The BRICS (Brazil, Russia, India, China, and South Africa) economic bloc is set to expand with the admission of six new countries: Argentina, Ethiopia, Iran, Saudi Arabia, Egypt, and the United Arab Emirates.
This expansion aims to enhance the economic heft and global influence of the BRICS bloc, countering the influence of the US and Western allies. The expansion is significant in terms of increasing trade share and political representation for member nations. This move holds potential benefits for India, with its increasing dominance in the group.
The expansion also raises questions about the group’s political ambition and its ability to represent the interests of the Global South effectively
BRICS expansion could be the real deal
The acronym BRICS was coined by British economist Jim O’Neill to emphasize emerging investment opportunities rather than geopolitical goals. The establishment in 2014, which later included South Africa, was primarily focused on economic engagement. The subsequent additions, while hinting at greater ambitions, may be diverting the bloc’s focus away from its initial purpose.
On paper, the expansion of BRICS appears optimistic, but it entails inherent complexities. The decision-making process within such a diverse group is inevitably fraught with difficulties. Prior to this expansion, the bloc had to contend with divergent foreign policy and economic objectives. The inclusion of nations with diverse economies and geopolitical stances has the potential to exacerbate these problems.
India’s evolving relationship with the West and its well-documented conflicts with China are only two examples of the group’s disagreements. Moreover, while the intention to expand BRICS is clear, and multiple countries have expressed interest, the bloc’s vision remains unclear. This lack of clarity threatens the group’s ability to attain unity and influence.
In an attempt to reshape the global world order and provide a counterweight to the United States and its allies, the BRICS group has announced the admission of six new members.
Iran, Saudi Arabia, Egypt, Argentina, the United Arab Emirates, and Ethiopia will join the current five members – Brazil, Russia, India, China, and South Africa – at the start of the following year, it was announced at a summit in Johannesburg on Thursday. President Xi Jinping of China referred to the expansion as “historic.”
In 2023, the six founding members of BRICS are projected to have a combined GDP of $27.6 trillion, representing 26.3% of the global total. With the addition of the new members, the anticipated GDP rises marginally to $30,8 trillion, enough for a 29.3% share of the global market.
The BRICS alliance has consistently comprised a significant proportion of the world population, primarily due to the inclusion of China and India, the only two nations with populations over one billion individuals.
The BRICS alliance is seeing significant population growth mostly due to the inclusion of Ethiopia, with a population of 126.5 million, and Egypt, with a population of 112.7 million.
Will BRICS attain de-dollarization?
The BRICS’ own New Development Bank, founded to compete with Western organizations such as the IMF, continues to rely significantly on the US dollar. Despite claims of “de-dollarization,” there is a huge gap between expectations and reality. For such a shift to occur, the whole financial ecosystem, which has relied on the US dollar for decades, would have to undergo a radical shift.
While some countries of the bloc, such as Russia, have begun trading in alternative currencies, a complete transformation appears to be a long way off. Although the integration of wealthy oil nations provides financial assets, a unified economic plan entails more than just money input. Cohesion necessitates a shared vision, purpose, and compatible economic strategies, which BRICS has historically struggled to achieve.
As BRICS shows signs of rapid expansion, the problems that come with such progress must not be overlooked. While prospective supremacy in the global commodities market is substantial, it does not inherently imply geopolitical significance or a rapid abandonment of the US currency. Many of these countries have substantial economic ties to the West, making a rapid separation difficult and perhaps damaging to their own economies.
Furthermore, while there is a noticeable public interest in commodities, as indicated by increased Google searches, this does not always correlate with a genuine understanding or willingness to depart from current trade rules. A haste to change global economic institutions without solid strategies can result in economic uncertainty.
With its expanded membership, the BRICS bloc has the potential to reshape global economic discourse. However, this potential is offset by inherent challenges stemming from member nations’ diverse economic objectives, geopolitical connections, and historical conflicts.
To genuinely challenge Western dominance and the dominance of the US dollar, BRICS will need more than expansion; it will also need cohesion, a clear vision, and time.
As reported by Reuters, a considerable number of more than 40 nations have demonstrated their inclination towards becoming members of the BRICS alliance. A subset of 16 nations has formally submitted applications for membership, including Algeria, Cuba, Indonesia, Palestine, and Vietnam.
