The BRICS alliance, initially established by Brazil, Russia, India, and China and later added South Africa in 2010, stated its plan to integrate six more countries into their ranks, significantly enhancing its worldwide impact. Many perceive this enlargement as a tactical step, especially by leading members China and Russia, to neutralize the dominion led by the United States and Europe.
- New members: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates.
- Currently: The broadened coalition of 11 nations signifies close to 3.7 billion of the global population.
Economic Implications and Intent
The expansion isn’t merely a political gesture. The addition of Saudi Arabia and the UAE notably provides a significant financial boost, especially as BRICS aims to enhance its development bank’s influence and size. With China being the dominant financial force in the group, this inclusion also serves to solidify its position amidst growing economic challenges, notably its “no-limits partnership” with Russia and indirect support for the latter’s Ukraine invasion.
Shift from USD: One of the primary economic goals is to encourage trade between member countries using local currencies rather than the US dollar. Such a move could significantly dilute the dollar’s hegemony in global trade. India has already taken steps in this direction by signing an agreement to trade in Indian rupees with the UAE.
The decision to induct several nations from the Middle East has important geostrategic implications. This change can be seen as BRICS move to focus more on the Middle East policies, with particular emphasis on China and India strengthening their existing relations in the region. Recent developments like China playing a pivotal role in re-establishing ties between former rivals Saudi Arabia and Iran underline this shifting power balance.
Challenges Within the Group
While the expansion marks a significant milestone for BRICS, it doesn’t come without its set of challenges. The group’s diverse nature means there’s a mix of democracies, authoritarian states, and autocracies, making political coherence a potential issue.
Internal Dynamics: Iran’s inclusion, a firm supporter of Russia’s actions in Ukraine, has been met with some skepticism, considering it might escalate tensions with Western powers. Similarly, India and Brazil, which want to maintain their independent foreign policies, might find this expansion challenging.
Economic Concerns: Both Russia and China are experiencing economic setbacks, with China grappling with internal issues like a real estate scandal and unexpected political upheavals.
While many see this expansion as a historic step, there are still lingering questions about BRICS’ future direction. The group’s failure to introduce its currency and the absence of significant figures like President Vladimir V. Putin of Russia from the summit raise questions about its effectiveness. However, as Jim O’Neill, the person who coined the term BRIC, mentioned, the true impact of such meetings might be more symbolic than substantial.
The BRICS expansion, marked by the inclusion of six influential nations, underlines the group’s ambition to reshape global financial and governance systems. However, with varying political stances, economic challenges, and the overarching goal to reduce dependency on the US dollar, the road ahead for this coalition promises to be one of immense change, potential, and challenges.