The curtains have gracefully fallen on the 15th BRICS Leaders’ Summit that unfolded in the vibrant heart of Johannesburg. Hosted by the Republic of South Africa from August 22nd to 24th, the summit’s echoes continue to reverberate across the global stage. Amidst the diverse tapestry of discussions that unfolded, two themes captivating the world’s attention: ‘expansion’ and ‘de-dollarization’.
In the days leading up to the summit, the world held its collective breath as news broke of an astonishing 22 nations formally expressing their desire for BRICS membership. Behind closed doors, the leaders deliberated and then unveiled their decision: Argentina, the United Arab Emirates (UAE), Ethiopia, Iran, Egypt, and Saudi Arabia were unanimously embraced as full-fledged BRICS members, a transformation set to be realized on the first day of the forthcoming year, 2024. The BRICS alliance now stands as an impressive cohort of 11 nations, a symphony of diversity and unity.
Amid the palpable anticipation surrounding the summit, the discussions around a potential new common reserve currency ignited imaginations worldwide. Though this particular aspiration wasn’t fully realized, the journey taken toward facilitating trade in local currencies is a significant step forward. Brazilian President Lula da Silva unveiled visionary plans for a dedicated task force entrusted with the intricate task of crafting a benchmark currency for BRICS. This roadmap envisions a series of agreements conducted in local currencies, laying the foundation for seamless and cost-effective monetary circulation among BRICS members. This intricate collaboration extends to institutions like the New Development Bank (NDB) and notably the African Development Bank, creating a support plan.
The 15th Summit, forever etched in history by its monumental decision to expand the alliance, reignites contemplation about BRICS’ role in the international order. Is BRICS poised to emerge as a potent contender to the established G7 consortium, counting Germany, the United States, the United Kingdom, Italy, France, Japan, and Canada among its members? Does this expansion signify a paradigm shift in the global order? How will the disparities among member countries shape the trajectory of this alliance? Could BRICS potentially engineer an alternative currency to challenge the supremacy of the dollar? Does the notion of “BRICS+” hint at an amplification of existing global confrontations?
Prof. Dr Seriye Sezen from Ankara University Faculty of Political Sciences, evaluated the prominent discussion topics on the 15th BRICS Summit.
‘Expansion is an attempt to neutralise the West’s economic weapon’
*The expansion of BRICS, after a remarkable decade, has brought six new countries into the fold. What, in your expert view, were the guiding points that led to the selection of these nations from among the 22 applicants? For example, among them, Saudi Arabia’s potential to disrupt the petro-dollar dominance adds intrigue.
Without a doubt, this expansion marks an epochal milestone, elevating BRICS’ membership from five to eleven since South Africa’s accession in 2010. This dynamic coalition, yet to be cast in a formal organizational mold, is in the process of defining the contours that will guide its expansion. This need for well-defined guidelines has been championed by many for quite some time. The 15th Summit, which took place from August 22 to 24 in 2023, unveiled the existence of criteria for the expansion process, though these remain enshrouded. As a result, assessing the new entrants against BRICS’ priorities presents a complex puzzle.
Moreover, it is noteworthy that only Egypt and the United Arab Emirates hold memberships within the New Development Bank (NDB), the financial backbone of BRICS. This points to NDB affiliation not being the sole determiner of membership. The collective GDP of these six nations in 2022 stood at around $3.2 trillion, trailing the economic prowess of India. However, this economic tapestry does not provide a definitive benchmark either.
A balanced representation across geography appears to be the cornerstone of this expansion. Encompassing the vibrant nuclei of the global south—Latin America, Africa, and the Middle East—emphasizes the alliance’s inclusivity. The Middle East, in particular, commands attention, casting a spotlight on the inclusion of Iran, Saudi Arabia, and the UAE. Even though Egypt resides on African soil, its significance extends to the broader region, solidifying its inclusion. Saudi Arabia, the UAE, and Iran collectively stand among OPEC’s top five oil producers. Coupled with Russia’s OPEC+ membership, BRICS evolves into a distinctive OPEC framework, attesting to its burgeoning command over oil production (representing 43% of global output) and trade. As alignment with the broader intent of promoting trade in local currencies takes shape within and beyond BRICS, a surge in non-dollar international trade becomes a tantalizing prospect.
This pivot toward the Middle East fortifies China’s presence in this energy-rich region. China’s skillful diplomacy in navigating the relationships between Saudi Arabia and Iran has further solidified these nations’ ties under the BRICS umbrella. While the alignment of these new members with traditional US allies like Saudi Arabia and Egypt raises questions about the trajectory of their relationship with the US, it concurrently bolsters China’s stance in the complex China-US rivalry.
Africa, the second cornerstone of this expansion, holds profound importance for China, Russia, and India. Ethiopia, home to the Organization of African Unity, shares robust trade connections with China and India. Argentina, despite economic turbulence, stands as South America’s second-largest economy. BRICS’ assistance in navigating economic challenges in Ethiopia and Argentina holds promise, potentially reducing their reliance on Western financial institutions.
In the grand tapestry of this expansion, the Western world’s tactic of using economic prowess as a tool for imposing ‘economic sanctions’ in areas contrary to their interests comes into focus. In scenarios where economic sanctions lack a veneer of legitimacy, this often spirals into the weaponization of technological espionage and national security concerns, as exemplified by actions against Chinese enterprises. BRICS’ drive to broaden horizons and distance itself from the dominance of the dollar is essentially a strategy to neutralize this economic weapon.
Viewed against the broader canvas of the global stage, this expansion mirrors a strategic countermove to the ongoing expansion of NATO. The connection may not be immediately apparent, considering BRICS and NATO are distinct entities. Yet, NATO, reshaping itself after the collapse of the Soviet Union, is undergoing a second transformation, redefining its roles and geographic focus. This reformation zeroes in on Russia and the Russia-China alliance, labeling them as threats to democracy and the established order. While Russia’s perceived threat may be secondary, predominantly due to its relationship with China, the true focus is on China. This encirclement, spanning the vast expanse from the Atlantic to the Asia-Pacific, marks a paradigm shift for NATO, evolving it from a regional defense entity into a global instrument for US efforts to counteract China and Russia. Notably, this expansion extends into Europe, ringing alarms with the ominous proclamation of “your security is at stake.”
‘In the short term, the dollar’s dominance will not be shaken, but its power may be relatively reduced’
*The summit’s spotlight on local currency transactions over a unified currency underlines the disparities between member nations. The news of the New Development Bank’s intention to lend in South African and Brazilian currencies raises intriguing questions. How do you assess these dialogues? Is the concept of a shared BRICS currency within reach? To what extent can efforts to promote local currency transactions erode the supremacy of the US dollar?
Beneath the surface of BRICS’ aspiration for a unified currency simmers a concern about the overwhelming dominance of the US dollar as the global reserve currency. This unease stems from the strategic use of dollar supremacy as a lever against targeted nations, a tactic that has not gone unnoticed on the international stage. Reflecting on China’s decade-long advocacy for a new global reserve currency, it becomes evident that this sentiment resonates deeply within BRICS. However, the complexity of this endeavor and the hurdles it presents have led BRICS to focus its efforts on a shared currency as an interim goal, a pragmatic step on an ambitious journey.
The immediate realization of a common currency is a feat that demands intricate technical orchestration and collective compromise. The challenge extends beyond economic disparities among member nations, delving into the realm of alignment with established global structures. Indeed, BRICS’ Economic Cooperation Strategy for 2021-2025 only briefly alludes to the concept of a common currency. Instead, the current thrust revolves around boosting trade in national currencies, a sphere projected to encompass 30-35% of all transactions. With new members set to join in 2024 and the potential for further expansions in sight, this percentage is destined to surge. Regrettably, these steps won’t herald an immediate upheaval of the dollar’s dominion; however, they hold within them the latent potential to dilute its influence. The true impact hinges on how this collective initiative resonates beyond the confines of BRICS, particularly within the realm of non-BRICS international trade.
The hypothetical scenario of Saudi Arabia engaging in non-dollar transactions, such as arms trade with the US, showcases the intricate interplay of this initiative on a broader stage. Notably, China and BRICS are not attempting to construct a new edifice to replace the existing global capitalist system. Their aspiration is twofold: to disentangle themselves from the clutches of this system by establishing alternatives, while simultaneously deepening their engagement with its foundational institutions. This dual strategy involves active participation in the decision-making processes of entities like the UN, IMF, and World Bank. These institutions wield unparalleled influence over global monetary policies and trade frameworks. This strategic purpose finds resonance in the Final Declaration of the summit, a roadmap that outlines steps towards heightened participation and importance of new members in these global institutions. Collaborative expansion within the New Development Bank augurs a promising trajectory in this regard.
The struggle to overcome the Western based order
*With the integration of new members, does BRICS need to redefine its principles and trajectory? In light of internal divergences, can BRICS realistically aspire to outshine the G7 consortium?
Despite its 15-year journey and the establishment of a development bank, BRICS retains its informal essence. A comprehensive charter that delineates objectives, organizational structures, decision-making mechanisms, member roles, and expansion principles is conspicuously absent. Thus, BRICS continues to exist in an interim state of liminality, a dynamic entity straddling multiple labels—platform, cooperative mechanism, consortium, international organization—each imperfectly capturing its true essence. The precise designation for BRICS in the wake of these new inclusions remains an enigma, a lexical treasure yet to be unearthed.
In this regard, BRICS shares kinship with the informal tapestry of entities like the G7 and G20. The semblance of structure and cooperative dimensions finds expression in the Economic Cooperation Strategy for 2025, a symphony set to be harmonized again in 2025. A coherent decision-making process stands as a linchpin, pivotal for both internal cohesion and lucidity for the public eye. The question lingers: will unanimity remain the lodestar for decision-making? The growing roster of members may potentially slow down the pace of decision-making, introducing the occasional hurdle in the relentless quest for consensus.
While the constituents of BRICS rally around common themes, disparities and diversity loom large. Varied motivations, expectations, economic, military, and political power dynamics, coupled with intra-member affiliations and connections to Western powers, collectively shape divergent BRICS policies. Notably, while China and Russia may prioritize rivalry with the US, India’s aspirations pivot differently, seeking to extract benefits from this rivalry. India’s perspective—envisioning BRICS as a hub of polarization rather than an embodiment of non-alignment—has sparked substantial debates. The convergence of these diverse interests is emblematic of multi-party structures, each vying to maximize their gains. Such diversity is not exclusive to BRICS, finding resonance in the nuanced dynamics within NATO and the EU, as exemplified by France’s recent position within the former. Symmetry in power and interests within entities like the G7 remains elusive; consider the intricate power dynamics among the US, Japan, and Canada. The crux lies in the skillful management, equilibrium, and harmonization of disparate interests and divergent trajectories.
As for the claim to surpass the G7, I prefer to look at BRICS not through the BRICS-G7 dichotomy, but through the global system. The problem here is not to overcome this or that Western organisation on the basis of numerical data, but rather the struggle to make the so-called “international order”, the rules and institutions of which were determined by the dominant Western powers after 1945 according to their own needs and priorities, meet the interests and expectations of the current balance of power. BRICS is only one pillar of this long-term, multi-dimensional, multi-stage struggle full of difficulties. It is not easy to predict where this struggle will evolve and how it will end. Moreover, since the struggle is not aimed at global capitalism itself as a system, but at becoming more decisive in its functioning, the extent to which the new order that will emerge will be based on fairness and equality is a matter of debate. However, the process has begun and the counter-measures taken by the USA, the main beneficiary of the international order, and the G7 to maintain the existing order (NATO expansion, AUKUS, QUAD, B3W, PGII, etc.) are an indication of the seriousness of the situation.
