What’s Happening?
BRICS will be holding the 15th annual summit in August. The list of invitees seems to have expanded past the five original members as South African president Cyril Ramaphosa has invited leaders of 70 other countries to the summit and 53 are other African countries, but the U.S. did not receive an invitation. It is also expected that business leaders will be in attendance to understand BRICS’ goals and the New Development Bank. One of the summit’s goals is to talk about the alliance’s expansion and who would be allowed to join. They will be discussing how quickly they should expand and who the first potential countries to join will be. Argentina, Iran, and the United Arab Emirates are the top three countries that are most likely to join as a result of the summit.
Why?
| Driving Forces | Weight (0-5) | Trend | Weight (0-5) | Restraining Forces |
| De-dollarization – Countries have been relying less on the U.S. dollar to decrease the U.S. economic dominance | 4 | 40+ Countries are showing interest in joining the BRICS Alliance | 5 | Not all countries in BRICS want to expand as it could lead to decreased political power |
| BRICS New Development Bank | 5 | 2 | Need to be cautious of what regions are represented | |
| Alternative to the Western-dominated world | 3 | 3 | The G7 and BRICS will have been formed for the same reason, so the G7 will be against another alliance forming among countries for economic gain | |
| Countries that are not as developed want to join to help the the development of their countries | 3 | 2 | The New Development Bank will focus on helping developing countries as opposed to the G7 that focuses on the macroeconomy | |
| Get in the good grace of BRICS countries, which will provide access to large markets. | 4 |
Note: The numbers above are meant to be comparative and are not calculated using an exact science. (0 – this force is unlikely to drive/restrain the trend. 5 – this force is highly likely to drive/restrain the trend.)
What’s Next?
Because there are 19 countries expressing interest in joining BRICS, it will likely take years to decide which countries can join and how to get them inducted into the alliance. The length of joining is due to political reasons because countries who want to join have to have unanimous backing from all current members to receive an invitation. If one current member country does not want a specific country to join, then it would take longer to begin the process of adding that new country as a member. BRICS will be careful in selecting which countries to join the alliance due to the driving and restraining forces outlined above. If BRICS remains as stable as NATO and the G7 after more countries have been added, then the interest in joining the alliance will continue for many years. NATO added its 31st ally on April 4th, 2023 with the addition of Finland. Now NATO is a military and defense alliance, but the idea is still applicable to BRICS that if the alliance can remain stable, then countries will want to join for years to come. With the G7, Russia was added to the alliance but was removed in 2014 after it attempted to overtake Crimea. There have not been any other expansions in terms of members, but the European Union is considered an “honorary member” because it has all the privileges and obligations of a member minus the opportunity to host a summit. Perhaps BRICS will consider having “honorary members” that would have different rights than the E.U. in the G7, but it might be easier to approve among the current member countries. Countries want to join right now because the bloc is one of the leading groups moving toward dedollarization. The alliance is also implementing its own New Development Bank (NDB) that will supposedly be backed by gold, which is appealing to countries. The NDB also wants to help developing countries by financing for infrastructure and sustainable development projects. Support from other countries will continue to increase the power that they hold on a global scale. If Argentina joins the bloc, this will be the second country from South America after Brazil to do so, which will provide that region with more influential global power. According to data from 2021, Brazil and Argentina have the first and second-highest GDPs of South American Countries. These two countries need to continue using the dollar because of how much they impact the South American economy.
One negative to expanding the alliance would be that eventually there would likely be more internal disagreements that would limit the bloc from being the most powerful group in the world. There are currently disagreements on the expansion of BRICS and how the alliance should go about that. China already attempted to add more members in 2017 by introducing the “BRICS Plus” idea. This would have turned the bloc into more of a China-led alliance, which is why it was not accepted originally. Russia is also interested in expanding the countries in the bloc ever since its invasion of Ukraine because it wants to create a bloc that is completely isolated from the Western world. Brazil and India, on the other hand, do not want to expand as they are worried that they will not have as much power in the group if there are more members. In the past, BRICS has typically agreed on most political topics, but adding more members is likely to lead to more disagreements and a less unified group. Additionally, we could see less voting power by the original member countries of BRICS if they choose to expand.
While it is a popular trend currently, it is unlikely that BRICS will expand by more than five countries in the next five years. The alliance is aware of how adding each country will affect its political and economic power on a global scale. Business leaders should continue to monitor the situation with the expansion of BRICS because it could eventually lead to a new currency that could make trading with the countries within the alliance difficult. If the new currency is required to trade with the countries, then that could lead to exclusivity in terms of international trading. Because business owners are being invited to the summit, it is important for CEOs of other companies to watch what stems from the summit. If BRICS does decide to pursue a new currency, then it will be crucial for businesses to understand how that would affect their trade. China is a main source of resources for many companies, so if China wants to trade in this new currency, other businesses will need to adapt to that.
Sources:
- https://watcher.guru/news/3-major-countries-to-join-brics-alliance-in-august
- https://www.news24.com/citypress/politics/sa-invites-70-heads-of-states-to-the-brics-summit-but-western-leaders-excluded-20230721
- https://foreignpolicy.com/2023/06/22/brics-summit-brazil-russia-india-china-south-africa-putin-nonalignment-global-south/
- https://worldview.stratfor.com/article/brics-more-members-would-mean-more-power-and-more-problems
- https://watcher.guru/news/argentina-takes-step-toward-joining-brics-and-ndb
- https://watcher.guru/news/41-countries-ready-to-accept-brics-currency-before-summit
- https://www.voanews.com/a/more-countries-want-to-join-brics-says-south-africa-/7190526.html
- https://www.bloomberg.com/news/articles/2023-07-20/brics-expansion-plan-draws-interest-from-more-than-40-nations
- https://www.silkroadbriefing.com/news/2023/05/31/expansion-of-the-brics-new-development-bank/#:~:text=%E2%80%9CThe%20task%20of%20the%20BRICS,support%20our%20joint%20development%20agenda.%E2%80%9D
- https://www.ndb.int/about-ndb/#:~:text=NDB%20strives%20to%20act%20as,our%20founding%20members%20and%20EMDCs.&text=We%20play%20an%20active%20role,infrastructure%20and%20sustainable%20development%20projects.
- https://www.statista.com/statistics/802640/gross-domestic-product-gdp-latin-america-caribbean-country/
- https://www.reuters.com/world/brazil-now-main-holdout-against-brics-expansion-sources-say-2023-08-02/#:~:text=BRASILIA%2C%20Aug%202%20(Reuters),Brazilian%20government%20officials%20told%20Reuters.
- https://www.dw.com/en/a-new-world-order-brics-nations-offer-alternative-to-west/a-65124269
- https://www.silkroadbriefing.com/news/2023/03/27/the-brics-has-overtaken-the-g7-in-global-gdp/
- https://www.ndb.int/about-ndb/general-strategy/
- https://www.wilsoncenter.org/blog-post/brics-rivalry
