Brazilian President Luiz Inacio Lula da Silva and former president Dilma Rousseff shake hands after Ms. Rousseff took office as the new president of the New Development Bank in Shanghai on April 13.RICARDO STUCKERT/AFP/Getty Images
The BRICS bloc of countries, with China and Russia playing prominent roles, is pushing ahead with plans this year to expand its membership and tackle the dominance of the U.S. dollar in global trade.
As many as 20 countries have voiced interest in joining BRICS, according to officials in South Africa, which is chairing the five-country partnership this year. India and Brazil are the other current members, but an ambitious expansion plan is on the agenda for its annual summit in August.
While the bloc was created primarily as an economic group in 2009, it has become increasingly active in the geopolitical arena, calling for a more “equitable” global order and implicitly challenging the West. In December, a Chinese diplomat in Northern Ireland tweeted a cartoon showing the BRICS members collectively delivering a knockout punch to Uncle Sam.
More recently, Russian and Brazilian leaders have suggested that BRICS could create its own currency as an alternative to the U.S. dollar in their trade.
South Africa’s ambassador to BRICS, Anil Sooklal, says the organization should “provide the global leadership that is lacking in the world today.” In a recent speech, without explicitly mentioning the United States, he complained of “the return to Cold War mentalities and the preservation of hegemonic tendencies” as among the ills that BRICS could help to solve.
The BRICS countries already account for 41 per cent of the world’s population and about one-quarter of global gross domestic product. This is still far less than the economic share of the Western-dominated G7 countries, but expansion could narrow the gap.
As the bloc’s current chair, South Africa is responsible for drafting criteria to be used for deciding on new BRICS members. The applicants so far include Saudi Arabia, Egypt, Algeria, Mexico, Argentina, Nigeria, Indonesia, Bahrain, Iran and the United Arab Emirates.
Thirteen countries have formally applied and another six or seven have expressed interest, Mr. Sooklal said. The membership guidelines will be discussed at a meeting of BRICS officials next month.
There is “tremendous interest from a large number of emerging markets, developing countries, very important countries from the Global South, wanting to join the BRICS,” Mr. Sooklal told an Indian media outlet last month.
“They’re not asking to join other bodies. They’re asking to join the BRICS. And that’s because we are doing certain things that are appealing to them in terms of addressing the imbalances that exist in a very unequal world at the present time.”
At a BRICS summit last year, China signalled its support for an expansion of the bloc. President Xi Jinping, in a speech, said the bloc’s member states should resist those seeking to “expand military alliances” and “coerce other countries into choosing sides” – a tacit reference to the U.S.
“BRICS countries should support each other’s core interests, practise true multilateralism, uphold justice and oppose hegemony, maintain fairness and oppose bullying, and maintain unity and oppose division,” Mr. Xi said.
This year, Chinese officials and state media have linked BRICS to Mr. Xi’s global development and global civilization initiatives, intended as alternatives to the Western-led international order.
In particular, BRICS is seen as a potential vehicle for breaking the dominance of the U.S. dollar, a long-standing Chinese goal. During a trip to China last month, Brazilian President Luiz Inacio Lula da Silva spoke of the need for an alternative currency and questioned why BRICS countries should trade with each other in U.S. dollars.
His long-time ally, Dilma Rousseff, herself a former Brazilian president, now heads the Shanghai-based New Development Bank, set up to fund BRICS projects.
Russia is also promoting the currency idea and the expansion of BRICS, which would help it to bypass Western sanctions linked to the Ukraine war. The deputy chairman of Russia’s State Duma, Alexander Babakov, told journalists in India that the BRICS summit in August will consider the creation of a currency for trade within the bloc. He called for a “fundamentally new currency” that could be digital.
As an intermediate step, the BRICS countries could begin to trade with each other in their local currencies. An interbank agreement among its member states has already authorized this, and such trade is expected to become more common.
A former White House economist, Joseph Sullivan, said a BRICS currency has the potential to shake the dollar’s place on the global throne. “However early plans for it are, and however many practical questions remain unanswered, such a currency really could dislodge the U.S. dollar as the reserve currency of BRICS members,” he wrote in Foreign Policy last month.
The proposed BRICS currency – which he suggested could be called “the bric” – would be unable to defeat the dollar but would “shrink the size of the territory in its domain,” Mr. Sullivan said. “The global monetary order would become more multipolar than unipolar. … The dollar’s reign isn’t likely to end overnight – but a bric would begin the slow erosion of its dominance.”
Writing in the state-run China Daily last month, former Kyrgyz prime minister Djoomart Otorbaev said the growth of BRICS and related institutions showed “developing countries are not only aware of their growing power but, more important, are building mutual trust and have begun to unite.” He predicted the G7 would “come under intense pressure to relinquish control” of institutions such as the World Bank.
Stephen Nagy, an expert on Chinese foreign policy at Tokyo’s International Christian University, said Beijing hopes to grow its influence through expanding BRICS and building support in the Global South, while at the same time undermining Western dominance of international institutions.
“The challenge is, however, that the Chinese economy is slowing,” Prof. Nagy said, and the country also faces institutional and structural challenges, while other BRICS members face their own issues, not least Russia’s global pariah status.
With vastly different political systems and economies, the BRICS countries are a “less coherent group than one might think,” he added. China and India, the two largest BRICS economies, have a long-standing border dispute that has threatened to spill over into conflict several times in the past decade.