The 15th BRICS Summit was held in Johannesburg, South Africa, from August 22 to 24, 2023. It was attended by the five main BRICS members, i.e., Brazil, Russia, India, China, and South Africa. During the summit, the expansion of BRICS took place to include six more countries, i.e., Saudi Arabia, the United Arab Emirates (UAE), Iran, Egypt, Ethiopia, and Argentina. On January 1, 2024, Egypt, Ethiopia, Iran, and the UAE officially joined the bloc. Saudi Arabia joined later; however, Argentina withdrew its planned entry into expanding BRICS club of nation in December 2023. The expansion of BRICS has led to a group with global significance. This is because the group now constitutes a considerable proportion of GDP, world’s population, exports and imports.
About BRICS
BRICS stands for Brazil, Russia, India, China, and South Africa, which are the major emerging economies of the world. It is basically the association of these economies. In 2001, the term ‘BRIC’ was coined by Jim O’Neill, the British Economist, referring to the emerging economies of Brazil, Russia, India, and China. In 2006, the group officially came into existence when the BRIC foreign ministers met for the first time. Later in 2010, South Africa got the invitation to join the group; hence, the name was changed to BRICS.
Under BRICS, there are five largest developing economies of the world, constituting 41 per cent of the total population of the world, 24 per cent of the total gross domestic product (GDP) of the world, and 16 per cent of the total trade across the world based on 2019 World Bank data.
Every year, the forum is headed by a different member country depending on the order of the acronym, BRICS. In 2021, India held its chairmanship.
BRICS Initiatives
New Development Bank (NDB) In 2014, the 6th BRICS Summit was held in Brazil. At that time, an agreement was signed by BRICS members regarding the establishment of the NDB in Shanghai, China. Around 96 infrastructure and sustainable development projects, worth US$ 33 billion, have been funded by the bank.
Contingent Reserve Arrangement (CRA) In the same year, a treaty was signed by the governments of member countries regarding establishing the CRA. The CRA focuses on assisting BRICS nations that deal with the pressures of short-term balance of payments. Thus, it can facilitate mutual support and consolidate the financial stability of the BRICS member countries.
Customs agreements BRICS members signed the customs agreements for facilitating trade transport between them.
Remote sensing satellite In mid-2021, an agreement regarding ‘Cooperation on BRICS Remote Sensing Satellite Constellation’ was signed by the five space agencies. This constellation consists of six existing satellites that have already been launched and are operational. These include CBERS-4, which was developed by Brazil and China together; Gaofen-6 and ZiYuan-III 02, which were built by China; Kanopus-V type, which was built by Russia; and Resourcesat-2 and-2A, which were built by India. The agreement facilitates the socio-economic growth of the BRICS members by regulating the remote sensing sharing mechanism. It also helps in tackling common issues, including disaster relief, climate change, and environmental protection.
BRICS payment system An attempt is being made by the BRICS member countries to develop a new payment system that will replace the SWIFT (Society for Worldwide Interbank Financial Telecommunications) payment system. This is quite urgent as Russia has been eliminated from SWIFT due to the Russia-Ukraine War.
Need for the Expansion of BRICS
The international institutions, including the International Monetary Fund (IMF), the United Nations (UN), the World Bank (WB), etc., headed by the West have created discontentment among the BRICS members. The expansion of BRICS is required to be free from the world order headed by the western countries.
The need for the expansion of BRICS includes the following:
Enhancing global influence and representation BRICS was conceived as a counterbalance to the dominance of western-led institutions like the IMF and the WB. Expanding BRICS to include additional emerging economies would enhance its global influence, making it a more formidable bloc that can better advocate for the interests of developing nations. With a larger membership, BRICS would have a stronger voice in global governance, pushing for reforms in international institutions to ensure more equitable representation.
Promoting South-South Cooperation The expansion of BRICS would foster greater South-South cooperation, which is crucial for addressing the unique challenges faced by developing countries. By bringing together a more diverse group of economies, BRICS could facilitate the sharing of best practices, resources, and technology, among member states. This would strengthen economic ties and lead to more collaborative efforts in areas such as infrastructure development, poverty reduction, and climate change mitigation.
Economic diversification and resilience Including additional countries in BRICS would contribute to economic diversification within the bloc. The current BRICS members have distinct economic strengths, such as China’s manufacturing prowess, India’s IT and services sector, and Russia’s energy resources. Adding new members with complementary economic profiles would enhance the bloc’s overall resilience, enabling it to better withstand global economic shocks and fluctuations.
Addressing global imbalances The global economic landscape is increasingly becoming multipolar, with emerging economies playing a more significant role in global trade and investment. However, many of these economies remain underrepresented in global decision-making forums. Expanding BRICS would help address these imbalances by providing a platform for a broader range of emerging economies to collaborate and influence global economic policies.
BRICS member countries focus on reducing the dependence on global currencies such as the US dollar and highlighting the importance of using local currencies while carrying out internal trade and financial transactions with one another as well as with other trading partners, i.e., international transactions.
Besides, the member countries look for more just and fairer world order. This is clearly stated in the Johannesburg Declaration. It is mentioned in the Declaration that the BRICS members advocate ‘strategic partnership’ which lays emphasis on a more representative and fairer world order. The Johannesburg Declaration stresses on cooperation and collaboration among the BRICS member countries and with other developing nations. It encourages using local currencies while conducting trade and financial transactions between BRICS nations as well as other trading partners. In addition, it includes common views and opinions of BRICS members regarding different political matters, such as the conflict in Ukraine, regional issues in West Asia, global terrorism, the Iran nuclear agreement, and the relevance of the United Nations.
Implications of the Expansion of BRICS
Greater economic influence Currently, there is significant collective economic power with the BRICS member countries. With the expansion of BRICS, its economic influence has further enhanced. The group now consists of considerable share of global population, GDP, energy production, and global trade.
Increased investment and trade opportunities Expanding BRICS would create new opportunities for investment and trade among member states. By reducing trade barriers and fostering closer economic ties, the bloc could stimulate economic growth and development in participating countries. Additionally, the NDB, established by BRICS to finance infrastructure and sustainable development projects, could play a pivotal role in supporting the economic integration of new members.
Enhanced technological and scientific collaboration The inclusion of new members in BRICS would pave the way for greater technological and scientific collaboration. Many emerging economies possess unique expertise in areas such as renewable energy, biotechnology, and digital innovation. By pooling resources and knowledge, BRICS members could accelerate technological advancements and address common challenges, such as food security, health care, and environmental sustainability.
Cultural exchange and people-to-people ties BRICS expansion would also promote cultural exchange and strengthen people-to-people ties among member countries. Increased interaction through educational exchanges, tourism, and cultural programmes would foster mutual understanding and respect among diverse populations. This could lead to deeper socio-cultural integration and a stronger sense of shared identity within the BRICS community.
Shift in global power dynamics The expansion of BRICS would signal a shift in global power dynamics, reflecting the increasing influence of emerging economies in global affairs. As BRICS expands, it could challenge the dominance of traditional West-led institutions and promote a more multipolar world order. This could lead to a rebalancing of global economic and political power, with greater representation and participation of developing countries in global decision-making processes.
Impact on global governance reforms BRICS has long advocated for reforms in global governance institutions, such as the UN, the IMF, and the WB to make them more representative of the current global order. An expanded BRICS would have a stronger mandate to push for these reforms, potentially leading to greater inclusivity and fairness in global governance. This could also encourage the establishment of alternative institutions and frameworks that better reflect the interests of developing countries.
Increased geo-strategic significance The new BRICS members have their own geo-strategic value. Out of the total oil production of Saudi Arabia, 35 per cent is exported to India and China. Russia also exports majority of its oil to these countries. Now, Russia is considering Brazil as its new market. Despite the sanctions imposed by the USA, there has been an increment in oil production in Iran, i.e., from 4,00,000 barrels per day to 2.2 million barrels per day in 2023. Most of this oil is exported to China. Besides, the African countries such as Egypt and Ethiopia are significant due to their location in the strategically important Horn of Africa and the Red Sea region.
Impact on energy sector The energy sector will be greatly impacted by the expansion of BRICS. Mainly the global oil production and consumption will have far greater impact. This is because the majority of total oil production in the world will be made by the BRICS countries. Consequently, they will be significant in international energy markets. Thus, they will be influential in framing energy policies and altering energy markets.
Impact on the existing political and economic framework Considering the new BRICS members, the current political and economic framework will be impacted in the following ways:
Independent foreign policies Out of new BRICS members, Saudi Arabia and the UAE have their distinct foreign policies, not influenced by the USA. Saudi Arabia followed de-escalation. It got involved in discussion and regional diplomacy, such as trading with Iran and removing the restriction on Qatar. The UAE, too, plans to increase its maritime influence in several places, such as the Red Sea, the Gulf, the Horn of Africa, and the Gulf of Aden. Its relations with Iran have become normal.
Economic cooperation Regional economic cooperation will be increased, considering Iran as a BRICS member and its importance in energy sector. Besides, North-South connectivity projects can be revived, such as the one related to India via the Chabahar port in Iran.
China-brokered accord China plays an important role in promoting regional diplomacy through China-brokered accord between Iran and Saudi Arabia. This accord was made in 2023 due to regional engagements.
No binary divide The BRICS members are against the new global binary divide (or a new cold war). Instead, they promote strategic autonomy within the world order that is bipolar. The global leaders should listen to the voices of BRICS members and consider their interests while making any decisions affecting the nations around the world.
India and BRICS
BRICS plays a significant role for India by assisting the country in achieving its foreign policy objectives and economic interests. The importance of BRICS for India is described below:
Managing Indo-China relations With the help of BRICS, India and China can keep their strategic contest separate from other areas where they can cooperate with each other. Thus, BRICS acts as a common platform where India and China can facilitate dialogue and collaboration on common areas of interests. This will in turn help them in maintaining other dimensions of their relationship, thereby keeping strategic tensions aside.
Economic and trade opportunities As a part of BRICS, India can seek for economic and trade opportunities among the member nations, such as the important market of China. In spite of security tensions between China and India, China continues to be a major trading partner for India. Growth and better engagement opportunities are provided by Intra-BRICS trade.
Multi-aligned foreign policy India’s increasing partnerships with the West are balanced with the help of BRICS. India’s adherence to a multi-aligned foreign policy and strategic autonomy is reflected through its BRICS (i.e., a non-Western grouping) membership. In this way, India can focus on its own interests while dealing with both Western and non-Western groupings.
Gaining an international status As a member of BRICS, India’s status has been raised, demonstrating India as an emerging international player. Now, India can collaborate with other emerging economies of the world and participate in decision-making processes at an international level. BRICS enables India to become prominent in the international arena.
Criticism against BRICS
No concrete action and few accomplishments The critics view BRICS as a platform for dialogue and discussions only. The organisation has not taken any concrete steps. Nor has it produced any substantial results.
No proper shared vision There is no proper shared vision for BRICS member nations. That is, its member nations are not adopting unanimous and consistent approach in dealing with global issues. They have also been criticised for not striving to achieve common objectives.
No significant achievement so far There has been no significant achievement on the part of BRICS to justify its purpose. The efforts of its member nations have not turned fruitful yet to leave a lasting impression on the world. Nor have they succeeded in tackling global issues efficiently.
In response to this, the BRICS members have thrown light on their mutual declarations that they have issued regularly since its establishment. They have even extended their scope of cooperation and interest.
Conclusion
The expansion of BRICS presents both opportunities and challenges. While it offers the potential for greater global influence, enhanced economic cooperation, and a stronger voice for developing countries, it also raises concerns about divergent interests, geopolitical tensions, and the risk of overextension. To realise the full benefits of expansion, BRICS must carefully manage these challenges, ensuring that it remains a cohesive and effective bloc. Despite being the object of criticism, BRICS is gradually making its place in global politics. As the global landscape continues to evolve, the expansion of BRICS could play a crucial role in shaping a more inclusive, equitable, and multipolar world order.
© Spectrum Books Pvt. Ltd.
