Narsee Monjee College’s

Model United Nations

Agendas:
A new BRICS+ currency: creation of a new currency
empowering the developing countries and reducing dollar
dependency
 INDEX
1. Introduction
I
pg 3-5

2. History pg 6-8

3. Member Nations pg 9-11

4. Current Affairs pg 12-13

5. Agendas
a) New Currency Creation pg 14-15
b) Reduced Dependency of the Dollar pg 16-18

6. What the Future Holds? pg 19-22

 Introduction To BRICS
What is BRICS?
BRICS is an acronym that started as BRIC in 2001, coined by Jim O’Neill (a
Goldman Sachs economist) for Brazil, China, India, and Russia. Later in
2010, South Africa was added to become BRICS. Goldman Sachs claimed
that the global economy will be dominated by the four BRIC economies by
2050. The main reason for such a claim was that China, India, Brazil,
Russia, and South Africa were ranked among the world's fastest-growing
and emerging market economies for years. The main comparative advantage
of this group is their low labour costs, favourable demographics, and
abundant natural resources at the time of the global commodities boom.
BRICS brings together five of the largest developing countries of the world,
representing around 41% of the global population, around 24% of the
global GDP and around 16% of global trade.
BRICS cooperation has two mechanisms of cooperation– consultation on
issues of mutual interest through meetings of Leaders and Ministers and
practical cooperation through meetings of Senior Officials in a number of
areas including Trade, Finance, Health, Education, Science & Technology,
Agriculture, Environment, Energy, Labour, Disaster Management, Anti-
Corruption, Anti-Drugs, etc. BRICS Business-to-Business engagement is
through BRICS Business Council and BRICS Women Business Alliance.
Other BRICS exchanges can broadly be categorised as Parliamentary
Exchanges, Seminars/Conferences, Business, People-to-people exchanges
and Track II meetings. The BRICS Ministers of Foreign Affairs and
International Relations met on 01 June 2023 in Cape Town, South Africa
and adopted a Joint Statement. Meetings are also held on the side lines of
multilateral events.
Role of BRICS:
During the years of existence and development, BRICS has been in a
constant process of transformation. However, we must emphasise the essence
of the creation of this format—the consolidation of the countries which are
projected by leading analysts of the world to become the world’s most
powerful economies in the 21st century. This also brings the understanding
of the critical role of the BRICS in global processes of building a new world
order through the consolidation of international efforts. Such format fulfils
the function of an ‘architect of globalisation’, laying the foundation for a
new global construction, made of ‘bricks’, whose strength will depend on
how long our common planetary home will stand. BRICS are at the
forefront of using their economic weight to induce change, which is
challenging traditional western donors in general and the EU in particular.
The impacts of BRICS’ development policies are analysed in particular with
regard to Low Income Countries (LIC). These relations follow the idea of
South-South-Cooperation (SSC), which is based on solidarity, shared
experiences and self-reliance of the South (Yamoussoukro 2008). Thereby,
BRICS – LICs relations are not restricted to financial assistance. Trade,
foreign direct investment (FDI) and development financing are often
intertwined and come as a package. By and large, there are remarkable
spillovers and positive impacts, especially regarding trade. These ties have
helped lessen the effects of the recent financial crisis on LICs and contributed
to economic development. However, many LICs still rely too much on
exports of primary commodities and are in need of diversification and
improved technologies for their industries. Overall, size, key areas and
institutional settings of foreign assistance are differing among BRICS, yet a
number of similarities can be identified: The overall focus of development
cooperation lies on neighbouring countries and regional integration.
Trade, investments and economic growth are perceived to be the main
vehicle for improvement in development.
Noninterference and national sovereignty are guiding principles, whereas
social standards and governance issues are not the main concern. BRICS are
concentrating on technical rather than financial assistance and a
considerable share of aid is disbursed through bilateral channels.
India’s role in BRICS:
India spent almost $4 billion in South Africa, and the Global Executive
Development Program was established to equip the workforce. India has
taken a number of encouraging steps to promote trade, including plans for a
digital, open-access BRICS platform. It has established an independent
BRICS credit rating agency to allow members to correlate their ranks with
other developing countries rather than other members.India is considered as
a strong voice in the BRICS and the UN, speaking out against policies or
actions that may harm the interests of any member. For example, India
turned down China’s request to join the BRICS for Pakistan, Sri Lanka,
and Mexico. India believed that focusing on developing existing members
rather than accepting new members would suffocate the BRICS as a
coalition and that it may follow the European Union’s path.

Importance of BRICS for India:

India has been an active participant in this organisation from its inception.
Maintaining economic growth that benefits India’s citizens in terms of job
creation, GDP growth, and poverty alleviation are in the country’s national
interest.
This forum serves as an alternative global mechanism for promoting economic
and social growth, particularly at a time when global institutions and order
are under significant stress (US actions on the economic front, climate change,
geopolitical uncertainties around the world). India hopes to use this platform
to strengthen ties with Africa and South America, continents that have been
overlooked due to the “tyranny of distance” until recently.
 Historic Background of BRICS :
BRICS is an informal group of states comprising the Federative Republic of
Brazil, the Russian Federation, the Republic of India, the People’s Republic of
China and the Republic of South Africa.
It was the Russian side that initiated the creation of BRICS.
On 20 September 2006, the first BRICS Ministerial Meeting was held at the
proposal of Russian President Vladimir Putin on the margins of a UN General
Assembly Session in New York. Foreign ministers of Russia, Brazil and China
and the Indian Defence Minister took part in the meeting. They expressed their
interest in expanding multilateral cooperation.
On 16 May 2008, Yekaterinburg hosted Meeting of BRICS Foreign Ministers
on the initiative of Russia. After the meeting, a Joint Communique was issued,
reflecting common stances on topical global development issues. Another
important step was taken on 9 July 2008, when Russian President Dmitry
Medvedev met with Brazilian President Luiz Inacio Lula da Silva, Indian
Prime Minister Manmohan Singh and Chinese President Hu Jintao on the
margins of the G8 Summit in Toyako, Japan, on the Russian initiative.
On the Russian initiative on 16 June 2009, Yekaterinburg hosted the first
BRIC Summit. BRIC Leaders issued a joint statement after the Summit. The
document set forth the goals of BRIC “to promote dialogue and cooperation
among our countries in an incremental, proactive, pragmatic, open and
transparent way. The dialogue and cooperation of the BRIC countries is
conducive not only to serving common interests of emerging market economies
and developing countries, but also to building a harmonious world of lasting
peace and common prosperity.” The document outlined a common perception
of ways to cope with the global financial and economic crisis. The growing
economic might of BRICS countries, their significance as one of the main
driving forces of global economic development, their substantial population
and abundant natural resources form the foundation of their influence on the
international scene.
In 2013, BRICS accounted for about 27 percent of the global GDP (in terms
of the purchasing power parity of their national currencies). The total BRICS
population is 2.88 billion (42 percent of the entire global population), and the
five countries cover 26 percent of the planet’s land.
BRICS countries are influential members of leading international
organisations and agencies, including the UN, the G20, the Non-Aligned
Movement and the Group of 77. They are also members of various regional
associations. The Russian Federation is a member of the Commonwealth of
Independent States, the Collective Security Treaty Organisation and the
Eurasian Economic Union. Russia and China are members of the Shanghai
Cooperation Organisation and the Asia Pacific Economic Cooperation. Brazil
is a member of the Union of South American Nations, MERCOSUR and the
Community of Latin American and Caribbean States. The Republic of South
Africa is a member of the African Union and the Southern African
Development Community. India is a member of the South Asian Association
for Regional Cooperation.
Relations between BRICS partners are built on the UN Charter, generally
recognised principles and norms of international law and the following
principles, which were agreed by member countries at their 2011 Summit:
openness, pragmatism, solidarity, non-bloc nature and neutrality with regard
to third parties.
BRICS work is based on action plans approved during annual summits since
2010.
The system of cooperation formats between BRICS countries includes annual
scheduled summits (2010 – Brazil; 2011 – China; 2012 – India; 2013 – South
Africa; 2014 – Brazil; 2015 - Russia; 2016 - India), leaders’ meetings on the
sidelines of G20 summits, meetings between high representatives responsible
for national security, foreign ministers (on the sidelines of the UN General
Assembly), ministers of finance and governors of central banks (on the
sidelines of autumn and spring meetings of the International Monetary Fund
and World Bank boards of governors and also on the sidelines of meetings of
G20 ministers of finance), ministers of agriculture and agrarian development,
BRICS sherpas and sous-sherpas, heads of statistical and anti-monopoly
departments, senior officials for science and technological and innovation
cooperation, meetings of working cooperation groups for agriculture and
agrarian development, healthcare, information security, science and
innovation, meetings of chairpersons of supreme (high) courts, heads of
central election commissions, and representatives of municipal administrations
and partner regions.
Cooperation between national BRICS permanent missions at the UN
Headquarters in New York, at international organisations in Geneva and
Vienna and at UNESCO in Paris plays an important role in the mechanism of
multilateral cooperation.
Apart from joint events involving executive agencies and the judiciary branch,
business organisations and research centres cooperate within the BRICS
format.
 Member Nations :
The BRICS bloc of developing nations agreed on Thursday to admit Saudi
Arabia, Iran, Ethiopia, Egypt, Argentina and the United Arab Emirates in a
move aimed at accelerating its push to reshuffle a world order it sees as
outdated.
In deciding in favour of an expansion - the bloc's first in 13 years - BRICS
leaders left the door open to future enlargement as dozens more countries
voiced interest in joining a grouping they hope can level the global playing
field.
The expansion adds economic heft to BRICS, whose current members are
China, the world's second largest economy, as well as Brazil, Russia, India and
South Africa. It could also amplify its declared ambition to become a
champion of the Global South.
But long-standing tensions could linger between members who want to forge
the grouping into a counterweight to the West - notably China, Russia and
now Iran - and those that continue to nurture close ties to the United States
and Europe.
"This membership expansion is historic," Chinese President Xi Jinping, the
bloc's most stalwart proponent of enlargement, said. "It shows the
determination of BRICS countries for unity and cooperation with the broader
developing countries."
 Food for thought section
- India & China’s diplomatic ties can be described as
‘sometimes cooperators, sometimes foes’
“India–China clashes along the LAC and consequences for
BRICS”
Chinese border activities in May 2020 or as Indian Foreign Ministry states,
efforts to ‘unilaterally change the status quo’ (Reuters, 2020) along the LAC
have led to quarrels, standoffs and brawls between troops from the two
countries. On 15 June 2020, soldiers from the two countries clashed at the
Galwan Valley in which 20 Indian soldiers and an undisclosed number of
Chinese soldiers died. China’s Foreign Ministry maintains that India provoked
the clash (Zhao, 2020) and that the onus is on India to restore peace and
stability along the LAC by accepting the status quo. On the other hand, India
wants to restore the status quo ante that is the pre-May 2020 position along
the LAC. Multiple rounds of talks at the military and diplomatic level have
failed to break the impasse. Both sides have placed thousands of troops and are
upgrading infrastructure and military capabilities in this area.
The Galwan Valley clash has led to anti-China sentiments in India. There is
pervasive consensus among the Indian elite that China is a hostile power and
India’s primary and permanent security threat: Chinese actions have turned
Sinophiles into Sinophobes with China hawks now ascendant in New Delhi
(Rachman, 2020). The clash has led to calls for economic decoupling from
China. The Indian government has undertaken measures to reduce its
economic dependence on China. It has directed public and private online-
retailers including Amazon India and Flipkart to specify the country of origin
and local content in their products so that Indian consumers can refrain from
buying Chinese goods. It has also banned Chinese companies from investing in
projects in India and banned more than two hundred Chinese mobile apps
including Tik Tok and WeChat on the grounds of national security (Pandey,
2020).
The federal government and some state governments have cancelled and put on
hold contracts provided to Chinese companies leading to an INR510 billion
loss for Chinese companies (Pandey, 2020).
There is a broad consensus among analysts that the India–China standoff in
Ladakh will push India into the arms of the US. In the new millennium, India
and the US have strengthened political, diplomatic, strategic and defence ties:
China’s assertive foreign policy in the Asia-Pacific providing the impetus for
the burgeoning relationship. The US considers India a linchpin of its Indo-
Pacific strategy and wants India to counterbalance/counterweigh China in the
region. US President Biden has stated that ‘India–US partnership is the
defining relationship of the 21st century, and he plans to strengthen ties
between the two countries’ (Bloomberg, 2020).
China has been wary of the Quadrilateral Security Dialogue (QUAD) (India,
US, Japan and Australia) and views the group as an anti-China alliance.
Keeping in mind China’s sensitivities, India had refrained from inviting
Australia to join the Malabar naval exercises with the US and Japan despite
Australia’s willingness to participate in the annual naval exercise. Post-
Galwan Valley clash, India invited Australia and the latter joined the Malabar
exercise. This has reactivated the QUAD (which last held such an exercise in
2007) and provided a military and security dimension to the grouping. It can
be argued that the QUAD will have an anti-China dimension and this will pose
a huge challenge for China in the Indo-Pacific, particularly if QUAD
transitions into QUAD Plus to include South Korea, New Zealand, Vietnam
and other countries. Yet it can also be argued that the most recent BRICS
summit in 2020 illustrates that India and China are willing to enhance BRICS
security cooperation, as they agreed to deepen and operationalize cooperation
on counter-terrorism. BRICS experts discuss the evolution of BRICS in the
context of progressively sharper India–China conflict. How is the India–China
conflict affecting the BRICS group: is BRICS a victim of conflict or a pacifying
force? Is the current conflict redefining or undermining BRICS cooperation?
 Current Affairs involving BRICS :
The 15th BRICS Summit took place in Johannesburg, bringing together
leaders from Brazil, Russia, India, China, and South Africa. The summit
aimed to enhance cooperation among these emerging economies, discuss
global concerns, and potentially expand the group’s membership.
BRICS Summit 2023: Opening and Leaders’ Participation
The 15th BRICS Summit occurred in Johannesburg, focusing on the
cooperation of the BRICS nations – Brazil, Russia, India, China, and South
Africa.
The summit marked the first in-person meeting of BRICS leaders since
2019, reflecting the significance of discussing shared issues.
Prime Minister Narendra Modi of India and Chinese President Xi Jinping
were among the leaders attending.
Modi emphasised the importance of the summit for addressing issues
concerning the Global South and developmental matters.
BRICS Summit 2023: Expanded Dialogue and Outreach
Prime Minister Modi announced his participation in BRICS-Africa
Outreach and BRICS Plus Dialogue events, highlighting the intention to
engage with other nations beyond the core BRICS grouping.
The inclusion of guest countries provided an opportunity for broader
discussions on global challenges and development.

Diplomatic Engagements:
Chinese President Xi Jinping arrived in Johannesburg for the summit,
focusing on enhancing China’s involvement in global affairs.
Xi’s change of plans, skipping a business forum and sending the Chinese
Commerce Minister, raised questions about the reasons behind this
decision.
African countries urged China to shift its focus from infrastructure
development to local industrialization to align with the Africa Continental
Free Trade Agreement (AfCFTA).
BRICS Summit 2023: Key Addresses and Vision
Leaders like Modi, South African President Cyril Ramaphosa, and Brazilian
President Luiz Inacio Lula da Silva emphasised the significance of BRICS in
fostering cooperation among developing nations.
Ramaphosa highlighted the need for global financial institutions to undergo
reform to better address the challenges faced by developing economies.
Brazilian President Lula da Silva clarified that BRICS aimed to organise the
Global South and was not meant to rival established powers like the United
States and G7 economies.
BRICS Summit 2023: Expansion Ambitions
The possibility of expanding BRICS to include more countries generated
discussions during the summit.
China and Russia’s aspirations to bolster BRICS aimed to counterbalance the
influence of Western powers amid global tensions.
South African President Ramaphosa expressed support for expanding BRICS
and revealed that over 20 nations, including Saudi Arabia, Indonesia, and
Egypt, had formally applied to join.
BRICS Summit 2023: Collective Influence and Global Partnerships
President Xi Jinping called for increased collaboration between China and
South Africa to bolster their influence in international affairs, particularly in
the Global South.
Xi emphasised support for South Africa’s greater role in the G20,
highlighting the nations’ partnership and pursuit of justice in global affairs.
BRICS Summit 2023: Economic and Growth Aspects
Prime Minister Modi highlighted India’s rapid economic growth and
projected it to become a $5 trillion economy in the near future.
BRICS nations sought to strengthen cooperation to address economic
challenges and enhance their combined influence on the global stage.
 Agenda
1)New Currency Creation:
In the evolving landscape of international trade and geopolitics, the BRICS
nations — Brazil, Russia, India, China, and South Africa — have garnered
significant attention with their discussions about a potential common
currency. The underlying goal is to diminish their reliance on the US dollar
and fortify intra-BRICS trade. As of now, a definitive date for the BRICS
currency’s release remains uncertain.

BRICS’s Plan for a Common Currency:

The alliance formed by Brazil, Russia, India, China, and South Africa, better
known as BRICS, has been entertaining the notion of a shared currency.
Envisioned as a basket of the five member nations’ currencies, it aims to foster
and streamline trade interactions within the bloc.

India’s Perspective and Concerns:

Out of the BRICS nations, India exhibits reservations regarding this initiative.
The primary concern revolves around jeopardising its significant trade
relations with the Western nations. Even so, the nation remains open to future
deliberations on this matter.

Gold-Backed BRICS Currency: The Current Scene

Speculations about the BRICS nations pondering over a gold-backed currency
have been rife. However, this idea currently isn’t the primary focus. The
volatile nature of gold prices poses a challenge for it to serve as a steady
foundation for such a currency.
The Push to Wean off the Dollar:
One clear motivation behind this BRICS endeavour is to lessen the dollar’s
dominance. With the US dollar’s reliability as a reserve currency wavering due
to increasing inflation and other factors, the BRICS nations are inclined to
seek alternatives.

BRICS Growth and Hurdles Ahead:

In addition to mulling over a joint currency, there’s talk of expanding the
BRICS bloc to incorporate other nations. Such an expansion could potentially
elevate the acceptance and reach of the BRICS currency. However, aligning
every member’s interests and reaching a consensus remains a challenge.

Anticipated Timeline and Lead Players:

Although a fixed timeline for the BRICS currency hasn’t been unveiled, steps
towards its realisation are evident. Russia emerges as a significant advocate for
this movement, spearheading the shift towards national currency-based
settlements.

The Advent of BRICS’s New Reserve Currency:

BRICS’s exploration into setting up a new reserve currency is noteworthy.
Structured around the currencies of its five members, this potential reserve
currency seeks to address the economic interests of the bloc effectively.
South Africa is poised to host a pivotal BRICS summit where the feasibility of
this common currency will be a hot topic. South Africa’s foreign minister has
indicated the group’s collective openness to engage in this discussion.

Conclusion:
The proposition of a BRICS currency undeniably presents a potential shift in
global economic dynamics. As developments unfold, the world watches with
bated breath to witness the impact and evolution of this initiative.
2)Reduced Dependency on Dollar:

For 80 years, the United States dollar has dominated all other currencies.
As it stands, the dollar is used in over 74 percent of all international trade,
90 percent of currency exchanges, nearly 100 percent of oil trades and just
under 60 percent of all foreign currency reserves held by central banks.
And due to its status as the most widely used currency for conversion and
its use as a benchmark in the forex market, almost all central banks
worldwide hold dollars. A grouping of developing countries tired of the
West’s looming presence over global governance and finance is determined
to take it down a peg. The process of de-dollarisation is “irreversible” and
“gaining pace”, Russian President Vladimir Putin said on Tuesday in a
virtual address to the BRICS summit in Johannesburg, where the leaders
of Brazil, India, China and South Africa are gathered for three days.

Calls for a global shift away from dollar dominance are not new, nor are
they unique to BRICS, but experts say recent geopolitical shifts and
growing tensions between the West and Russia and China have brought
them to the fore.In early 2022, Western sanctions over Russia's invasion of
Ukraine froze nearly half of Russia’s foreign currency reserves and
removed major Russian banks from SWIFT, a messaging network banks
use to facilitate international payments.
Later in the year, the US imposed restrictions on exports of semiconductor
technology to China.
The impetus for Global South countries trying to find an alternative is
more a “practical consideration” than a moral one, said Gustavo de
Carvalho, a policy analyst on Russia-Africa ties at the South African
Institute of International Affairs, as they view the recent sanctions and
ask:
“What are the risks that we are facing by engaging with one currency
globally that may be utilised for political purposes?”.
The proponents of de-dollarisation say that this process would reduce
other countries’ dependence on the US dollar and the US economy, which
could help mitigate the impact of economic and political changes in the
US on their own economies. Moreover, countries can reduce their
exposure to currency fluctuations and interest rate changes, which can
help to improve economic stability and reduce the risk of financial crises.
This move has been gaining speed in the last few years, especially in the
previous year. In 2022, the International Monetary Fund noted that
central banks today are not holding the greenback as reserves in the same
quantities as yesteryear.

If the BRICS nations do go ahead with their plan and come up with a new
currency, it could help stabilise their economies. For an investor in BRICS
countries, it would mean increased consumer confidence. This would lead
to an uptick in spending and economic growth.
If BRICS nations opt to hold significant portions of their foreign reserves
in their new currency, demand for the US dollar could recede. This shift
could lead to a depreciation of the dollar’s value, altering global trade
dynamics. The collective decision of BRICS nations on managing their
vast foreign exchange reserves could have implications for the US dollar’s
value.

It remains to be seen how these dynamics play out, with potential scenarios
ranging from negligible impact to significant dollar depreciation.
As the reliance on US dollars diminishes, central banks will begin
dumping their dollar reserves. This will result in hyperinflation, a spike in
interest rates to compensate for the loss of purchasing power, and falling
asset prices, further accelerating US decline.
The trend of de-dollarisation is occurring – but it is not something
unique. The rise and fall of empires and reserve currencies are apparent
throughout history – from the Dutch Empire and the guilder to the
British Empire and the pound sterling, and now the US Empire and the
dollar. There will inevitably be a shift in the world order, and it may well
be the BRICS’ time.
The BRICS countries have a combined gold reserves of 5,352 tons,
which makes them the second largest owner of gold reserves after the
US, which has 8,133 tons. China has quadrupled its gold reserves over
the past twenty years, as shown below.

BRICS countries are wisely exploring gold-backed currencies. For

example, in March 2022, Russia announced they were linking the ruble to
gold at five thousand rubles per gram and requiring payment for their
exports in rubles. It was also recently reported that Russia and Iran are
working on a new “stablecoin” cryptocurrency backed by gold to compete
with the dollar.How ironic if the “free market” US were outcompeted by
an even more free-market currency created by the likes of Russia, China,
and Iran.
Unless the BRICS are willing to give up the power to create money out of
thin air and create a currency that is backed 100 percent by gold or other
commodities, any new currency will likely suffer the same problems as the
dollar and other fiat currency.
 What the future holds for BRICS?
After new currency:

De-dollarization has been on the rise following Russia's war in Ukraine.The

most ambitious course of action would be to implement a single currency like
the Euro. Easier said than done. Negotiating a single currency within the
BRICS could be challenging due to differing economic power and intricate
political dynamics. The BRICS bloc is more a strategic balance against the G7-
led developed world rather than a unified economic structure. For a new
currency to succeed, the BRICS should agree on an exchange rate mechanism
to phase out their own sovereign currencies, set up a new central bank, and
possess efficient payment systems as well as a well-regulated, stable, and liquid
financial market. To establish global currency status, the BRICS nations
would need a solid history of cooperative currency management to assure
others of the new currency's reliability. Creating a BRICS equivalent of the
Euro seems implausible today. None of the involved countries exhibits any
inclination to discontinue its local currency. Furthermore, China is intent on
raising the power of the renminbi internationally. There is a significant
economic disparity between China and the other BRICS nations. Though India
will remain the fastest-growing major economy in the next three years, its
GDP is only about one-fifth that of China.
A more reasonable goal would be enhancing the BRICS Interbank
Cooperation Mechanism, established to streamline cross-border transactions
between BRICS banks in their local currencies. In the last 12 years, member
banks have penned multilateral collaboration agreements in various fields
including local currency credit, sustainable development, infrastructure
finance, fintech, and responsible finance. These concerted efforts have
produced a strong impetus for financial cooperation within the BRICS as well
as the facilitation of trade and investment.
Despite the hurdles to de-dollarization, it is important not to underestimate
the resolve of the BRICS group. The bloc has already overcome major crises
such as the Russo-Ukrainian conflict to strengthen its collaboration, pour
investment into new financial institutions, and consistently expand its policy
discussion spectrum.
Even if there is no advancement towards a shared currency, there are numerous
matters on which central bankers from BRICS regularly synchronize,
demonstrating robust potential for cultivating new financial partnerships. A
new global economic order won't arise merely from introducing a unified
currency. Rather, it could potentially stem from BRICS’ commitment to
better-coordinating trade policies, especially through bilateral agreements.
After expansion:
Many, especially in the West, had predicted a significant rift among BRICS
members over expansion of the five-member group. There was speculation that
while China was keen on expanding the footprints of the bloc, India and Brazil
were not particularly interested in furthering the scope of a China-dominated
arrangement. China as the second largest economy in the world has the highest
GDP among BRICS nations and lends economic weight to the group.
Differences over procedure as well as how many and which countries should be
admitted were expected to result in hours of wrangling among members.
Despite these misgivings, the process was remarkably smooth. At the end of the
15th BRICS Summit, South African President Cyril Ramaphosa announced
that Iran, Saudi Arabia, United Arab Emirates (UAE), Egypt, Ethiopia, and
Argentina would be formally inducted into the group. They would become
full-fledged members by January 2024. This is a significant move considering
that Saudi Arabia, UAE, and Iran are major oil-producing countries and
members of OPEC. In a not-too-distant future, BRICS could pose a major
challenge to the current Western-led global financial institutions. The
developing nations have often been critical of the World Bank and the
International Monetary Fund (IMF), which they have say have been geared to
look after the interests of the rich industrialised world.
Despite the hurdles to de-dollarization, it is important not to underestimate
the resolve of the BRICS group. The bloc has already overcome major crises
such as the Russo-Ukrainian conflict to strengthen its collaboration, pour
investment into new financial institutions, and consistently expand its policy
discussion spectrum.
Even if there is no advancement towards a shared currency, there are numerous
matters on which central bankers from BRICS regularly synchronize,
demonstrating robust potential for cultivating new financial partnerships. A
new global economic order won't arise merely from introducing a unified
currency. Rather, it could potentially stem from BRICS’ commitment to
better-coordinating trade policies, especially through bilateral agreements.
After expansion:
Many, especially in the West, had predicted a significant rift among BRICS
members over expansion of the five-member group. There was speculation that
while China was keen on expanding the footprints of the bloc, India and Brazil
were not particularly interested in furthering the scope of a China-dominated
arrangement. China as the second largest economy in the world has the highest
GDP among BRICS nations and lends economic weight to the group.
Differences over procedure as well as how many and which countries should be
admitted were expected to result in hours of wrangling among members.
Despite these misgivings, the process was remarkably smooth. At the end of the
15th BRICS Summit, South African President Cyril Ramaphosa announced
that Iran, Saudi Arabia, United Arab Emirates (UAE), Egypt, Ethiopia, and
Argentina would be formally inducted into the group. They would become
full-fledged members by January 2024. This is a significant move considering
that Saudi Arabia, UAE, and Iran are major oil-producing countries and
members of OPEC. In a not-too-distant future, BRICS could pose a major
challenge to the current Western-led global financial institutions. The
developing nations have often been critical of the World Bank and the
International Monetary Fund (IMF), which they have say have been geared to
look after the interests of the rich industrialised world.
Brazil, Russia, India, China and South Africa are all on the same page on the
need for an alternative to the Bretton Woods institutions.
Already, the BRICS group is expected to surpass the GDP of G7 nations this
year. According to the IMF, the bloc will account for 32.1 per cent of global
GDP in 2023, against the G7’s share of 29.9 per cent. The addition of a
further six nations will allow BRICS to give the West a run for its money. The
G7 comprises the United States, the United Kingdom, Canada, France, Japan,
Germany, and Italy.

BRICS is a challenge to the established political and economic order in place

since the end of the World War II. China, Russia, and Iran are certainly anti-
US. Saudi Arabia is having major differences with the United States on certain
issues. However, India, Brazil, and Egypt are not in the China camp. Nor is
UAE. There are differences among many of the member states, and India and
China are locked in a military stand-off in Ladakh since the summer of 2020.
Tension between the two Asian giants continue, yet both countries agree on
reforming the existing international system and build alternatives to the
current US-dominated economic and political order.
he new 11-member BRICS will add both economic and political weight to the
bloc. American commentators regard the expansion as a major win for China.
However, as pointed out earlier, there are major differences within the
members and the bloc could well see pulls and pressures in different directions
that would reduce its effective functioning.
Yet this is the first tentative step at working towards an alternative political
and economic order. Whether it will succeed is a million-dollar question!
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