All set to reap BRICS dividends
With new members joining next month, group seen to amplify the voice of the Global South, benefiting Africa
The BRICS Summit held in South Africa this year will go down in history as a meeting at which a milestone was reached to shape the group’s direction.
During the summit in Johannesburg the BRICS group of emerging economies of Brazil, China, India, Russia and South Africa extended an invitation to Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates that are expected to officially join the group next month.
After the enlargement, experts say, the platform will increase the influence of the Global South, which has traditionally been neglected in terms of economic growth and policies.
Aly Khan, an investment banker in Kenya, said the recent developments in BRICS, such as greater cohesion, its expansion and growing local currency settlement, all point to a grouping that is flexing its muscle.
BRICS expansion is significant, foreshadowing a potentially new financial architecture and an ambition to reform global governance, he said.
Cavince Adhere, an expert on international relations with a focus on China-Africa relations, said BRICS expansion will make the bloc an important platform for international collaboration, especially among Global South countries.
The bloc, with a combined population of more than 3.2 billion, accounts for about 42 percent of the world’s population, a quarter of world GDP and 17 percent of world trade.
“That tells you how important it is,” Adhere said. “It’s now composed of the largest market in the world.”
The bloc also brings together resource-rich countries, he noted.
The future of BRICS will depend on its ability to deliver on the aspirations of the members that have already joined and those that are keen to join, he said.
“The 2023 summit held in South Africa was modeled on BRICS cooperation with African countries. And that simply tells of the strategic direction that the leaders of the BRICS countries are moving in — not leaving anybody behind.”
The emergence of BRICS is a reflection of the desires of Global South countries to come together and reimagine their development discourse, in addition to giving themselves a voice in global governance, he said.
BRICS is at a watershed in terms of global economic organizations, he said, with less-developed countries now having access to technology from more advanced ones, and having an opportunity to diversify their exports and gain access to new sources of funding.
“BRICS holds a very prime position for aspirations and development discourse, especially among poor countries.
“We are going to closely watch how it galvanizes, negotiates and delivers on the aspirations of the members that are joining in terms of development.”
Member countries should discuss strengthening intergroup collaboration in a number of fields, including cultural exchanges, science and technology, he said.
XN Iraki, an associate professor in the Faculty of Business and Management
Sciences of the University of Nairobi, said BRICS gives the Global South an opportunity to articulate its issues, set its priorities, join likeminded countries, gain a chance to engage in the transfer of technology, and gain a new identity.
BRICS should provide a forum where the Global South can discuss its interests, and economic and political dreams, as well as serve as a venue where those of the Global South can be heard and treated as equals, Iraki said.
“BRICS should be a place where countries see economic prospects, economic growth, more trade and higher standards of living for their citizens.”
Expansion will give the grouping more recognition because there must be something good that attracted the new members, he said.
“Let’s sell BRICS by showing those who have joined as well as the new members the benefits they are going to get. Once that is publicized, then BRICS will grow faster.”
Augustin Fosu, a professor in the Institute of Statistical, Social and Economic Research of the University of Ghana, said the total population of the 11 countries will be more than half the world’s population and will account for a quarter of the world’s GDP, a fact that makes the new grouping a formidable global force.
A BRICS currency could also challenge
the euro and the dollar in global trade, Fosu said, even though he does not believe that the greenback’s days are numbered.
“This is because the grouping is quite heterogeneous in terms of economic interests. Thus, managing such a currency would be most challenging. Indeed, the euro has so far failed to significantly mitigate the importance of the dollar.”
Iraki said many countries are supporting “de-dollarization”.
“There is a consensus across the globe for an alternative to dollar, whether through BRICS or any other forum. Having an alternative to the dollar will give countries choices on what reserve currency they want to use.”
Adhere said BRICS countries should focus on settling trade using its members’ own currencies.
Countries not aligned with the interests of the United States have been cut off from accessing the dollar, making international trade maneuvers very difficult, he said.
“If BRICS countries can promote their own currencies it would shorten the time that is taken to do international trade. It would also eliminate increased finances onto the debt because of the dollar inflation.”
BRICS provides an opportunity for countries that have been underrepresented or punished or targeted by certain Western countries by way of things such as sanctions, he said.
Some countries are collaborating within BRICS to offer financial services without involving the dollar, he noted.
“The Egyptian government is considering a yuan dominated bond, so there is a possibility that once the dollar is out of the equation, sanction issues are diminished, and therefore it will not be used as a punishment tool, as has been the case.”
With two more African countries joining BRICS from Jan 1, the continent has the opportunity to use the grouping to make the most in working toward development goals.
Fosu of the University of Ghana said Egypt and South Africa are two of the largest African economies in terms of GDP, the latter being a major trading partner in Africa, particularly in the Southern African Development Community, in which it accounts for about half the trade.
“The BRICS membership will be consequential for other African countries, especially in the light of the African Continental Free Trade Area, of which both Egypt and South Africa are members.”
The three African countries nearly span the continent, north, south and east, which could be geopolitically strategic, Fosu said.
Iraki said that through BRICS African countries will be able to use their economic voices and will also be in a stronger bargaining position.
“We hope BRICS will serve as an umbrella to protect African countries from those who don’t have good intentions on the continent. There has been a lot of imbalance in the world trade and business environment, so through BRICS I expect African countries to get economic and trade justice.”
He urged the African Union to consider partnering with BRICS to make the African market more vibrant.
Adhere said that BRICS brings countries together and gives them an opportunity to reimagine their political destiny and bolster their political collaboration.
The group is enabling countries to widen their scope of collaborative opportunities, thereby becoming a geopolitical phenomenon that everyone will be watching, he said.
There have been fears that following the expansion, division and competing interests in BRICS could make it hard to reach consensus on key issues.
Khan, the investment banker in Kenya, said he does not see such lack of cohesion as an issue, and that instead over time there will be greater alignment. The unity of the grouping will depend on its flexibility, openness and creating its own internal organic cohesion, he said.
“One ... attractiveness of the grouping is having diversification of opinion, but overall you know the ship is sailing to a particular place. But on the way it could take different types of diversions.
“Who would have thought, for example, that Saudi Arabia and Iran could find alignment? But look at what is happening since the Chinesebrokered peace deal (between the two sides in March). We have had this alignment take shape and form. It’s truly remarkable.”
Adhere said that despite possible problems that pit individual member states against one another, countries speak in a consensus fashion when it comes to BRICS’ decision-making.
“We hope as more countries join, the primary drive to deliver development for people will override the seemingly small tensions that may appear between countries.”