Why Saudi Arabia and Other Countries Are Striving To Join BRICS
Jim O’Neill stated in a 2021 article that “beyond creating the BRICS Bank, it is difficult to see what the group has done other than meet annually.”
The group of emerging countries—Brazil, Russia, India, China, and South Africa (BRICS) are meeting on the second day for the annual summit in Johannesburg, which started on August 22, 2023.
Amid expectations that the bloc could add more members, this year’s summit has gained popularity as China and Russia seek to extend their political influence over the US and its allies.
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HOW DID IT START?
Jim O’Neill, an economist with the US investment bank Goldman Sachs, first used the phrase BRIC to gather together four of the world’s biggest and fastest-growing economies in 2001. O’Neill emphasised how the four economies—Brazil, Russia, India, and China—could unite to become a major force in world trade in the coming decades.
The investors followed the lead, just as those nations’ policymakers did as well. The developing countries felt a need to unite despite their political and social differences in a move to reorganise the US-led global political, economic, and financial systems to be “fair, balanced, and representative.”
The BRIC leaders met for the first time in 2009 in Yekaterinburg, Russia. An “S” was added to the BRIC acronym and South Africa was asked to join the political club a year later.
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WHY IS IT IMPORTANT?
Over 42% of the world’s population is represented by the BRICS, which account for nearly a quarter of global gross domestic product (GDP) and 18% of trade.
Some see the group as an opponent to Western economic and political organisations and platforms like the G7 and the World Bank.
They think the bloc might influence crucial reforms at organisations like the World Bank and the International Monetary Fund to better reflect the realities of a more multipolar world.
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WHAT HAS BRICS ACHIEVED?
BRICS has struggled to live up to its expectations of offering an alternative to traditional financial aid and political systems.
The establishment of the New Development Bank, or BRICS Bank, a multilateral development bank with $50 billion (€45.6 billion) in subscribed capital to fund infrastructure and climate-related projects in developing countries, is one of its notable achievements.
The bank, whose shareholders also include Bangladesh, Egypt, and the United Arab Emirates, has so far issued loans amounting to more than $30 billion since its establishment in 2015. In contrast, just in 2022, the World Bank offered more than $100 billion.
Additionally, the BRICS have established a $100 billion contingency reserve arrangement, a tool for members to access foreign currency liquidity in times of financial constraints.
The bloc is reportedly pushing for the establishment of a single currency in an effort to mitigate the dominance of the dollar.
However, the BRICS currency might not be readily available as soon as expected. However, the bloc is now concentrating on the use of local currency in trade among member states.
Jim O’Neill stated in a 2021 article that “beyond creating the BRICS Bank, it is difficult to see what the group has done other than meet annually.”
The poor success of the organisation can be attributed to its members’ frequently conflicting and divergent interests, especially those of China and India, whose relations have recently deteriorated due to their shared disputed border.
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WHY ARE OTHER COUNTRIES INTERESTED IN JOINING THE BRICS?
Among the key topics of discussion at the summit, which is underway in Johannesburg, South Africa, is the bloc’s expansion.
It’s reported that over 23 nations have officially applied to become full-time BRICS members, including Saudi Arabia, Iran, the United Arab Emirates, Argentina, Indonesia, Egypt, and Ethiopia.
China has pushed for BRICS growth in order to strengthen its political position in the face of escalating US rivalry. At a time when it is under Western sanctions due to its involvement in the Ukrainian conflict, Russia is looking for new partners. Brazil and India have long opposed the bloc’s rapid development, and as a result, New Delhi is concerned about the club’s expanding Chinese influence.
While the BRICS has struggled to realise its economic potential, it is portraying itself as the representative of the Global South and positioning itself as a geopolitical alternative to a US-led international order. The desire of new members to benefit from the BRICS’s political and economic weight is palpable.
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