Victory for China and Russia after historic BRICS decision

The BRICS bloc has agreed to add six new members, in an effort to reshape the global world order and counterbalance the US and its allies.

BRICS' economic and political clout will be boosted after six countries, including Iran, Saudi Arabia, Egypt, Ethiopia, Argentina and the United Arab Emirates (UAE), become full members in January 2024.

This is the bloc's first expansion since 2010, when South Africa was added to the original four members: Brazil, Russia, India and China.

The expansion was announced on the morning of August 24 as the BRICS summit concluded in Johannesburg. It means BRICS will now represent 47% of the world's population and 36% of the global economy, according to Brazilian President Luiz Inácio Lula da Silva.

Historic decision

BRICS leaders have been careful to insist that the bloc is not anti-Western. But it is the Western sanctions, which have been imposed on Moscow since Russia launched its military campaign in Ukraine 18 months ago, that have united its members.

“We express our concern about the use of unilateral coercive measures, which are inconsistent with the principles of the UN Charter and have negative impacts, especially on developing countries,” the BRICS leaders said in a joint statement.

World - Victory for China and Russia after historic BRICS decision — From left: Brazilian President Luiz Inacio Lula da Silva, Chinese President Xi Jinping, South African President Cyril Ramaphosa, Indian Prime Minister Narendra Modi and Russian Foreign Minister Sergei Lavrov (representing Russian President Vladimir Putin) at the BRICS Summit in Johannesburg, August 24, 2023. Photo: Getty Images

BRICS members are also united by a desire to reduce reliance on the US dollar in global trade, although they are still considering how to do that.

BRICS leaders agreed to ask their Finance Ministers and Central Bank Governors to study the issue – which could eventually lead to the use of a BRICS common currency for internal trade.

BRICS, where China is the leading economy, is emerging as a major rival to the Western-led Group of Seven (G7). While the G7 will continue to maintain a large share of global GDP, the expanded BRICS bloc will significantly outperform the G7 when economies are measured on the basis of GDP at purchasing power parity (PPP).

“This decision to expand membership is historic,” Chinese President Xi Jinping said after the announcement. “It demonstrates the BRICS countries’ determination to unite and cooperate with the broader developing world.”

Mr Xi has been an enthusiastic supporter of new membership, suggesting that BRICS expansion is a way for the Global South to have a stronger voice in world affairs.

Indian Prime Minister Narendra Modi said it was an example of other global organizations established in the 20th century that have become obsolete.

“The expansion and modernization of BRICS is a message that all institutions in the world need to adapt to changing times,” Modi said.

Russian President Vladimir Putin, speaking online to the summit, thanked South African President Cyril Ramaphosa for his “unique diplomatic skills,” noting that negotiations on all issues, including the expansion of BRICS, were “challenging work.”

World - Victory for China and Russia after historic BRICS decision (Figure 2). — Chinese President Xi Jinping walks past Russian Foreign Minister Sergei Lavrov and Chinese Foreign Minister Wang Yi at the BRICS Summit in Johannesburg, August 24, 2023. Photo: KSAT

However, it is unclear how much the expansion will significantly increase BRICS influence on the global stage. That will likely depend on their ability to act together, analysts say.

“It is not entirely clear what the newest members of BRICS will gain from their membership in the bloc,” said Margaret Myers, director of the Asia and Latin America program at the Inter-American Dialogue. “At least for now, the move is more symbolic than anything else – a sign of broad-based support in the Global South for a reordering of the global order.”

A victory

In its joint statement, BRICS gave no hint as to why it chose the six new members, but most are countries looking to expand their sphere of influence in the Middle East or the Horn of Africa.

“It is an equal partnership between countries with different perspectives but a common vision for a better world,” said South African President Ramaphosa, who is chairing this BRICS Summit.

Despite its diversity, the expanded BRICS would have a more formidable economic influence, with six of the world’s 10 largest oil producers as members. This would make it easier for members like Russia and China to withstand any future Western sanctions.

“For China and Russia, this is a win. Beijing and Moscow have been pushing this for more than five years,” said Ryan Berg, director of the Americas Program at the Center for Strategic and International Studies (CSIS).

“For China, it allows them to continue building what they hope is a Beijing-centric order. For Russia, which will hold the rotating presidency of BRICS next year, they see this as a huge opportunity at a time of considerable isolation,” the expert said.

In addition to dealing with Western sanctions, BRICS also provides another incentive for Russia as the bloc seeks alternatives to the international payment system SWIFT. The West blocked some Russian banks from accessing the SWIFT system last year, shortly after the conflict in Ukraine broke out. The sanctions have made Russian trade more difficult.

In a joint statement on August 24, BRICS leaders said they had agreed to cooperate on payment instruments to facilitate trade and investment between members and other developing countries.

“We are concerned that the global financial and payments system is increasingly being used as a tool for geopolitical disputes,” Ramaphosa said in his speech at the summit on August 23 – an apparent reference to the banning of some Russian banks from SWIFT.

World - Victory for China and Russia after historic BRICS decision (Figure 3). — Russian President Vladimir Putin listens to BRICS leaders speaking via video link at the BRICS Summit in Johannesburg, August 23, 2023. Photo: Sputnik

UN Secretary-General António Guterres, in his speech at the BRICS Summit on August 24, did not directly mention the BRICS expansion announcement but expressed concern about the “fragmentation” of the world.

Mr. Guterres – attending the conference as a guest – called for greater global cooperation to reform and strengthen multilateral institutions such as the World Bank (WB), the International Monetary Fund (IMF) and the United Nations Security Council (UNSC).

“We cannot afford a world with a divided global economy and financial system, with different technological strategies, including artificial intelligence (AI), and conflicting security frameworks,” Mr. Guterres said. “In a fractured world with crises abounding, there is simply no choice but to cooperate . ”

Minh Duc (According to The Guardian, The Globe and Mail)

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