BRICS' expansion: scope and reality

The supremacy of the US dollar is a topic that has sparked controversy in recent years. Many nations blame the US dollar for its poor financial situation, as it is used as a benchmark for imports and exports. The depreciation of other currencies relative to the US dollar disadvantages other countries. For this reason, in 2010, a coalition of emerging countries joined forces to challenge the dominance of the US dollar.

The term BRIC, which stands for Brazil, Russia, India, and China, was first coined in 2001 by the Goldman Sachs economist Jim O'Neill. He suggested that this group of emerging economies would dominate the world economy by the middle of the 21st century. With the purpose of improving the global economic situation and reforming financial institutions, the leaders of these countries had their first official meeting in 2009 in Yekaterinburg. After that summit, BRIC nations declared the necessity for a new global reserve currency that must embody qualities of diversity, stability, and predictability. In 2010, South Africa was added to this group, forming what we know today as BRICS. This group has been striving to establish itself as the voice of developing economies and challenge Western dominance in global affairs.

However, in the last BRICS summit held in Johannesburg, South Africa, the participating countries discussed whether to expand the group. In this regard, a division within the group emerged; while Russia and China are trying to incorporate new nations, the remaining countries are reluctant to include countries like Iran or Cuba due to potential reactions from the United States. It is worth mentioning that Putin could not attend the summit due to a warrant for his arrest. Representing Russia instead was Russian Foreign Minister Sergei Lavrov.

Up to now, the BRICS group accounts for over 25 per cent of the world economy and comprises around 42 per cent of the world's population. This also entails diverse ideologies, political instability, and security-related issues. Additionally, the countries in the group have clearly different relationships with the United States. In the event of a potential expansion, all the aforementioned issues would be further aggravated as more diversity would be added to the group.

Since China is the most predominant nation in the group and the one with the most influence within it, incorporating more countries would provide the Asian giant with more means to exercise leadership over those developing countries. In addition to that, Russia would also view the incorporation of new members as a positive development since the Western world has isolated it because of the Ukraine War. Particularly, Russia will seek to add African countries, as they see the possibility of developing new markets with minimal impact from the West. In the words of the senior researcher at the Institute for Security Studies in Pretoria, Priyal Singh, China and Russia saw this as an alternative pole in the world order.

On the other hand, Brazil and India are more hesitant when it comes to adding new members to the BRICS group. According to analysts, these two nations prefer to think carefully about accepting new countries into the group. They suggest that it would be better to consider all the pros and cons of that action, as the entrance of new members could lead the group's positioning as conflicting to the interest of the West, potentially destabilising the group. As Brazil and India have pointed out, the fact that they are working with Russia and China does not necessarily mean they have to agree with them since their main purpose is to achieve strategic autonomy on the world stage.

On the other hand, South Africa has publicly expressed its support for the potential inclusion of new countries. However, due to its smaller size than the other members of the BRICS, it could risk losing its position in the group, especially if those new countries are from Africa. With that being said, if the BRICS members fail to come to a decision regarding the inclusion of new members into the group, their ability to address opposition toward the United States and its allies could be compromised.

So far, over 20 countries have expressed their desire to join the BRICS, while many others want to do so, although they have not formally expressed it. Among the potential candidates to be included, we can find Saudi Arabia, Argentina, Nigeria, and the United Arab Emirates, in addition to the previously mentioned Iran and Cuba. After the Johannesburg Summit, the group invited six countries to join them: Saudi Arabia, Iran, Argentina, Egypt, United Arab Emirates, and Ethiopia. These new members will officially join the group in January 2024.

It is obvious that the addition of these six countries is a victory for both Russia and China, as it results in a larger number of countries under their umbrella (given that they are the clear leaders of the BRICS formation). Consequently, this creates a situation for more countries opposing, or at least not aligning with the United States and Western countries. The larger the group becomes, the more powerful will be the opposition to the US and Western supremacy.

It is true that the selection of countries is somewhat contradictory, given the differences between countries like Iran and Saudi Arabia, as well as between Egypt and Ethiopia. As mentioned before, these differences can lead to discrepancies among the members of BRICS, potentially resulting in a deterioration of the group's strength. With the new additions, it appears that Middle Eastern and North African countries will wield significant influence within the group starting in 2024. 

It is also true that none of these new countries holds significant relevance on the global stage. However, oil-exporting countries have been gaining power over the last few decades, as seen in the case of Saudi Arabia. This can be extremely relevant when this group participates in negotiations with any of the Western countries, as petroleum remains a powerful bargaining tool for these countries in negotiations.

Personally, we believe this group can hold importance in the global economic landscape, as it represents some of the largest economies. The discontent of certain nations towards the United States and the US dollar is evident as they seek an alternative that addresses some of the issues the US currently faces. However, this does not necessarily have to be perceived as a threat to the Western world; the US and other Western countries should view it as an opportunity to strengthen themselves, perform better, and work as a team to overcome the challenges they are currently confronting. The consequences could be disastrous if this is perceived as a two-party conflict.

BRICS must be very cautious about what they decide to include in their conglomerate. Certain countries are currently involved in a warlike conflict, so it's important for those countries not to take explicit sides. Otherwise, it could be perceived as a threat to the other party, potentially escalating the conflict itself.

Finally, it should be noted that any formation incorporating different countries tends to strengthen those nations, as seen in the case of the European Union. Countries begin to collaborate, establishing agreements among themselves and removing export barriers like fees or duties, thereby enhancing the efficiency of international trade. If pursued for the right purpose, BRICS has the potential to bring significant benefits to the countries that comprise it. However, if it is viewed solely as a union aimed at opposing other groups (in this case, the Western countries), the consequences could indeed be detrimental.

Kabir Hassan is a Professor of Finance at the University of New Orleans, USA. KabirHassan63@gmail.com

José Antonio Pérez Amuedo is a doctoral Student at the University of New Orleans, USA