In what is seen by many as manoeuvrings to become a geopolitical rival to the G7, China’s President Xi Jinping has urged a rapid expansion of BRICS at the grouping’s annual Summit.
But whilst China has long advocated BRICS becoming a more influential bloc, tensions have grown between the Communist superpower and fellow member India, over the degree of political influence that BRICS should assert – as a direct challenge to the west.
Focus has once again turned to new BRICS membership, as leaders from Brazil, Russia, India, China and South Africa – amongst others – met this year in Johannesburg for the XV BRICS Summit from Aug 22-24. This year’s theme was BRICS and Africa: Partnership for Mutually Accelerated Growth, Sustainable Development and Inclusive Multilateralism.
Numerous countries, including many from the Global South, have expressed interest in joining the bloc, with several significant new entrants likely to be confirmed in the near future.
President Xi told the Summit he was pleased that developing countries were showing great enthusiasm for participating in BRICS. “We should let more countries join the BRICS family, to pool wisdom and efforts to make global governance more just and equitable,” Xi declared.
He further described BRICS expansion as “an historic event and a starting point for cooperation amongst developing nations.”
As host, South Africa’s President Cyril Ramaphosa invited more than 60 heads of state and government to the Summit. In July, South Africa said more than 40 nations had expressed interest in joining the organisation to extend the bloc’s influence. These included Saudi Arabia, Iran, Egypt, Argentina, Ethiopia, Indonesia and the United Arab Emirates.
It is believed that any one of these nations could be the first in a fresh round of BRICS integration. If so, they would be the most recent to join the original membership of Brazil, Russia, India and China, since South Africa was added in 2010.
It’s also been reported that more than 20 Global South nations had formally requested to join ahead of the Summit.
“We have consensus on the first phase of this expansion process and other phases will follow,” Mr Ramaphosa affirmed. He said that agreement had also been reached on overhauling the global financial architecture and key institutions, which he said would make the world more equitable, inclusive and representative.
Broader membership, greater global clout
Although President Vladimir Putin didn’t attend the Summit, he spoke by video link. According to the Kremlin, he had been in touch with Iran’s President Ebrahim Raisi earlier in August about Tehran’s application to join BRICS.
BRICS countries currently account for around 40% of the world’s population – along with one quarter of global gross domestic product. China believes that a broadening of BRICS membership would bring greater influence.
“If we expand BRICS to account for a similar portion of world GDP as the G7, then our collective voice in the world will grow stronger,” a Chinese official was quoted as saying.
However, before the Summit, New Delhi clashed with Beijing over the expansion plans. It is understood that India sees BRICS as a non-aligned club for the economic interests of developing countries. China, on the other hand, wants the group to exert itself politically and openly challenge the west.
Although South Africa’s foreign minister said it was “extremely wrong” to see BRICS expansion as an anti-western move, if countries such as Iran, Belarus and Venezuela are granted membership, in the eyes of western capitals, this would embolden the China/Russia axis.
And whilst the likes of Saudi Arabia, the UAE and Egypt had ambitions for global governance and saw “membership as a way of exercising leadership and achieving their global ambition”, this didn’t mean they were about to abandon their strategic security partnership with the US, according to Hasan Alhasan, Research Fellow for Middle East Policy at the Bahrain-based International Institute for Strategic Studies.
Instead, they were “building coalitions on an issue-by-issue basis depending on where their national interests are,” he said.
Emergence of non-dollar currencies
Nevertheless, BRICS opening its doors to some of the world’ largest energy producers, like Saudi Arabia and Iran, would provide the bloc with expansive economic clout and enable trading to take place in currencies away from the US dollar.
According to Bloomberg Economics, an enlarged BRICS with more say in global affairs, could alter the way the global economy currently operates.
“The expanded BRICS-11 is a less coherent group — some are going through crises, others are thriving. This could signal an expansion of the agenda beyond economics,” said Ziad Daoud, Bloomberg Economics chief merging market economist.
BRICS expansion was driven by the desire to build an alternative to an international system centred on US hegemony, observed Hasnain Malik, a strategist at Dubai-based Tellimer.
“A distinction should be drawn between the use of the US dollar as a trading currency, which may erode as many seek an alternative, and as a reserve currency, which almost no other country or group of countries have the size, institutional credibility and freely convertible characteristics, to rival,” said Malik.
China would have backing from Russia and South Africa for an enlarged bloc, whilst India and Brazil appear more guarded about alienating the West, thus providing a mouthpiece for the Chinese.
However, Charlie Robertson, head of macro strategy at FIM Partners, the emerging market investment firm, commented that BRICS had “done little since its formation in 2009-10” and he didn’t “expect that to markedly change.”
But he said that the New Development Bank (NDB) had been “a meaningful BRICS creation” and that NDB membership mattered. “Whether it is Saudi or UAE injecting capital, or Egypt, Argentina, Ethiopia and probably Iran drawing on that capital, the bank has been a welcome addition to the global financial architecture,” he said.
Summit Commitments
Meanwhile, the Summit declaration reiterated “our commitment to enhancing and improving global governance by promoting a more agile, effective, efficient, representative, democratic and accountable international and multilateral system.”
It committed “to strengthening the framework of mutually beneficial BRICS cooperation under the three pillars of political and security, economic and financial, and cultural and people-to-people cooperation.”
And it further called for greater representation of emerging markets and developing countries, in international organisations and multilateral fora in which they played an important role.
The next BRICS Summit will be staged in the Russian city of Kazan in 2024.
China’s Xi calls for accelerated BRICS expansion | Reuters
China urges Brics to become geopolitical rival to G7 | Financial Times (ft.com)
BRICS Asks Saudi Arabia, Iran, UAE, Egypt, Argentina, Ethiopia to Join Bloc – Bloomberg
