an "expression" of the transformations to the global order amid the prominence of emerging and developing nations in the economic, political, social and cultural spheres, argues Sebastian Schulz, a sociologist at Argentina’s University of La Plata.

“The incorporation of Argentina into the BRICS also means ratifying Argentina's commitment to multipolarity, to which Latin America and the Caribbean has much to contribute,” Schulz tells TRT World.

Pushback to BRICS in Argentina

Nevertheless, Argentina’s presidential election this year could hold some bearing over proceedings.

“Argentina's participation in BRICS —[is]  something we will only know with an incoming government,” Bernabe Malacalza, professor at Argentina’s National University of Quilmes and Torcuato Di Tella University tells TRT World.

In October, Argentina heads to the polls to elect a new President and the country’s potential incorporation has received strong push-back from opposition presidential candidates on the right - Patricia Bullrich and Javier Milei.

Victorious in Argentina’s August primary elections, far-right candidate Milei, said he will “not promote a deal with Communists,” and has criticised BRICS’ members, Brazil and Chile.

Malacalza suggests Milei’s outlook is not a reasonable attitude, reflecting “a hyper-Western and anachronistic dogmatic thought with arguments more suited to the 20th century Cold War, a staunchly anti-China stance, and a tenacious alignment with the United States.”

Moreover, he explains the US has never requested Argentina cease its incorporation into BRICS, nor criticised it amid its push to join.

Martinelli also believes it is "quite likely" Milei could propose not joining BRICS, describing it as a "myopic-outlook" and “something extremely negative for Argentina and the region” amid the high levels of trade with top partners like Brazil, China and India.

He also believes Milei could boycott BRICS or follow former Brazilian President Jair Bolsonaro and former US president Donald Trump who left international organisations.

However, during Bolsonaro’s tenure, despite strongly questioning BRICS and close US-alignment, Schulz notes Brazil never withdrew from the bloc.

He suggests Argentina’s opposition may be unable to fully grasp the importance of BRICS, solely regarding it “as mere trading partners, not as a bloc that can play a strategic role in the configuration of a new international order.”

Malacalza believes Argentina’s potential participation in BRICS makes strategic sense, if the country follows the bloc’s platform as a political and diplomatic space that could “revitalise” Argentina’s global standing amid an evolving international context whereby the Latin American nation has faced a “prolonged decline” and is pushing to recover its international footing and influence.

Potential financial opportunities

Argentina is also experiencing a stark financial crisis with spiralling inflation.

Its Central Bank is facing dwindling reserves of dollars while the country makes repayments to the International Monetary Fund (IMF), following its 2018 historic IMF $57 billion loan during the presidency of Mauricio Macri to ease Argentina’s economic malaise.

Analysts believe the BRICS’ New Development Bank (NDB) could afford Argentina new opportunities, with Schulz calling it "a key tool to bolster the infrastructure deficits that emerging countries have, which contributes to granting them a greater degree of sovereignty"

According to Malacalza, this ranges from potential infrastructure projects but would require Argentina putting in $250 million as an entrance fee to the NDB.

Overall BRICS could boost Argentina in terms of three initiatives, he explains, from access to the Reserve Contingent Arrangement to solve the country's liquidity problem. Investments in the NDB infrastructure could remove obstacles when it comes to economic growth. If the BRICS payment system is launched, it could afford a potential shift away from the dollar - with the possibility of settling business transactions in local currencies.

Martinelli also suggests the potential implementation of BRICS+ currency could drive a de-dollarisation initiative, alongside the use of other currencies in global trade.

In January Brazil President Luiz Inacio Lula da Silva and President Fernandez floated the idea of a regional currency. Brazil, a “strategic” partner of Argentina, also played a “crucial” role in driving Argentina’s incorporation into BRICS, explains Malacalza while in recent months Lula has continued to push for a shift away from the dollar.

In the medium term, Martinelli perceives international observers could likely see the broader use of the Chinese Yuan in international exchanges, something Argentina has already used to repay the IMF.

Schulz sees further financial opportunities for the Latin American nation.

“Argentina's participation in the BRICS makes it possible to access credits that are much more accessible than those provided by traditional financial organisations. Credits that, in turn, are intended to strengthen the Argentine industrial complex, transportation connectivity, energy generation,” he adds.

Deepening ties

Analysts believe Argentina will likely boost its relations among the partners in the bloc, following public backing from both Russia and China in July 2022.

Malacalza describes China, one of the largest investors in the Latin America nation in the last two decades, as positioning itself as the main importer of Argentine products and the second most important destination for Argentine exports in 2022. In the same year, India grew closer to Argentina, with the Asian powerhouse now ranking 5th in terms of Argentine exports.

Argentina has also played an essential role in the South Atlantic Peace and Cooperation Zone, an initiative pushing cooperation, peace and security in the South Atlantic region first set up in 1986 which Argentina has pushed to revive in recent years, explains Malacalza.

Argentina’s territorial claim in the South Atlantic Ocean.

Schulz suggests Argentina’s participation in the bloc could allow it to unite some of its most foreign policies, describing them as in “complete harmony” with the bloc’s core tenets, notably its territorial claim regarding the sovereignty of the Malvinas or Falklands, Georgia and South Sandwich Islands - something President Fernandez underscored in his BRICS speech.

According to Malacalza, “all the BRICS countries have long supported the country's position on the Malvinas issue and, especially with regards to the need to resume negotiations between our country and the United Kingdom on the sovereignty of the islands.”

He has also outlined how BRICS should be regarded as a space promoting a rebalancing within the international order, something different to a Cold War mentality of an anti-G7 alliance or simple supporter of China. He suggests it is best regarded as a form of “soft balancing” on the international stage and not as a space pushing “counter-hegemony”.

“Brazil, India and South Africa, like Argentina if it were to join, seek to rebalance international relations, not destabilise them; They are the key countries showing that it is one thing not being part of the traditional West and quite another being anti-Western,” he argues.