BRICS Summit proved a triumph. Over the course of the last year, over 40 countries have expressed interest in joining BRICS. At the Summit, the previous five members became eleven, and no doubt more will follow. BRICS now represents 37% of global GDP. The developing world has acquired a powerful new voice on the global stage. And as further new members are added, its influence will surely grow.
A BRICS Summit has never commanded such global interest as its 15th Summit starting in Johannesburg on Tuesday. BRICS was originally launched at a time when the world was waking up to the rise of China, India, Brazil, and Russia. Born in 2009, in the immediate aftermath of the Western financial crisis, it signaled the growing importance of the developing world. From the outset, it represented and articulated a desire for an alternative to the Western-dominated, post-1945 global order. The subsequent addition of South Africa in 2010 enhanced both its representivity and legitimacy.
In the period since, BRICS has tended to operate in the background, somewhat in the shadow of the rise of China and India, and the success of Belt and Road Initiative. But BRICS has never gone away. It has steadily grown and in the process broadened its role, most notably with the formation of the New Development Bank in 2015. Now once more it is commanding global attention. The long-term reason is that, even though the developing world – home to 85 percent of the world’s population – is largely excluded from the institutions of the post-1945 global order, its importance in the real world has continued to grow relentlessly. The developing world accounts for about 60 percent of global GDP. The developing world is now knocking on the door of the institutions of the global order, demanding to be recognized and enfranchised, its knock getting ever louder and more insistent.
There is, however, another more immediate reason why BRICS is very much back in the news and that is the Ukraine war. The Western playbook had assumed that the Ukraine war would be a replay of the Cold War, the US and Europe versus Russia. The West took the developing world for granted and assumed it would side with the West. It didn’t. Most developing countries remained non-aligned. And they grew increasingly angry and alienated by the way in which the West studiously ignored their problems and held the Ukraine war to be of far greater importance. They refused to impose Western-inspired sanctions on Russia, thereby considerably undermining their effectiveness. The West has been grudgingly forced to recognize, at least partially, that the developing world could no longer be ignored, that the world was not binary but multi-polar, and could not be bossed in the manner of old. In the meantime, it is becoming ever clearer that the West will not win the war in Ukraine. We are in new times. The developing world has a stronger voice and is demanding that it be listened to. This is why the BRICS Summit is now commanding such attention. As the main voice of the developing world, people want to know what BRICS will do next.
In the event, BRICS is discussing two of its most important ever reforms in Johannesburg: the addition of new members, the first since 2010, and the hot-button issue of currency policy. The months leading up to the summit have seen a dramatic number of developing countries expressing interest in becoming members of BRICS. 23 countries have applied to join, including Iran, Saudi Arabia, Argentina, Pakistan, Vietnam, Bangladesh, and Nigeria. This interest has greatly boosted the importance and legitimacy of BRICS, greatly enhancing its reputation and status as the representative of the developing world. There are unlikely to be any new additions to its membership at the summit: rather it will consider proposals from South Africa, the chair of the summit, about what the possible criteria for expansion might be. This obviously requires the most tactful diplomacy. Rather like the 10 members of ASEAN, which reach all their decisions by consensus rather than voting, BRICS, given its even greater diversity, should, as far as possible, operate by the same principle.
The other subject which has attracted widespread interest concerns BRICS’s currency policy. The idea of a BRICS currency – as a potential rival to the dollar – has been widely discussed, although it is not on the agenda. The fact is, however, that it is almost certainly a non-starter. The membership of BRICS is too imbalanced and too diverse for it to be workable. There is only one member of BRICS that could potentially play such a role and that is China, but even for yuan such a suggestion would still be premature. What is under active consideration, however, is the idea of trade between BRICS being settled in local currencies rather than the US dollar. This has great merit; there is already much talk about trade being settled in this way and it is already beginning to take place. This would have the effect of weakening the role and power of the dollar, which is one of the biggest inequities in the global trading system.
The great strength of BRICS is its growing ability to act as an overarching representative of the developing world. Its weakness is its diverse composition and the fact that the views of its members vary considerable. The challenge facing BRICS will be its ability to widen its membership while at the same time maintaining its cohesion.