It aims to challenge the West and could rival the G7. What is BRICS?

Dubai: For more than a decade it’s been an exclusive five-member club of the Global South that has achieved not much. Yet dozens of nations are lining up to join it. Why?

Amid a raging war in Ukraine, China’s rising tensions with the US and cracks in the world’s traditional rules-based order, the economic bloc of Brazil, Russia, India, China and South Africa, known simply as BRICS, finally turned heads on the world stage this week as it gathered for its 15th annual summit in South Africa.

India’s Prime Minister Narendra Modi, centre, looks on at the plenary session as Russian President Vladimir Putin delivers his remarks via video link, at the 2023 BRICS Summit in Johannesburg.Credit: AP

There it became clear the alliance of fast developing economies is evolving beyond its roots – it has invited Saudi Arabia, Iran, Ethiopia, Egypt, Argentina and the United Arab Emirates to join.

That move buoys Chinese President Xi Jinping, who has been quietly pushing to grow the BRICS family, in the hope it will be a counter to perceived Western dominance and established alliances like the G7.

Ending a reliance on the American dollar, enhancing local currencies and increased cooperation were also high on the agenda.

Russian President Vladimir Putin attends the BRICS group of emerging economies three-day summit in Johannesburg, South Africa via videoconference from Moscow, Russia.Credit: AP

So, what is BRICS and why does it matter?

And why did Vladimir Putin have to video call-in to join Luiz Inácio Lula da Silva, Narendra Modi, Xi Jinping, Cyril Ramaphosa for dinner at a luxury Johannesburg estate?

Why these five nations?

BRICS stands for Brazil, Russia, India, China and South Africa. The idea blossomed from the acronym coined by Goldman Sachs economist Jim O’Neill to describe the potential of four fast-growing global economies. It launched as BRIC in 2009, before South Africa was added the following year.

A man watches a large screen showing CCTV broadcasting news of Chinese President Xi Jinping delivering his speech at the BRICS Summit held in South Africa, at an outdoor shopping mall in Beijing.Credit: AP

However, in the shadow of Russia’s war on Ukraine, the resulting severe economic sanctions on the Putin regime and worsening trade disputes between the US and China, the bloc wants greater clout to expand its influence.

“The original idea [...] was to group countries with similar growth characteristics, maybe with similar investment returns, and it never really came to anything,” said investment analyst Chris Weafer, a strategic consultant specialising in Russia and Eurasia.

“Now, there is a strong chance that BRICS could actually evolve into something more substantial.”

South African President Cyril Ramaphosa delivers his opening remarks at the BRICS Summit in Johannesburg. Credit: Reuters

Weafer said the grouping had attracted a willing audience throughout the developing world with the pledge to be a unifying voice.

“It has allowed for Moscow and Beijing to go to countries in BRICS, and others like Saudi Arabia essentially saying, ‘this could happen to you, we need to work together, we need to create a stronger group to survive the actions of the Western world’.”

Host nation South Africa also sees potential in the group to rebalance the world order away from the West, in favour of what is known as the Global South (roughly, developing countries south of developed ones).

Who else wants in?

The five original BRICS members account for 40 per cent of the global population and more than one third of the world’s economic output. But more than 40 nations are now interested in joining, some of which sent delegations to the sidelines of the summit.

On Thursday, the sought-after invitation landed for six nations. Significantly, the world’s top oil exporter Saudi Arabia is among them, a move which connects some of the world’s largest energy producers with the biggest consumers.

Chinese President Xi Jinping meets South African President Cyril Ramaphosa ahead of the summit at Tambo International Airport in Johannesburg.Credit: Reuters

India’s former ambassador to Saudi Arabia Talmiz Ahmad this week told the Associated Press Saudi Arabia would bring “extraordinary importance to this grouping” if it were to join.

Some analysts say the bigger the bloc, the greater the influence. However, O’Neill told Bloomberg more member countries could make it harder to find common ground.

“Beyond the admittedly hugely powerful symbolism, I’m not quite sure what having a lot more countries in there is going to achieve,” he said.

The growing queue of interested nations reflects a larger trend of “multi-aligning”, where states turn to informal groups with different powers, said senior fellow of the Rising Power Alliances Project at Tufts University, Mihaela Papa.

“Countries see possible benefits in aligning with a multipolar agenda, belonging to the club for economic benefits, pursuing specific BRICS initiatives to reform global finance and transitioning to local currencies,” she said.

What about Russia’s war on Ukraine? People receive medical treatment at the scene of Russian shelling, in Kyiv, Ukraine.Credit: AP

“If and when enlargement happens, interactions become more complicated and reaching consensus more difficult, which risks turning BRICS into a G7-like group.”

Who benefits from growing the club?

For China, BRICS is another powerful engine to spread its influence and challenge American dominance, particularly in developing nations.

“I think that’s especially true for the Middle East, Africa, and, to some extent, Latin America as well,” Brian Hart, fellow for the Centre for Strategic and International Studies, said in a summit preview last week.

In published remarks, Hart argued the expansion strategically favours China, but may be less advantageous for smaller economies in the group.

Not inside the meeting: Ukrainian supporters protest near the venue of the BRICS Summit in Johannesburg.Credit: AP

The director of the China program at Washington’s Stimson Centre, Yun Sun, said Beijing sees BRICS as one cornerstone of the alternative world order China is trying to shape.

“Given the sway – both political and economic – it carries within the group, BRICS is one of the instruments for China to align with like-minded countries and present an alternative to the West-dominated order,” she said.

While India may seek a cautious approach to new members, Indian Prime Minister Narendra Modi this week said he “fully supports” an expansion.

Russia sees expansion as beneficial to its cause by proving it still has allies despite western-led sanctions, and while Brazil is wary of diluting its influence, it has been keen to welcome neighbour Argentina to the group.

And what about the war?

Putin was also patched in by video-link to attend a pre-summit banquet with fellow BRICS leaders. He did not travel to South Africa for the summit because he is the target of an International Criminal Court arrest warrant for war crimes in Ukraine.

He used his speeches by video to accuse the West of “continuing neocolonialism”, while other bloc leaders called for global equality.

Brazil’s Lula, meanwhile, called for BRICS to play a greater role in working to end fighting in Ukraine, adding that he could not remain “indifferent to the deaths and destruction that increase every day”.

He has previously nominated Brazil to lead a mediator group to help end the war.

While the leaders of Brazil, India, China and South Africa have talked about the need for peace, all have maintained diplomatic relations with Russia while including it in new initiatives under the BRICS umbrella.

“That said, the war has changed the ability of the [BRICS] New Development Bank to operate, given its ties to Russia, and [the fact that] President Putin could not join the summit,” Papa said.

with Bloomberg, Reuters

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