Why has Argentina declined to join BRICS?
After the new government led by President Javier Milei took office in December 2023, it pulled Argentina out from joining BRICS in January 2024. On the one hand, this would please Milei's supporters, on the other it paves the way for greater economic opportunities with the US, while leaving the door open to joining the grouping in the future.
At the 15th BRICS Summit held in Johannesburg, South Africa, in August 2023, it was decided that Argentina and five other countries would join BRICS in January 2024. However, at the eleventh hour of Argentina's admission to BRICS, global media reported that Javier Milei, the new Argentinian president, had sent a letter to the BRICS leaders, formally declining the invitation to join the grouping, citing that the moment was not "opportune".
Why has the new Argentine government declined to join this important global framework? Upon its expansion, BRICS will account for 46% of the global population, 29% of global GDP, 20.4% of global oil exports and 20.58% of global exports.
Not joining the grouping
First, new leaders usually seek to honour their election campaign promises and establish a good image of the government. During the elections, Milei had expressed his opposition to Argentina joining BRICS because Argentina's "geopolitical alignment is with the US and Israel" and it is "not going to ally with communists".
Diana Mondino, Milei's appointed foreign minister, had also said that Argentina would not join the BRICS grouping. After taking office on 10 December 2023, Milei fulfilled a swathe of campaign promises, including announcing a set of plans to reduce government expenditure and devalue the peso, as well as not renewing the employment contracts of over 5,000 employees hired by the previous government in 2023, so as to cut public expenditure and curb inflation.
Temporarily declining to join BRICS demonstrates that the new government has indeed deviated from the previous government's foreign policy to some degree.
It was reported that Milei sent a letter to the BRICS leaders on 22 December 2023, but the content of the letter was only officially announced on the last working day of the year. This shows that he wanted to deal with this diplomatic incident in a low-key manner, in contrast to his high-profile announcements of the various domestic reform measures.
Gaining public approval
Second, there are differences in the current Argentine government's political postures and government policies, relative to the previous government's. Argentina's economy performed very badly under the last government, shrinking for four successive years. The cumulative inflation in the past 12 months reached 142.7%, the highest in 30 years.
The Alberto Fernández government believed that joining the BRICS framework would create opportunities for Argentina to enter the markets of these emerging economies, and regarded this as its major diplomatic achievement.
Perhaps, in the context of the global economic downturn, weak governance by the Fernández government was not entirely responsible for the nation's poor economic performance. However, the Argentine public undoubtedly blamed Fernández and his party.
By positioning himself in opposition to the Fernández government, whose domestic and foreign policies were unpopular, Milei is sure to gain public approval. This is the fundamental reason for Milei's insistence that his approach to foreign affairs "differs in many aspects from that of the previous government". Temporarily declining to join BRICS demonstrates that the new government has indeed deviated from the previous government's foreign policy to some degree.
Securing US support
Finally, and most importantly, the Argentine economy needs the US. Some scholars believe that Milei, who has claimed to be an anarcho-capitalist economist, has high praises for the US development model and is ideologically biased against China. He has also likened China to an "assassin" and considered that the people of China are "not free", making his government "pro-US".
However, this is only a secondary reason, or even a superficial one. Most importantly, the Milei government hopes to secure financing from the US government or private investors and the International Monetary Fund (IMF) so as to maintain normal government operations.
The Central Bank of the Argentine Republic's total reserves have halved in the past four years and its net reserves are in deficit. Argentina's forex reserves are below US$32 billion, and its foreign debt has reached US$276.7 billion at the end of 2022. Although the IMF has approved US$7.5 billion in loans to Argentina on 23 August 2023 helping to prevent capital chain rupture, "repaying old debt with new debt" cannot fundamentally address Argentina's economic woes.
Declining to join BRICS for now does not mean that the Milei government will not change its position during its term of office.
In the context of the US concurrently stepping up its strategic rivalry with China and Russia, Argentina can gain the support of the US and its allies by maintaining an ideological distance from China and Russia and temporarily declining to join the BRICS framework, which is led by those two countries. This is because the US political and academic circles unanimously agree that the expanded BRICS framework aims to establish a different world order from that led by the US and the West.
Opportunities ahead
Declining to join BRICS for now does not mean that the Milei government will not change its position during its term of office. One of the important aims of the expansion of the BRICS framework is to promote financial cooperation among the BRICS nations, when global nations are generally avoiding excessive dependence on the US dollar. While a unified currency is far from materialising within the BRICS framework, it is highly feasible to increase the scope of currency exchange and the use of local currencies for settlement among the BRICS nations.
Brazil and China are respectively Argentina's top two trading partners, and this is attractive for Argentina which is very low in forex reserves. The Milei government may well moderately lean towards the "left" and positively respond to the invitation to join the BRICS framework if it fails to promptly secure the help that it needs and expects from the US.
In addition, it must be emphasised that by declining to join the BRICS framework, it does not mean that the Milei government is putting on hold its bilateral relations with the five BRICS nations. Milei has clearly expressed his readiness and willingness to hold meetings with the five BRICS leaders.
