After three days of deliberations behind closed doors, six new countries, including Saudi Arabia, have been asked to join the BRICS group of developing countries.
According to Cyril Ramaphosa - president of South Africa and the summit’s host - Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates have been invited to join BRICS as full members.
Although the proposal is presented as a means of amplifying the voice of developing countries, several members have expressed reluctance since it would advance the geopolitical objectives of Beijing and Moscow.
In the midst of the ongoing Ukraine conflict and China-US rivalry, an expanded BRICS is anticipated to encourage China and Russia to forge a symbolic alliance.
The other specific measure put out by the group in South Africa is a comprehensive scheme to switch from using the US dollar for commerce between BRICS countries to trading in local currencies.
What is BRICS?
BRICS is a group of five countries with emerging economies that want to instate their own world economic and trade systems.
The group aims to create a new currency, and dozens of other countries want to join the group.
BRICS is an acronym that stands for Brazil, Russia, India, China, and South Africa, the five countries in the group. The term, which was originally BRIC before South Africa joined in 2010, was coined in 2001 by Goldman Sachs analyst Jim O’Neill. O’Neill wrote a paper on emerging economies and said that Brazil, Russia, India, and China had GDP growth that would exceed that of the G7 countries.
O’Neill found that, at the end of 2000, Brazil, Russia, India, and China accounted for about 23.3 per cent of world GDP. He expected the BRIC countries’ GDP to increase and suggested the G7 countries should consider adding BRIC representatives to the group.
In 2006, Brazil, Russia, India, and China formed an informal group in 2006 as allies that contribute to the world economy.
BRICS surpassed the global GDP contribution of the G7 countries in 2023, according to the group, which says BRICS accounts for nearly one-third of world economic activity.
This year’s summit, which takes place annually, is expected to be the biggest, with 69 leaders invited, and is focusing on reducing global reliance on the US dollar.
Which countries are part of BRICS?
Brazil, Russia, India, and China are the founding members of BRICS, while South Africa was the first country to join as part of the expansion in 2010. South Africa is the smallest member in terms of its economy and population.
Who else wants to join?
More than 40 countries have expressed interest in joining BRICS and 22 have submitted applications. “This growing coalition is a testament to the increasing influence of BRICS in the international arena and its potential to shape the future of global finance,” the group said.
The countries are:
United Arab Emirates
Democratic Republic of Congo
As of August 24, Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates have all been invited to join.
Does BRICS have its own currency?
The BRICS group says it aims to create new economic and trade systems separate from US-led Western systems.
At this year’s summit, the group will discuss the feasibility of a new currency, specifically de-dollarisation, “aiming to reduce the reliance on the US dollar and promote the use of national currencies in international trade.”
The group first started discussing a new currency after the US imposed sanctions on Russia in the wake of that country’s invasion of Ukraine. “A common currency among BRICS nations could lead to the establishment of stronger economic ties and new geopolitical alliances, further solidifying their position as a rising power de-dollarisation coalition,” the group said.
Former White House senior advisor Joseph W Sullivan told American magazine Foreign Policy that “Unlike competitors proposed in the past, like a digital yuan, this hypothetical currency actually has the potential to usurp, or at least shake, the dollar’s place on the throne.”