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The 15th BRICS Summit was held in Johannesburg, South Africa, on August 22–24, 2023.
Brazil, Russia, India, and China (formerly abbreviated BRIC) are the fast-growing economies that were predicted to dominate the world economy by 2050; South Africa joined the group in 2009. These nations have a strong economic position as developing market leaders, a wealth of critical natural resources, and—most importantly—a record of rising GDP growth and global trade participation. Among the goals of the BRICS there is a firm commitment to a reorganized political, economic, and financial international architecture that reflects the modern world and is more just, balanced, and representative; an increased representation of emerging markets and developing nations in international organizations and multilateral fora, and a commitment to multipolarity in the global financial markets through agreements that are not based on the dollar. As indicated by the establishment of the New Development Bank (NDB) in 2014, the BRICS’ most significant accomplishments were made, in fact, in the field of financial cooperation.
During the summit, the leaders of the BRICS pushed for the creation of a common currency for the bloc, giving their finance ministers and central bank governors instructions to take into consideration local currencies, payment methods, and platforms. This was done in an effort to shift the financial center of gravity of the world towards the new economies and to take into account the possibility to create a financial network that increasingly marginalizes the dollar.
Most importantly, the latest summit marked a turning point in the membership debate, as six more countries will join the BRICS as of January 2024. With Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates joining, the BRICS countries will be able to express an economic, financial, and demographic weight that will unavoidably redraw the power balance, still hinged on the Western axis. According to Brazilian President Lula da Silva, the BRICS “will represent 36% of the world’s GDP and 47% of the total population of the entire planet” as a result of the admission of the new members. The other founding nation’s Presidents welcomed the occasion with excitement as well: according to Indian Prime Minister Narendra Modi and Chinese President Xi Jinping, the increase in the membership underscores the BRICS nations’ resolve to work together with other emerging nations to create a multipolar world order. Of the six newly admitted states, as many as four are from the Middle East region: with the enlargement to include key countries such as Iran, Saudi Arabia, Egypt and the United Arab Emirates, the group definitely has greater political, financial and commercial leverage.
Firstly, the geographical location of the new members is extremely favorable for trade. The Gulf States – Saudi Arabia, Iran and the Emirates – straddle one of the most crucial bottlenecks for oil supply – the Strait of Hormuz, through which 18 million barrels of crude oil a day pass, amounting to almost 20 per cent of world oil traffic; on the other hand, the Suez Canal, a vital passageway for goods traveling from China and India to Europe, is under the jurisdiction of Egypt.
Additionally, in the ever-increasing fight for renewable energy sources, the entrance into the BRICS bloc could represent for these MENA countries an opportunity to step into the value chains of critical materials. In fact, China controls the majority of supply chains for new technologies, and this could prove extremely advantageous to the group in terms of energy security. Thus, the new BRICS would have control over a significant portion of the world’s energy resources -both for energy security in the short term and for supply forecast in the longer term.
The enlargement had decisive impacts on the external level and projected a new geometry of both regional and international relations. The recent rapprochement between Saudi Arabia and the Islamic Republic of Iran, which was mediated by China and took place in March, marked a historic turning point for the region. The two ex regional nemesis’ membership in the same strategic bloc now indicates a further reconciliation; China’s inclusion is no coincidence, demonstrating the growing effectiveness of using soft power and diplomacy in a very conflicted region. The alternative to the Western and American bloc is becoming more clear: much like Russia, Tehran is blocked and isolated by Western sanctions, while Saudi Arabia seeks to increase its independence from Washington and shift its economic interests farther east. The fact that the Middle East group is contacting China more frequently in this context as a preferred foreign interlocutor is significant. Growing Chinese influence has major international ramifications, not just from a commercial and diplomatic point of view but also from a financial one, in a region that has long been strictly under stringent American control. It would be a significant signal to the Bretton Woods institutions that the financial center of gravity is progressively shifting towards Asia and the Pacific if several of the greatest economies in the world began doing trade with one another without using the dollar.
Read the following for more information:
https://www.reuters.com/world/brics-poised-invite-new-members-join-bloc-sources-2023-08-24/
https://www.mei.edu/publications/will-brics-membership-recast-irans-foreign-policy
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