News - BRICS is about to get a lot bigger

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BRICS is about to get a lot bigger – here are the new members

Source By Staff Writer - Business tech
1 year ago

Major emerging market nations invited top oil exporters Saudi Arabia, Iran, Egypt, Argentina, Ethiopia and the United Arab Emirates to join their bloc in a push to expand its global influence, effective 1 January 2024.

Leaders from Brazil, Russia, India, China and South Africa agreed to expand their BRICS group at a summit being held this week in Johannesburg, South African President Cyril Ramaphosa said. It will be the first expansion since 2010.

“We have consensus on the first phase of this expansion process, and other phases will follow,” Ramaphosa said.

The inclusion of Saudi Arabia, the world’s largest oil exporter, along with Iran, the UAE and Brazil, would mean the group brings together several of the largest energy producers with the developing world’s largest consumers, giving it outsized economic clout. With most of the world’s energy trade taking place in dollars, the expansion also enhances the bloc’s ability to push more trade to alternative currencies.

An expanded BRICS would also mean more say for the group in world affairs and may lead to a different type of global economy, according to Bloomberg Economics. That’s because, in comparison to the Group of Seven, the BRICS are less market-oriented.

“The enlargement of the BRICS is driven by the desire to build an alternative to an international system centred on US hegemony,” said Hasnain Malik, a strategist at Tellimer in Dubai.

“A distinction should be drawn between the use of the US dollar as a trading currency, which may erode as many seek an alternative, and as a reserve currency, which almost no other country or group of countries have the size, institutional credibility, and freely convertible characteristics, to rival.”

The push for expansion was largely driven by China but had the backing of Russia and South Africa. India was concerned a bigger BRICS would transform the group into a mouthpiece for China, while Brazil was worried about alienating the West.

“India will work with other BRICS aspirants to help join the grouping,” Prime Minister Narendra Modi said at the briefing in Johannesburg.

More than 20 nations from the Global South had formally requested to join ahead of the summit.