Johannesburg, South Africa – The BRICS bloc of top emerging economies have taken a major step in expanding its reach and influence with the announcement that six more nations have been invited join as new members. Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates have been invited to join as full members from January 1 next year.
The bloc, which was formed in 2009 with Brazil, Russia, India and China, first expanded to admit South Africa in 2010. Now, it is says it is seeking to grow a stronger coalition of developing nations who can better put the interests of the Global South on the world’s agenda.
Before the start of its annual summit in South Africa this week, more than 40 countries had expressed interest in joining BRICS, and 23 formally applied to join. “We appreciate the considerable interest shown by countries of the Global South in membership of BRICS,” the bloc said in the Johannesburg II declaration it adopted on the final day of the summit on Thursday.
It said the six were selected after “BRICS countries reached consensus on the guiding principles, standards, criteria and procedures of the BRICS expansion process” – but did not provide more details about the specific criteria. “It is hard to find commonalities among the six countries invited to join BRICS other than that they are each significant states in their region,” Danny Bradlow, a professor with the Centre for the Advancement of Scholarship at the University of Pretoria, told Al Jazeera. With the inclusion of Saudi Arabia, Iran, UAE and Egypt, “you could argue it’s very Middle East centric”, according to Sanusha Naidu, a senior research fellow at the Institute for Global Dialogue, a South African think tank focusing on China and Africa. “This has geo-economic, geostrategic and geopolitical implications,” Naidu argued, saying the latest additions will push some BRICS nations to think more about their Middle East policies, and for China and India to beef the existing policies.
China recently brokered the re-establishment of ties between Saudi Arabia and Iran, a role that would traditionally have been filled by a country like the United States. India’s recently signed an agreement with the UAE to trade in Indian rupees and Emirati dirhams instead of in the US dollar.
Crucially, Naidu argued, the expansion list is “very energy centric”, adding that following the announcement, some analysts at the venue even facetiously commented if they should “call it BRICS plus OPEC?”. When selecting new members, the bloc may have taken into consideration the pricing of energy products, and how their countries can reduce their liability and vulnerability in terms of the cost of oil, she said. “Besides Russia, all of [the core BRICS countries] are non-energy producing countries. They need to be able to make their economies function, but they don’t want to get caught in the secondary collateral damage of sanctions,” she explained. The use of “unilateral sanctions” against countries and the continued dominance of the US dollar in global trade is something BRICS has vocally challenged.
The expansion “opens up new avenues for trade”, said Karin Costa Vasquez, a non-resident senior fellow at the Center for China and Globalization in Beijing. One of the aims behind the planned expansion is “creating opportunities for BRICS nations to trade more easily with one another using local currencies”, Vasquez added “This shift could increase the potential for using currencies other than the US dollar, particularly by creating a network of countries that enhances the utility of their respective currencies.”
Comment: An interesting title for this al Jazeera article, but what it describes is not a wall. It is a rearranging of the global economic order. I think most, if not all, here would agree that the international economic order is ripe for readjustment. The siren call of global economic integration is sounding a little flat. National and regional self-sufficiency seems to be the new holy grail. This is something Trump really put in motion here in the US and Biden is certainly continuing that trend. Globalists of all persuasions can’t be pleased with this trend.
Change is inevitable. Besides this embrace of self-sufficiency, Putin’s war and the ensuing sanctions regime continues to bring drastic changes to the world economic order. I also think the idea of continued Us economic hegemony is getting stale, even to many in the US.
China, though, appears to be solidly wedded to the idea of world economic integration. They just want to be calling the shots instead of the US. Isn’t that the purpose of the One Belt One Road initiative? This may also be China’s main reason behind the expansion of the BRICS group. In the first linked article below, India’s Modi expresses his concern over China’s motives and the entire reasoning behind the expansion of the BRICS group, which is not yet a done deal. I sense he sees a danger in the drive towards a bipolar world order divided between China and US camps. He does see great value in greater regional economic integration. I don’t know how he views the trend towards nationalization of economies.
Finally, one of the greatest hopes to many and fears to some is the de-dollarization of world trade. The dollars international hegemony is sure to weaken, especially on a regional basis, but it is a long way from collapsing. The second article linked below offers some thoughts on this. Since I am a near macroeconomics illiterate, I look forward to your thoughts on the future of the BRICS group and the international economic order.