The Brics nations – Brazil, Russia, India, China and South Africa – are busy building a bigger house just now, with the size of their family looking set to grow, perhaps quite dramatically. But it is not so much size that matters as the diverse areas into which Brics members are projecting their influence.
Some see the bloc building greater influence in reform of the international economic and financial system and in securing a bigger voice and vote for developing nations at the International Monetary Fund. It has already launched the New Development Bank (NDB) and members are promoting new currency and reserve arrangements.

More than 40 countries have either formally applied or expressed interest in joining Brics, according to South Africa’s top diplomat in charge of relations with the bloc. These include Saudi Arabia, Iran, Argentina, the United Arab Emirates and Indonesia.

Brics appeared economically too diverse and geographically scattered to be effective when it was born as the Bric group, without South Africa, in 2009. Yet this very diversity seems to have guided it towards a more global perspective than that demonstrated by other regional groupings.

Such facts are being largely overlooked by commentators in the run-up to the 15th annual Brics summit to be held in Johannesburg, South Africa, later this month. They are more concerned with Russian President Vladimir Putin decision not to attend the Brics summit in person.
Yet, it is unlikely to be Putin’s actions, including the war in Ukraine, that take centre stage at the summit, but rather how the nations interested in joining Brics view actions there by Chinese President Xi Jinping and Indian Prime Minister Narendra Modi. One reason so many emerging economies are considering Brics membership now is that they are weary of being cajoled or coerced into taking sides in the divide between the US and China, and in the Russia-Ukraine confrontation.

03:27

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Joe Biden set to unveil ‘substantial’ new G7-backed sanctions aimed at Russia’s war in Ukraine

Brics is a natural pole of attraction because its chief focus is to promote multilateralism and global governance, not least in the areas of economics and finance. These principles are seen by some to be in jeopardy now, however, because of perceived rivalry between China and India, just when the potential attraction of the bloc as a balancing force in world affairs is at an all-time high.

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Non-resident senior fellow at the Atlantic Council Hung Tran believes that Brics “could evolve to become a counterpart to the Group of Seven (G7) in world affairs, resulting in a profound impact on international relations”. Whether this is positive or negative depends on whether China’s or India’s approach prevails.

India, Tran says, “has tried to resist China’s efforts to turn the Brics group into a support organisation for China’s geopolitical agenda, such as promoting Beijing’s Belt and Road Initiative, its Global Development Initiative, and explicit anti-US rhetoric”.

New Delhi has instead, Tran argues, tried to focus the grouping’s Brics attention on “South-South economic and financial cooperation projects, initiatives to reduce global reliance on the US dollar-based international financial and payment system, and reforms of international financial institutions to give developing countries more voice and representation”.

Indian Prime Minister Narendra Modi (left) and Chinese President Xi Jinping talk during their summit in Mahabalipuram in the Indian state of Tamil Nadu on October 12, 2019. Tensions between the two countries have increased since then. Photo: Indian Press Information Bureau / AFP

This may or may not be an accurate characterisation of the Sino-Indian situation within Brics but it does not quite square with the tone of the 2022 summit at which China showed strong support for bloc’s push to foster global economic and financial system reforms.

So, too, has Brazil, whose former president Dilma Rousseff was elected president of the New Development Bank in March of this year – a development likely to raise the profile of and bring new members to the Shanghai-headquartered institution, which was founded to mobilise resources “for infrastructure and sustainable development projects in emerging markets and developing countries” and which has financed 98 projects worth around US$33.2 billion.

Why African nations are keen to join the expanding Brics club

Rousseff has emphasised that the NDB will aim to provide 30 per cent of its financing in local currencies of member countries, which is consistent with the aim of reducing dependence upon the dollar – a goal shared by both China and India.

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Rousseff’s presence at the Brics summit should provide a focus of attention around which Brics founder states can unite by emphasising its multilateral priorities.

Dilma Rousseff, chair of the New Development Bank, delivers a speech during the opening ceremony of the bank’s eighth annual meeting in Shanghai on May 30. Photo: AFP

In 2015, the year of the NDB’s founding, the bloc launched a Contingent Reserve Arrangement of US$100 billion to provide support to members in case of balance of payments problems, potentially offering Brics members an alternative financing source to the IMF.

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Even earlier, in 2010, the grouping launched an interbank cooperation mechanism to facilitate cross-border payment and settlements between banks in member countries in local currencies. Linking their national payment systems is also being explored by some member countries.

The Brics idea came into being in 2001 when Jim O’Neil of Goldman Sachs suggested the acronym to describe four key emerging markets – he did not include South Africa – and was not taken entirely seriously at the time. Now they account for more than a quarter of global GDP, and no one can dismiss lightheartedly now their challenge to the established economic order.

Anthony Rowley is a veteran journalist specialising in Asian economic and financial affairs

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