BRICS; The Growing Alternative

An Expanding BRICS Marks The Global South’s Coming of Age

 At the beginning of 2024, a major – but frequently under-reported and under-estimated – international organisation, the BRICS, will double its number of members.  Adding Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates to the current members Brazil, Russia, India, China and South Africa, this expansion will signify a major new phase for what is arguably the developing world’s foremost multilateral organisation. 

It will also add greater credence to the group’s demands for a more equitable and representative world, as well as indicating “wide-ranging global south support for a recalibration of the global order”.

Already representing around 42% of total global GDP and about 27% of global territory, this expansion will increase the economic power for the grouping. 

It will also advance the cause of the Global South across the world, as well as the diplomatic allure of its existing members as being capable of asserting their collective influence and clout.  14 other countries (Algeria, Bahrain, Banglasedh, Belarus, Bolivia, Cuba, Honduras, Kazakhstan, Kuwait, Palestine, Sengal, Thailand, Venezuela and Vietnam) have further formally applied for membership, with many others expressing an interest, signifying that this expansion is the first of many to come.  All BRICS countries must however agree to any accession, with Indonesia being turned down.

 Seeking a Genuine and Respected Voice

With origins dating from the aftermath of the 2008 global financial crisis, the first BRI C Summit was held in Yekaterinburg in Russia.  South Africa then joined in 2011, making BRIC into BRICS.  Most of them were experiencing a slow change in their status from developing into proto-developed entities.  This evolution was difficult for existing bodies such as the World Trade Organisation (WTO), International Monetary Fund (IMF), the United Nations Security Council (UNSC) and many others to fully grasp and respond to.  As a result, there was a disconnect between the BRICS’s ambitions and existing western-dominated architectures.

Added to these dynamics, which are again echoed by the latest cohort of new members, was a sense that the unrepresentativeness of global institutions bred a degree of reliance that reduced the autonomy of these countries.

In addition, the economic chaos of the 2008 global financial crisis, as well as the inadequate structural response to it, fed a perception that the West was not the best custodian of these developing - and quickly expanding - economies.

The BRICS’ New Development Bank – as an alternative to the World Bank and the IMF – explicitly underlines this ethos, whereby the Global South can foster its own development needs and direction outside of the often-unequal development strategies propagated by the West. 

Its central aim is to transfer knowledge, technology, and capital between developing countries, as well as to expand mutual trade routes and markets, and ensure energy security. 

 Breaking the inequities of North-South cooperation that was based upon aid and assistance, the BRICS’ South-South model is centred upon sustainable and collective growth.  This is the key mantra of the New Development Bank, which as of June 2023 had lent around $33 billion to 96 development projects compared with some $67 billion lent by the World Bank.  Such figures are remarkable given that the New Development Bank was only established in 2013.

Building from their economic influence, BRICS countries have evolved their diplomatic impact to include advocating for increased involvement in global security issues. 

Such an outlook includes issues such as transnational terrorism, cyber security and how to respond to climate change, and recognises the different challenges - and responsibilities - of developing and developed economies.  

A particular de-emphasis upon military power – in marked contrast with the current world order and its leadership under the aegis of the United States – also seeks a more cooperative and multilateral approach that rejects alliances and opposing blocs.

 BRICS Phase Two

 The BRICS' forthcoming expansion activities presents a clear challenge – if not potential threat – to the dominant financial organisations of the Western world order.  

With its economic size already tilting towards half of all global GDP and now involving some of the world’s oil and gas producers, a new centre of power is being established in global affairs. 

The latest expansion also signals a shifting of influence away from the West.  That the political basis of BRICS members is highly mixed in nature – including mature democracies and openly autocratic regimes – makes the grouping ever more attractive but also difficult to respond to. 

The ascent of new countries to the BRICS in January 2024 is a clear validation of the grouping that will foster and accelerate economic interlinkages between members.  It will also enhance the BRICS’ geographic and demographic diversity across the world’s emerging markets, which will make the grouping ever-more representative, valid and pertinent within global affairs.  The different motivations of these new members also point to its multifaceted magnetism, whereby the BRICS can appeal to countries in a range of development and diplomatic ways. 

Emblematic of this appeal, Argentina is pursuing membership to assuage a severe internal economic crisis, and “to open up our possibilities of joining new markets, of consolidating existing markets, of raising investment coming in, of creating jobs and raising imports”.  Doing so will also provide the country with an alternative to traditional Western economic solutions that historically have often been disastrous.  In turn, Egypt desires to leverage its geographic position to enhance its cross-border trade and infrastructure projects, and global influence.

Similarly, Ethiopia as one of the fastest-growing economies in Africa seeks greater access to capital, expertise, and experience necessary for its sustainable – as well as infrastructure – development.  Iran and Saudi Arabi can benefit in the same fashion but can also diversify their external energy markets, especially Tehran which is impacted by Western sanctions. 

Both can further use the BRICS as an additional platform to advance their foreign policy goals.  The United Arab Emirates is drawn to the BRICS as a way to foster collaboration in the areas of technology transfer, clean energy, infrastructure development and investment promotion.

 Keeping All Options – and Currencies – Open

 Besides these mutually reinforcing and mutually beneficial factors, joining the BRICS is also about all these countries – members new and old – hedging their strategic choices in the global arena. 

In the face of a rapidly rising China and India, and a stalling US and EU, the future of the international system is uncertain.  It is – according to Josep Borrell (the EU’s top diplomat) “so unstable” – or in the words of Antonio Guterres (the UN’s Secretary-General) in danger of a “great fracture”.  Overall, as Iran’s President stated in September, “the world is transitioning into a novel international order” whose final shape remains largely unknown.

 Joining the BRICS is however not a wild bet that has little chance of bearing diplomatic fruit. 

Apart from involving two Asian behemoths – China and India – who look set to dominate the Asian 21st Century, as well as a host of leading regional powers, the ambition of the grouping is what is its real hallmark. 

The major headline here are plans by the BRICS to develop its own currency that would be truly international in nature, whereby it would not be controlled by a single country or a single nation-based central bank, or limited to a specific geographic locale. 

Doing so would also hugely reduce their trade dependence upon the US dollar, euro or yen.

Such a reserve currency – potentially called the R5 or the R5+ - could mark the slow erosion of the US dollar’s dominance, with one economic observer stating that “it'd be like a new union of up-and-coming discontents who, on the scale of GDP, now collectively outweigh not only the reigning hegemon, the United States, but the entire G-7 weight class put together”. 

It would also enhance economic integration among BRICS members and reduce any economic shockwaves emanating from the US and the West in the event of recessions or depressions. 

 When the next GFC-type mega-meltdown comes, the R5 would thus protect the BRICS and could be the deciding factor that signals the demise of the Global North and the Global South’s rise.

 Views expressed in this article are those of the author.

This article has previously appeared in German publication Makroskop

It appears here with permission and is available for republication by NZ-based media. 

- Asia Media Centre