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The expansion announcement happened in Johannesburg, South Africa, with President Cyril Ramaphosa hosting the BRICS three-day summit. All nation members from the bloc — Brazil, South Africa, India, Russia and China — were present, excluding Russian President Vladimir Putin, who joined the meeting virtually. His absence comes after the International Criminal Court charged him for his war crimes in Ukraine and declared him imprisoned if he stepped foot in South Africa.
In a statement of expansion made by Ramaphosa, he publicly declared their approval of six new nations joining the bloc — Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates — starting January 1st, 2024. More than 40 other countries have already expressed interest in joining the bloc, demonstrating its popularity among the international community.
What is BRICS?
This acronym entails Brazil, Russia, India, China and South Africa, having its name and concept associated with Goldman Sachs economist Jim O’Neill. In 2001, economists predicted that by 2050, the first four economies would significantly influence the global economy. South Africa joined later in 2010 with the same predicament in mind. This bloc of countries seeks to collectively create economic cooperation while bringing their political and economic voices to the top table.
The upbringing of BRICS is a response to the voices of developing countries not being acknowledged across global economic platforms and their interests not being appropriately represented. Together, these countries act as a balancing force against Western hegemonic influence. BRICS also aims to reduce reliance on the U.S. dollar (USD), with an increased fear recently alongside the member countries after the weaponization of the U.S. currency in Russia with sanctions limiting its energy revenue and military-industrial supply chains.
BRICS Expansion’s Impact on the International Community
Even though the members of BRICS together represent 42% of the world population, having a total GDP in purchasing power parity greater than the G7, with 32% to over 30% from the other group, the countries in this bloc only have a fraction of voting power in the International Monetary Fund.
With that in mind, they aim to impact the international community by bringing more balance into what is now a U.S.-led financial institution through the New Development Bank. According to China Affairs analyst Einar Tangen, when trading through South African Rand bonds, these countries will not have to worry about what will happen to the USD as they will get paid in Rand. Developing countries will not necessarily have to use USD when they trade now. Instead, they can make commerce in their currency or trade value directly.
The BRICS expansion will likely boost payments in international trade in their domestic currencies. Through this move, there may be a reduction in the economic dominance of the USD and problems developing countries have in balancing payments through the Contingent Reserve Agreement, which allows liquidity support through currency exchange and nourishes the global financial safety net. An increase in multilateralism and cooperative relationships among the bloc’s nations may also happen.
What makes BRICS one of the fastest-growing economies is heavily explained by their extensive availability of natural resources. With more countries joining the bloc, they will hold 72% of the globe’s rare-earth elements, with three of the five countries with the largest reserves. It will also accumulate 50% of the world’s graphite, 10% copper, 28% nickel, and 75% manganese.
BRICS Expansion as a Threat to the West?
There has been considerable criticism of BRICS expansion from several scholars. Hung Tran, a nonresident senior fellow with the Atlantic Council’s GeoEconomics Centre, expressed that China and Russia’s support for Iran joining BRICS “has strengthened the anti-U.S. axis in the BRICS.” This viewpoint portrays the expansion as a collective action towards an anti-West movement.
Others have predicted the expansion will fail due to differences in ideologies and values, allowing the possibility for a dilution of power and a challenge for member countries to reach consensus. Danny Bradlow, a professor with the Centre for the Advancement of Scholarship at the University of Pretoria, stated the difficulty of what “commonalities among the six countries invited to join BRICS [share] other than that they are each significant states in their region.” The main concern from these scholars is that two of the largest economies in the world — China and Russia — will possibly have a chance to trade with each other without the USD.
Structurally speaking, some of the BRICS countries have clashing inner interests and conflicts.
China and India, for example, share a simmering border conflict over their Himalayan border. Tensions are reaching so high that India, on Shanghai Cooperation Operations (SCO), objected to signing a strategic economic development plan “because it included Chinese diplomatic language.”
In the case of Russia’s leader, Putin has viewed the BRICS expansion as a strategic opportunity to challenge Western powers as a response to the isolation sanctions made against Russia following the invasion of Ukraine. At the BRICS conference, Putin reiterated an anti-Western sentiment and stated, “They are trying to replace the system of international law with their so-called order, based on rules that no one has seen. Rules used, it must be said bluntly, for selfish purposes and changed to suit the current political agenda, whenever and however they please.” Putin continued arguing that there is a threat to the “establishment of a new world order posed by the radical neoliberalism imposed by some countries, and that aims to destroy “traditional values”.”
This vision from the Russian leader is not shared by some of his BRICS companions, with Ramaphosa even stating that the bloc would “not be drawn into a contest between global powers.” These speech acts directly contradict some fellow BRICS member partners. Brazilian President Lula Inácio Lula da Silva broadcasted through social media at the BRICS summit that the bloc was not “a counterpoint to the G7, G20 or the United States,” indirectly making statements against Russia’s invasion of Ukraine.
Another diverging point among BRICS countries relates to the Brazilian proposal of creating a common currency for trade, which fellow members are skeptical of. In addition to drifting perspectives within BRICS, the group contains countries with various types of government, including four democracies, seven mixtures of monarchies, one-party states, dictatorships and theocracies. These considerations make uncertainties around the success and security of the bloc seem understandable.
Moving away from dependence on the dollar — de-dollarization — seems pressing among Western scholars’ concerns, alongside the fear that this will be an attempt to challenge the West and create an anti-West global order. Steven Gruzd, an analyst for the South Africa Institute of International Affairs, told VOA News that increasing the membership of non-democratic countries could increase the bloc’s anti-Western sentiments. Gruzd stated, “If BRICS expands and includes countries like Iran, this will enhance the anti-Western tone and tenor of discussions.”
According to South African organizers, the New Development Bank does want to de-dollarize. They are approaching de-dollarization from a debt angle and focusing on using BRICS currencies, such as South African Rand, Brazilian, Reais, and Indian Rupees. This bank, created by BRICS, is growing exponentially, with $33 billion already borrowed for development projects. According to International Crisis Group co-chair Frank Giustra, through a statement made for Responsible Statecraft, with the decision of the U.S. and its allies to freeze Russia’s currency reserves and shut it out of the Society for Worldwide Interbank Financial Telecommunications (SWIFT) following Russia’s war in, there was increased resistance to the USD and distancing from USD trade agreements among many countries, including those in BRICS. Giustra stated, “Financial systems are built on trust, and if they are weaponized, they lose the trust necessary to retain their dominance.”
BRICS Moving Towards Multilateralism
While some scholars argue that the structural differences and somewhat converging interests from each BRICS nation make the bloc doomed to fail, this is not a unanimous opinion. Ben Aris, founder and editor-in-chief for the BNE IntelliNews, expressed that what BRICS countries share in common is not as important as what they own. Aris is referring to the immense scale of natural resources that all these countries have and what makes them the fastest-growing economies in the world. The glue sticking BRICS together is an “enemy at the gate mentality,” where they recognize they were ignored and need to fix things, including the domination of the USD.
Moving beyond criticisms and concerns over the BRICS group, scholar Zhao Ying mentioned, “There is a difference between challenging the West and challenging Western hegemony.” Ying explained that BRICS does not intend to challenge developed countries or reshape the international order but strives for a more just and equitable system.
Strategic autonomy and an independent foreign policy are the main focus, allowing more developing countries to practice multilateralism. Karen Costa Vazquez, another scholar from the Center for China and Globalization, affirms that the BRICS group is not pushing for de-dollarization; instead, they are offering creative options that include “seeking trades with local currencies to facilitate trade, reduce trade costs and increase market access, while also reducing exposure to exchange rate volatility.”
All concerns aside, what BRICS and its expansion movement are all in consensus with is the desire to end a political scenario that does not appropriately represent their interests and voices and create a more equitable balance of powers. Their markets are emerging, and through BRICS, they are starting to reach out and demand to no longer be overlooked in international politics.
Although the BRICS expansion presents structural flaws and has little chance of being a security risk for the West, it is notable that the time for acknowledgement of developing countries and opening up spaces for a more equitable international community is much needed. As Adam Gallagher, managing editor for the Public Affairs and Communications at the U.S. Institute of Peace, expressed, “The United States should take these concerns seriously and consider how to remake, or at least amend, the current multilateral order to address these frustrations and concerns, working with allies and partners to tackle the major challenges of the day.”
Edited by Gabrielle Andrychuk