August 22, 2023
5 mins read

Stage set for crucial BRICS summit

Modi will join the leaders of Brazil, China, Russia and South Africa in Johannesburg for the first in-person summit after 2019…reports Asian Lite News

The world’s leading emerging market powers have complained for years about being sidelined by wealthy nations. Now they are mounting their most ambitious challenge yet to the status quo.

The BRICS bloc — Brazil, Russia, India, China and South Africa — will use an annual leaders’ summit in Johannesburg this week to begin the process of enlisting more members to bolster its global heft, a push driven mainly by Chinese President Xi Jinping but also backed by Russia and South Africa. There will also be talks on how to accelerate a shift away from the dollar, in part by increasing the use of local currencies in trade between members, which is surging, according to a draft agenda seen by Bloomberg.

The bloc has failed to convert its growing economic might into significant political clout since it began holding summits 15 years ago. But the current splintering of the world order amid rising US-China frictions and the splits over Russia’s invasion of Ukraine provides a fresh opening for it to become a louder voice of the Global South and potentially to challenge the US and its allies.

“We want to make the BRICS very strong politically, very strong financially,” said Brazilian President Luiz Inacio Lula da Silva.

The summit could see the bloc’s first expansion since South Africa was added in 2010. High on the list of potential candidates are Indonesia and Saudi Arabia, as well as the United Arab Emirates, Algeria and Egypt. But India wants the process to be gradual.

An expanded group would represent about half of global output by 2040, Bloomberg Economics estimates show, double the share of the Group of Seven, a reversal from the turn of this century. A bigger BRICS would account for almost half of the global population, up from 42% currently, according to Anil Sooklal, South Africa’s ambassador to the bloc.

“These countries have risen economically, they have voiced their concerns, they’re now capable of offering alternatives if their voices are not heard,” said Karin Vazquez, a Shanghai-based associate professor of diplomatic practice at India’s O.P. Jindal Global University.

To date, deep divisions among members have limited the consensus-driven bloc’s ability to increase its sway at institutions such as the International Monetary Fund, the World Bank or the United Nations Security Council. A BRICS development bank has lent only $32.8 billion in eight years in operation, a tiny fraction of the amount the IMF and World Bank have disbursed over the period. Suggestions that the bloc introduce a common currency haven’t gone anywhere.

A market capitalization-weighted measure of the five BRICS nations’ stocks has risen 81% since 2009, compared with a 379% rally in the S&P 500 Index. Factor in the weakness of their currencies during this time and their dollar returns look much worse.

Russian President Vladimir Putin is staying away from this year’s summit because he faces a war-crimes arrest warrant from the International Criminal Court, of which host South Africa is a member. He will participate remotely.

The gathering will give him another opportunity to present his narrative of the Ukraine invasion directly to leaders from the Global South, many of whom have been sympathetic to his accounts in the past. Brazil, Russia, India, China and South Africa have been cautious about openly taking Russia’s side in the war, but have also been unwilling to ally with the West in opposing it.

While the European Union sees the BRICS as primarily a talk shop – which could be weakened rather than strengthened by expansion – Putin’s ability to use the group as an international platform is a worry, said an EU official who spoke on condition of anonymity because he isn’t authorized to comment publicly.

The bloc has been a “big disappointment,” said Jim O’Neill, the former Goldman Sachs Group Inc. chief economist who coined the acronym BRIC in 2001 to highlight their rising global heft. “China and India rarely agree on anything, which is a fundamental problem.”

The world’s two most-populous nations have been locked in a border dispute for years. Their army commanders last week agreed to work swiftly toward easing their differences, opening the door for progress in negotiations between Xi and Indian Prime Minister Narendra Modi.

India is wary that expanding BRICS will transform the group into a mouthpiece for China, while Brazil is also worried about alienating the West, according to officials familiar with the bloc’s internal negotiations. But they are resigned to admitting new members, even as they push for an agreement on the rules and criteria.

“Since BRICS was founded, China’s become not only more aggressive regionally, or even along the border with India, but also it, too, wants to be the standard bearer for the Global South,” said Katherine Hadda, a former senior US diplomat who now heads US-India policy studies at the Center for Strategic and International Studies in Washington. “India doesn’t want that.”

“The appeal of BRICS is that it is led by states of the South and is thus seen as a symbolic way of rejecting Western leadership,” said Robert Schrire, a politics professor at the University of Cape Town. “It is this symbolism, rather than any expectation of economic gains, that drives the desire of those who wish to join the bloc.”

ALSO READ-PM Modi departs for South Africa to join BRICS Summit

Previous Story

Maintaining bone health: Recognizing signs of weak bones

Next Story

UK to to spend up to £25 mn on ASEAN economic integration

Latest from -Top News

India-US Trade Deal Likely This Week

The interim trade deal would be an initial step towards a comprehensive bilateral free trade agreement between Indian and the US….reports Asian Lite News India is expected to finalise an interim trade

One Year Later, Hasina’s Son Raises Red Flag

Hasina’s abrupt exit last August after violent student protests was widely seen as a blow to democracy in the Muslim-majority nation of 170 million….reports Asian Lite News Sajeeb Wazed, son of former

Global South Finds Its Campus in India

The question is no longer if India can attract global talent, but whether it can build the conditions to do so at scale—with care and vision. Done right, India could emerge as

Jaishankar Gets Real on India-US Ties

The EAM underlined the structural drivers of the bilateral relationship, saying, “The trend line over the last 25 years has actually been very strong….reports Asian Lite News External Affairs Minister S. Jaishankar

Polls Early Next Year, Yunus Tells US

The Chief Advisor invited Rubio to visit Bangladesh ahead of the general election to witness the country’s transition to democracy firsthand…reports Asian Lite News Bangladesh’s interim Chief Advisor Muhammad Yunus has urged
Go toTop

Don't Miss

UAE-BRICS ties set to foster global development

Al Khoori explained that the UAE aims to boost economic

PM Modi Hails Expansion of BRICS

The 16TH summit is the first since the expansion of