BRICS Has Expanded So What Is Next?

By Dr. Srinivas Junuguru and Abhinaya Rayee

The BRICS group, initially comprising Brazil, Russia, India, and China, emerged as a forum for discussion and policy cooperation among key rising market nations. Over time, it transformed into a transregional governance framework with the addition of South Africa in 2010, aiming for comprehensive goals in political, security, economic, and social aspects. The BRIC nations are projected to become the world’s most powerful economies, with their combined GDP growing significantly over the years.

The BRICS expansion policy gained momentum after the 14th Summit, with discussions on widening networks and collaboration. However, the geopolitical landscape, including Russia’s invasion of Ukraine, territorial disputes in the South China Sea, and challenges in the Indo-Pacific region, poses obstacles to the alliance’s three most powerful nations – China, India, and Russia. However, after a lull five countries Saudi Arabia, Egypt, UAE, Iran and Ethiopia have joined formally on January 1st, 2024.

Background

The formation of BRICS, initially conceptualized by Jim O’Neill of Goldman Sachs in 2001, began with the identification of four key emerging economies—Brazil, Russia, India, and China (BRIC). The pivotal moment came during the Doha Round in Cancun, Mexico, in September 2003, when these economies, along with South Africa later on, rejected a joint proposal by the US and the EU at the World Trade Organization. The first summit of BRIC leaders in July 2006 at the G8 Outreach Summit in St. Petersburg, Russia, marked the foundation of the BRICS interregional organization. Subsequent events, including the Foreign Ministers’ Meeting in New York in September 2006 and the first BRICS summit in Yekaterinburg, Russia, in June 2009, solidified its position as a crucial international organization. The global financial crisis of 2008 played a significant role in shaping BRICS, influencing its establishment and prompting the inclusion of South Africa in 2010, leading to the transformation from BRIC to BRICS.

The rise of BRICS as a group of influential “new powers” post-2008 drew both skepticism and hope, challenging US-led Western hegemony and altering the global balance of power. Leaders like Hu Jintao praised BRICS as a force for world peace, protecting and supporting developing nations. The group’s key objectives include challenging US hegemony and representing the interests of the developing world. BRICS has become a prominent factor in global geopolitics, with the potential to structurally impact the global system. As an interregional organization extending beyond conventional definitions, it encompasses regions where Eurasia, Asia, Latin America, and Africa converge, emphasizing a mixed interregional grouping from the Third World and transcending traditional boundaries in global governance.

Expansion and De- Dollarisation:

During the 15th BRICS summit in Johannesburg, the existing five-member BRICS group invited six new countries—Iran, Saudi Arabia, the United Arab Emirates (UAE), Egypt, Ethiopia, and Argentina. This expansion is seen as a significant step in shaping the future of international relations, promoting multipolarity, strategic autonomy, and economic cooperation. The inclusion of Saudi Arabia, Iran, and the UAE in BRICS prompts discussions on potential shifts away from the dollar in trade, with examples like Brazil suggesting Argentina pay in renminbi. However, while the expansion adds new dimensions to the de-dollarization debate, that the de-dollarization is not that easy due to the internal conflicts of the BRICS countries.It’s noted that only 15% of global trade is energy-related, and the transition to a multi-polar world currency system may take a decade. In terms of global trade impact, the new invitees marginally increase BRICS’ overall weight, with expanding trade relations reflecting growing economic interdependence.

Regional Developments:Shaping BRICS Expansion

Recent regional developments have played a pivotal role in shaping the expansion of BRICS membership, particularly with the notable involvement of Saudi Arabia and the UAE. Since 2020, both nations have shifted towards more independent foreign policies, prioritizing sovereign decision-making aligned with their national interests, thereby influencing their global geopolitical engagement. A significant milestone was reached when Saudi Arabia ended the blockade on Qatar in January 2021, indicating a transformative period in the Gulf region characterized by a commitment to resolving local conflicts and fostering improved cooperation among neighboring nations. The UAE’s pursuit of an expanded maritime presence in strategic areas and the normalization of relations with Iran further contribute to regional dynamics, presenting opportunities for economic collaboration and impacting the BRICS grouping. Iran’s potential entry into BRICS holds the promise of enhanced economic cooperation and renewed connectivity initiatives, such as those involving India’s Chabahar port. These developments collectively underscore the evolving geopolitical landscape and its far-reaching consequences for collaborative efforts among nations.

Expansion & Implications:

The recent BRICS summit in Johannesburg marked a significant expansion of the group, including six new countries: Argentina, UAE, Iran, Saudi Arabia, Ethiopia, and Egypt. This move reflects BRICS challenging the economic dominance of the West, with its GDP share in the world economy expected to rise from 20.51% in 2011 to 26.62% by 2023. The enlarged group now constitutes 46% of the world’s population and 29.6% of the world’s GDP. BRICS aims to defend the interests of developing nations amid attempts by developed nations to impose their standards. With the potential for a new reserve currency, discussions within BRICS on settling international trade in local currencies are ongoing, challenging the dollar’s monopoly. The growth of BRICS is fostering a multi-polar world, creating opportunities for closer ties and collaboration between developing nations. However, concerns persist about the group’s cohesion, given the diverse allegiances of its members, particularly amid tense relations between India and China.

BRICS, a grouping of developing nations, initially focused on economic cooperation, has evolved into a significant player in global politics. The organization’s opposition to Western hegemony and its pursuit of reforms align with the national interests of its members. With substantial contributions to global GDP, strategic placement, and influence in international trade and security, BRICS plays a crucial role. Plans to expand BRICS membership involve nations like Argentina and Iran, signaling the potential to strengthen its global influence. However, challenges include the lack of a formal charter for admitting new members and existing conflicts, such as those between China and India, which may hinder the organization’s development. A collaborative approach between major members is crucial for BRICS to overcome internal conflicts and achieve its objectives. Russian federation has taken over the BRICS presidency for 2024 from South Africa and that will be a game changing incident in contemporary international relations.

Dr. Srinivas Junuguru, Associate Professor, Woxsen School of Liberal Arts and Humanities, Woxsen University, Hyderabad, Telangana.

Abhinaya Rayee, Woxsen School of Liberal Arts and Humanities, Woxsen University, Hyderabad, Telangana.

Source: moderndiplomacy.eu