De-dollarization, Six New Members, and Internal Rivalry: A Summary of the 15th BRICS summit 

BRICS economy and policies concept : Flags of BRICS or group of five major emerging national economy i.e Brazil, Russia, India, China, South Africa. BRICS members are all leading developing countries.

Did you miss the main events at the 15th BRICS summit? We’ve got you covered.

By Emil Bjerg, journalist and editor 

This year’s BRICS summit was met with more anticipation than usual. Would Putin attend in person? Would BRICS invite new member states as Xi Jinping has been advocating? Would they present a new currency, as it has been teased recently? By the time of writing, at the end of the summit, the anticipation proved to be warranted. 

The 15th BRICS summit took place in a tense world. With Russia’s war in Ukraine and China’s deepening rivalry with the US, several BRICS countries are at the center of the world’s most significant geopolitical conflicts. 

In a divided world, the BRICS countries have some momentum – the BRICS ethos of uniting the rest against the hegemonic West resonates in many parts of the world. At the same time, the alliance appears tested by internal division and rivalry. 

We take the temperature on the BRICS collaboration and cover the main events at the South African summit. 

Putin’s no-show 

In the early summer, it was a heated topic in South Africa whether or not the country should welcome Putin. Technically, they could hardly do so as they’ve signed the Rome Statute and thus have to follow the arrest order from the International Criminal Court that obliges South Africa to arrest Putin for war crimes. 

In the end, South Africa was offered an easy way out when Putin announced that he wouldn’t join. Instead, he attended the summit virtually. Physically, Putin was represented by his foreign minister, Sergei Lavrov, who can still travel. 

Xi Jinping and the prospect of a growing alliance 

Xi Jinping also drew significant attention during the summit when he was absent from his scheduled speech. Instead, Jinping’s speech was delivered by China’s Minister of Commerce. The reason for the delegation of the speech is still unknown, making China expert, Bill Bishop, note that there’s already been a long period in August without any public appearances from Jinping.

In Jinping’s absence, his minister of commerce said: “Right now, changes in the world, in our times, and in history are unfolding in ways like never before, bringing human society to a critical juncture. The course of history will be shaped by the choices we make”. 

Rumors of potentially history-shaping events had preceded the summit. Before the forum, the central question was whether this summit would be the one where the five founding countries would expand their collaboration and invite new member states. 

Xi Jinping has been a central advocate for the alliance’s expansion, believing that a larger BRICS would promote a more balanced global order by countering the dominant position of the United States. Similarly, Russia sees value in showcasing international ties and influence. 

A tested alliance of democracies and autocracies 

Brazil and India, on the other hand, have been reserved about a potential expansion of BRICS. Their concerns stem from the possible dilution of their influence and the implications such a move might have on their foreign policies. 

India, especially, has had reasons to be skeptical. India and China, two of Asia’s largest powers, have longstanding territorial disputes in bordering regions. Their relationship is further strained by China’s Belt and Road Initiative, India’s growing ties with the United States, and the trade imbalance favoring China. An expansion, from an Indian perspective, favors China’s proactive foreign policies, including the Belt and Road initiative. 

On the other hand, China and Russia view a larger BRICS as a means to balance the influence of Western entities like the Group of 7 (G7) and institutions like the World Bank. They see the inclusion of other influential nations as a step towards challenging a Western-centric global order. 

This dynamic underscores the diverse nature of BRICS and explains why negotiations around including new member states have dragged on for years. Until something happened at this summit. 

Six new members 

Before the summit, 40 countries had expressed interest in joining BRICS – 22 of those had sent in a formal application. Thursday, it was announced that six will join: Argentina, Egypt, Iran, Ethiopia, Saudi Arabia, and the United Arab Emirates. Full membership for these countries will take effect as soon as January 1st, 2024. 

According to experts, it is unclear precisely what the new member states will gain by joining. “For the moment, at least, this move is more symbolic than anything – it’s an indication of wide-ranging global south support for a recalibration of the global order,” Margaret Myer, director of the Asia and Latin America program at the Inter-American Dialogue, says to The Guardian.

Argentina, Egypt, Iran, Ethiopia, Saudi Arabia, and the United Arab Emirates – why those countries? A question that can only partially be answered by the time of writing. 

Argentina has been vouched for by their neighbor, Brazil, due to their economic ties and shared interests in South America. The United Arab Emirates and Saudi Arabia, as major oil-producing nations, bring significant financial weight and strategic importance to the table. With the addition of The United Arab Emirates, Iran, and Saudi Arabia, BRICS account for 43 percent of the world’s oil production. 

Margaret Myer says: “With these new members – especially the major oil producing ones – on board, the BRICS configuration represents a much more significant share of the global economy and global population.” 

Most of all, the expansion is a victory for China and Russia, who have long been pushing to expand the alliance as a part of their individual agendas. For China, that is to create a Beijing-centric world order; for Russia, it’s a way to show that they still have friends and allies in a time of isolation. The addition of Iran, similar to Russia in its isolation from the West, is a victory for the authoritarian wing of BRICS. 

The democracies in BRICS, on the other hand, have had to swallow a bitter pill by inviting in no less than five authoritarian states. In South Africa, Brazil, and India, the populations might lose some faith in the potential of BRICS. 

Unanswered Questions Loom Over BRICS Expansion 

Several questions remain after the summit. Will the new member states propel the alliance that – besides their New Development Bank – has achieved little in terms of political results? 

The admission of the new member states is complicated by the rejection of 16 countries that sought to join the expansion. Currently, there is no public information on the admission criteria that BRICS operates with. Rejected countries include populous democracies such as Indonesia and Nigeria, raising eyebrows about the selection process. 

After the expansion, another key question stands: Will a larger alliance mean a faster (relative) global de-dollarisation? 

No Concrete Steps Toward a Common Currency 

For months before the summit, speculation was rife about a new BRICS currency, tentatively called a ‘Bric.’ Brazil’s President Lula Da Silva was the spark for these rumors, later confirmed by the chairman of the Russian Duma, asserting that the BRICS nations were “in the process of creating a new medium for payments.” 

The drive towards a common currency is driven by the desire to challenge what Xi Jinping terms as the American ‘hegemony’ globally. However, the summit did not share plans for this new shared currency.

Russia’s Putin, however, reinforced the desire to challenge the geofinancial status quo in a pre-recorded statement, saying, “The objective, irreversible process of de-dollarization of our economic ties is gaining momentum.” With a new currency still only a future possibility, the countries are likely to pursue a global ‘de-dollarization by trading in their respective currencies, a practice that’s already become a trend. 

A Divided BRICS in a Divided World 

Last week, American President Biden met with the leaders of South Korea and Japan. The timing of Biden’s Asia visit and his call for a new era of collaboration with South Korea and Japan is hardly coincidental. While the BRICS countries – led by Russia and China – expand, the US actively seeks to bolster its alliances in the Asia-Pacific region. 

The BRICS may be divided, but with an alliance ready to meet each other halfway, the division between the rest and the West is undeniably deeper.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.