BRICS Expansion

BRICS has extended formal invitations to Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates, marking a significant expansion effort for the alliance.

During the 15th summit of BRICS on August 24, Cyril Ramaphosa, the President of South Africa and the current BRICS chair, delivered a speech inviting these six nations to join the group. Their membership will become effective on January 1, 2024.

This expansion increases BRICS’ representation to nearly half of the global population and includes three top oil-producing countries: Saudi Arabia, the UAE, and Iran.
The inclusion of Iran, currently experiencing strained relations with the West, appears to be influenced by China and Russia.
The grouping now remarkably includes regional rivals, Saudi Arabia and Iran. China, the largest buyer of Saudi oil, recently brokered a peace deal between the two.
Saudi Arabia, though traditionally a US ally, has been making independent strides, and its BRICS membership aligns with this direction.
For Iran and Russia, the new membership serves as a symbol of their global alliances, despite Western tensions.
Both Egypt and Ethiopia, countries with established US connections, are part of the new inclusions.
Argentina, amidst an economic crisis, anticipates financial assistance from BRICS membership.

Points To Remember

BRICS established the New Development Bank in 2014 with a starting capital of $50 billion, offering a viable alternative to the IMF.
The New Development Bank (NDB), founded by the BRICS group of nations, aims to expand its membership to bolster capital and mitigate the dominance of Western-led multilateral banks. This strategic move will enhance its financial influence while upholding its core mission.
The bank seeks to enhance its membership diversity with regard to geographic representation, developmental stages, and country size.
At the May 2023 annual meeting in Shanghai, NDB made an announcement regarding ongoing discussions with Saudi Arabia about potential membership in the bank. This development has the potential to significantly bolster the financial strength of the lender.
The New Development Bank (NDB), open to all United Nations member countries, has been consistently increasing its membership.
In 2021, Bangladesh, the United Arab Emirates, and Uruguay joined, while Egypt became a member in February 2023, further strengthening the multilateral bank’s global presence.
In a clear effort to expedite the global de-dollarisation of the economy, NDB is set to increase its financing of projects using local currencies.
The bloc is evolving beyond just an economic alliance and aims to represent the voice of the global south.
Numerous Middle Eastern and African countries have shown interest in joining BRICS, recognising the potential benefits offered by it.
Approximately 20 nations, including Saudi Arabia, UAE, Egypt, Kazakhstan, Algeria, Argentina, Mexico, Nigeria, Bangladesh, Iran, Venezuela, Syria, and Indonesia, are seeking membership.
The inclusion of countries like Iran, Syria, and Venezuela could potentially tilt the bloc towards an anti-Western position.

China, Russia Want To Turn BRICS Into An Ant-West Front

It is widely reported that China is the main force behind the idea of expanding BRICS. Its expansion plan is mainly aimed at de-dollarisation and transforming the group into an anti-West front.

China’s ambition to replace the U.S. dollar as the global reserve currency is seen as a strategic move, with the BRICS bloc as its launching pad. However, India, Brazil, and South Africa have expressed reservations about the potential for China’s dominance.
China, undeterred by the need to maintain BRICS exclusivity, has been promoting the “BRICS Plus” concept since 2017. This strategy aims to incorporate new members to grow its influence, with Russia also showing interest in this expansion following its conflict with Ukraine.
China’s motivation to expand the BRICS group into a BRICS Plus framework stems from its ambition to shape the group into a China-centric bloc.
This expansion is seen as an opportunity for China to entangle new members with loans under its Belt and Road Initiative.
Utilising the resources of the New Development Bank, China, with Russia’s implicit support, is steering BRICS towards a larger group that opposes the U.S.-centred worldview and instead follows Chinese-led international institution norms.
If China succeeds, BRICS may transform into a platform for anti-U.S. activism, potentially jeopardising its ability to provide tangible benefits to various developing countries.
China wants to use the expanded BRICS group as a platform to export its manufactured goods, especially as its Western markets are contracting.
The expansion is seen as a strategic move to demonstrate to the West that China is a leader of the Global South.
China’s perception of the deteriorating economic performance of Brazil, Russia, and South Africa, along with Russia’s complications with the Ukraine war, and India’s growing proximity to the US-led groupings, motivates its push for an expanded BRICS.
The expansion is viewed as a necessity to maintain and enhance the global influence of BRICS, which China fears may wane without the inclusion of big developing countries.

Expanding BRICS: Perspectives From Other Member Countries

Russia is endorsing the expansion of BRICS as a strategic move against Western efforts to isolate it, particularly in the aftermath of the Ukraine war. Unlike Western nations, the BRICS countries have refrained from imposing sanctions on Russia and have maintained their trade relations.
South Africa is also in favour of the BRICS expansion. Despite its struggling economy with a GDP of $405 billion in 2022, South Africa hopes that BRICS enlargement could boost its influence in global affairs and generate increased economic aid from various sources.
Brazil takes a cautious stance on the expansion of BRICS. The country highly values the prestige, legitimacy, and opportunities for enhanced trade and investment that BRICS membership brings. Brazil strongly advocates for a transparent, balanced, and consensus-based approach when considering new members.

Why India Does Not Support China’s Plan To Expand BRICS

India has made efforts to resist China’s attempts to transform the BRICS group into a platform that supports China’s geopolitical agenda. This includes promoting initiatives like the Belt and Road Initiative, the Global Development Initiative, and expressing explicit anti-US rhetoric. Instead, India has chosen to focus BRICS discussions and activities on projects that promote economic and financial cooperation among South-South countries.

Similar to China, India also seeks to decrease global reliance on the US dollar-centric international financial system and advocates for reforms in international financial institutions to offer developing nations greater representation and influence. However, unlike China, India does not intend to convert BRICS into an anti-western alliance to accomplish this goal.
India is expected to advocate for the establishment of clear criteria when considering the inclusion of new members into the BRICS coalition of emerging nations. Instead of relying solely on recommendations from current members, India seeks a more rigorous and well-defined process.

By adopting India’s approach, the BRICS group can foster cooperation among developing nations. Building on this foundation, they can engage with the G7 to discuss vital reforms in the global economic and financial system, as well as address pressing issues like the impacts of climate change.

This approach is likely to resonate with many developing countries, who seek to reform the existing international economic and financial system without explicitly aligning themselves with either the United States or China.

Why India Is Apprehensive About BRICS Expansion Plan

During the BRICS Foreign Ministers’ meeting in June 2023, External Affairs Minister S Jaishankar highlighted two key aspects regarding the expansion of the group. Firstly, the need to strengthen cooperation among existing BRICS members, and secondly, the importance of BRICS’s engagement with non-BRICS countries.

India is apprehensive about diluting its own influence if the BRICS group accepts an excessive number of new members closely aligned with China’s agenda. This is because India has long-standing and contentious border disputes with China, coupled with a rivalry for regional dominance against Beijing.

For over a decade, China and India have been locked in a contentious relationship, despite both being members of BRICS. Notably, India has taken measures in the past such as banning Chinese goods from entering the country and implementing restrictions on Chinese apps, including popular platforms like TikTok and Shein.

India has legitimate concerns about China leveraging the BRICS platform to advance President Xi Jinping’s vision and diminish the influence of the US dollar, aiming to establish itself as a dominant global economic and military power.

Challenge For India

India may have the ability to postpone the inclusion of aspiring members in discussions for a year or two, but it will not have the capacity to permanently ward them off.

India faces another challenge in the form of aspiring nations such as Egypt, Bangladesh, Saudi Arabia, UAE, Kazakhstan, and others. These nations are valuable strategic partners for India, making it impractical to indefinitely delay their applications.

Future Of BRICS

The future of BRICS, a group of emerging economies, relies heavily on its members’ approach to expansion.
There’s a growing tension between Eastern and Western nations, particularly involving trade and technology disputes between China and the US, and geopolitical issues between the West and Russia.
As a response to these tensions, China and Russia aim to grow BRICS and position it as a distinct group opposed to Western interests, a move that doesn’t align with India’s preferences.
The future of BRICS and its aspiring members heavily depends on how China and India resolve their disagreement on expansion.
While increasing the group’s size can elevate its status, it also presents a challenge, as adding too many members might weaken the group’s influence if it sticks to making decisions by consensus.
BRICS is a young group with large differences in the size, perspectives, and views on global power structures among its members. Until now, it has mainly kept a neutral stance, staying away from the rivalry between the West and the trio of China, Russia, and Iran.
Expanding the group could complicate and prolong decision-making. Any growth should be gradual, considering how new members can enhance the group’s strength and long-term effectiveness without escalating ideological and other kinds of divisions.