BRICS is bigger now. Is it better too?

Source– The post is based on the article “BRICS is bigger now. Is it better too?” published in “The Indian Express” on 1st September 2023.

Syllabus: GS2- Regional and global groupings

Relevance: BRICS

News– Leaders of Brazil, Russia, India, China and South Africa took a call last week to expand the BRICS grouping from five countries to 11.

What are some facts about the origin of BRICS grouping?

BRICS is a grouping of five of the largest emerging nations worldwide. It represents approximately 41 percent of the global population, around 24 percent of the global GDP, and roughly 16 percent of global trade.

The term BRIC was initially coined in 2001 by Goldman Sachs in their research paper titled ‘The World Needs Better Economic BRICs.’

The paper predicted that the four economies of Brazil, Russia, India, and China would become some of the world’s largest economies over the next five decades.

Formally, the BRIC grouping began to take shape after leaders from Russia, India, and China met in St. Petersburg during the 2006 G8 Outreach Summit.

The formal establishment of the group occurred during the first meeting of BRIC Foreign Ministers on the sidelines of the United Nations General Assembly in New York in 2006.

How BRICS is expanding itself?

The Johannesburg declaration stated that the BRICS nations had agreed on the fundamental principles, norms, conditions, and steps for the expansion process.

Their efforts were driven by the goal of including Strategic Partners as new additions.

India holds strategic partnerships with four of the six new potential members, namely Saudi Arabia, the UAE, Iran, and Egypt.

With its expansion to 11 members, BRICS has now surpassed the size of both ASEAN and the Shanghai Cooperation Organization.

Some have portrayed the expanded group as an alternative to Western alliances like the G7. But, India does not see it as an “anti-Western” coalition.

In fact, France, a G7 member, has reportedly shown interest in more active engagement with BRICS.

The new member countries are emerging economies with significant growth potential. Many of them belong to the Global South or are developing nations.  They seek to diversify their options in the increasingly polarised geopolitical landscape.

Which are the new members from Latin America and Africa?

In Latin America, Argentina was chosen as a new member. Argentina has a GD) of approximately US$610 billion.

From Africa, Ethiopia and Egypt secured membership, despite competition from Nigeria, Algeria, and Senegal.

According to the World Bank, Ethiopia is the second most populous nation in Africa after Nigeria and one of the fastest-growing economies in the region, with an estimated growth rate of 6.4% in FY 2021/22.

Egypt, strategically located with 12 percent of global trade passing through the Suez Canal, plays a crucial role in the region. It is a significant economic powerhouse, considered an emerging economy with reforms.

Both Argentina and Egypt, however, have strong economic ties with China. Recently, Beijing assisted Argentina in avoiding a default with the International Monetary Fund for the second time.

China’s bilateral trade with Egypt currently stands at $15 billion, which is double that of India’s $7.26 billion in 2021-22. President Sisi has actively pursued Chinese investments and has made multiple trips to China over the past eight years.

Ethiopia is seen as carefully balancing its relationships with both the United States and China.

Which are the new members from Asia?

Out of the three Asian nations, Saudi Arabia and the UAE are strong allies of the United States.

Iran, which has had a complex relationship with the US, has been courted by China in recent years.

The inclusion of Saudi Arabia and the UAE is anticipated to result in increased financial support for the New Development Bank.

By incorporating these four nations, BRICS has also addressed the issue of having no Muslim-majority country within the grouping.

Saudi Arabia, the UAE, Iran, Egypt, and Ethiopia all share a common regional space. This could bring prominence to the West Asian and North African region. The rivalries and geopolitical tensions in this area might influence the dynamics of the grouping.

These internal contradictions among the member countries could potentially limit the potential of BRICS.

What is the perception about China and Russia with regard to their relationship with the grouping?

China is perceived as attempting to establish its own alliance in opposition to Western powers.

India has consistently emphasised the importance of decision-making “through consensus,” which is the fundamental principle of the group.

This incorporation of six new members is regarded as the initial phase of expansion, leaving room for a potential second phase.

Russia  is scheduled to host the upcoming BRICS summit in Kazan in 2024.

With an expanded group of 11 members attending, this event will serve Moscow’s interests, as Russia has been facing diplomatic isolation. It will seize the opportunity to underscore Russia’s significance despite Western pressures.

For India, the primary concern remains the challenge posed by China. Delhi faces the challenging task of safeguarding the group from being unduly influenced by Beijing.