BRICS-Plus – Significance and Implications– Explained, Pointwise

The 15th BRICS summit held in Johannesburg has been concluded. The most significant outcome of this summit has been the expansion of BRICS, making it BRICS-Plus. 6 new countries have been added to the grouping, i.e., Argentina, Egypt, Ethiopia, Saudi Arabia, Iran and UAE. However, BRICS-plus has its share of advantages and disadvantages. BRICS-Plus also impacts India’s position in BRICS. India’s role becomes crucial in soft-balancing the BRICS-plus so that it does not become a Chinese talk shop.

What were other outcomes of the 15th BRICS Summit apart from BRICS-Plus?

1. Adoption ofJohannesburg II Declaration which reflects key BRICS messages on matters of global economic, financial and political importance.
2. The first ever in person engagement with leaders of BRICS with the members of BRICS Women’s Business Alliance which was an important step in women empowerment.
3. BRICS Finance Ministers or central bank Governors to consider the issue of local currencies, payment instruments and platforms and to report back to the BRICS leaders by the next summit.
4. Celebration of the 10^thAnniversary of BRICS Business Council and vision was laid down for increasing interstate trade between member countries.

How were the 6 countries selected for membership of BRICS-Plus?

BRICS-Plus has been strongly pushed by China backed up Russia. Chinese want inclusion of countries which are under their sphere of influence to be included. India has been cautious of Chinese designs of making BRICS plus a Chinese talk shop. India has allowed for expansion of BRICS but has insisted on finalization of membership criterion for expansion at the earliest.

Argentina was brought in to expand Latin American representation.

Egypt given its excellent ties with China and India was a natural choice. Ethiopia was the result of a compromise between the claims of Nigeria and Kenya.

Saudi Arabia and UAE inclusion will help in recapitalization of the New Development Bank enhancing its capacity to finance development projects. Iran’s entry reaffirms its strategic location as a bridge between West, Central and South Asia.

What are the advantages of BRIC-Plus?

Geo-political Advantages

BRICS-Plus has strengthened the global south representative credentials of BRICS. There has been an expansion in the geographical footprint of global south countries in BRICS.The grouping now has three members in Africa (South Africa, Egypt and Ethiopia), five in Asia (India,China,Saudi Arabia,Iran and UAE), two in South America (Brazil and Argentina) and one in Europe (Russia).

BRICS-Plus will increase the political clout of BRICS. The expansion of BRICS into BRICS-Plus will put pressure on the west to end its prolonged neglect of the global south.

BRICS-Plus presents a non-Western alternative development model. BRICS-Plus reinforces BRICS as an emerging, powerful and influential non-Western bloc and can counter groupings like G-7 which are dominated by the west.

Geo-economic advantages

BRICS-Plus can give fresh impetus to de-dollarization goal conceived by BRICS. BRICS-Plus countries can reduce the use of dollars in oil transactions. For example, Saudi Arabia can invoice its oil sales to China and India (accountingfor35% of Saudi’s total oil sales) in yuan and rupees.

BRICS-Plus represents close to 45% of the world’s oil production capacity.It has six of the top 10 oil-producing countries of the world-Saudi Arabia, Russia, China, UAE, Brazil, and Iran. This can create an alternative platform for engagement of oil exporting countries apart from OPEC+.

BRICS-Plus will strengthen the financial position of New Development Bank with inclusion of countries like Saudi Arabia and UAE. This will help in ensuring the finance of sustainable development projects in Global South and will be an alternative to Bretton Wood institutions like WB and IMF.

What are the concerns around BRICS-Plus?

Geo-political Concerns

BRICS-Plus seems to be moving away from its original geo-economic focus and inching towards an anti-West configuration.

BRICS-Plus has a changed geo-political complexion with only four democracies in the new group of 11 countries.Human rights, peace and development goals of BRICS might not be achieved.

BRICS-Plus might make BRICS less efficient. There will be difficulty in reaching consensus on contentious issues and declarations given the wide ranging economic and political differences between the member countries.

Newly admitted member countries like Saudi Arabia and Iran in BRICS-Plus have deep sense of suspicion and animosity despite Chinese efforts to ensure peace between them. This may hamper the pursuance of a common goal of BRICS.

Geo-Economic Concerns

BRICS-Plus expanded size will make it difficult to reach a consensus on common BRICS currency and BRICS payment platform.

Intra trade and investments between the countries of BRICS-Plus remain low. Significant investments need to be made.

Ukraine-Russia war and post-COVID economic recoveries puts a challenge for BRICS-Plus to create an alternative economic order.

What are the reasons behind the Chinese-Russian push for BRICS Plus?

China and Russia are looking to transform BRICS-Plus as a counter to US-led Multilateral system.

China and Russia hope to create new strategic and diplomatic space for themselves through BRICS-Plus as both face Western sanctions and pressure.

China and Russia want to project authoritarian regimes standing upto western democracies.

What should be India’s Role in BRICS-Plus?

India has allowed for expansion of BRICS but has insisted on finalization of membership criterion for expansion. India has asserted its heft in the recent meeting of BRICS.

India needs to smartly play the role of balancer in the forum to prevent BRICS from becoming a Chinese-talk shop.

India needs to develop consensus on common BRICS currency and BRICS payment system.

BRICS-Plus could lead to increased trade and investment between India and BRICS countries which would boost India’s economy.

What is the significance of BRICS which has resulted in demand for membership of BRICS-Plus?

Representative of Multipolar Global Order– BRICS promotes the creation of multipolar world order with political and economic parity.

Representative of new world order- BRICS represents the idea of New World Order decoupled from the hegemony of western powers.

Representative of the ‘Global South’– BRICS gave countries from the global south a platform to present their opinions on international issues and set an international agenda.

Alternative to Bretton Wood Institutions- World Bank, IMF which were a post WW II creation of the west represented the western economic agenda. BRICS represents the economic concerns, priorities and agenda of the developing and underdeveloped economies.

Forum to achieve economic Decoupling from the West- As BRICS represents 23% of Global GDP and 18% of world trade, it aims for de-dollarization of world trade through increased use of domestic currencies in economic transactions.

Enhanced cooperation for achievement of SDGs- BRICS as a forum serves to reduce poverty, alleviate hunger-malnutrition and achieve the sustainable development goals set up by the United Nations.

What are the challenges faced by existing BRICS that will be inherited by BRICS-Plus?

Expansion- China is pushing for inclusion of countries like Iran, Belarus which are under heavy debt trap influence of China. India views this push for expansion as attempt by China to make BRICS China centric platform.

Nature of Grouping- BRICS faces a challenge of either retaining its core nature as a group that is largely focused on financial and south-south challenge or becoming a bigger geopolitical coalition by admitting more nations.

Political Division- India-China dispute over territorial issues, disagreements between nations over UNSC reforms & drastically different political systems from active democracy in India to entrenched oligarchy in Russia to communism in China.

Economic Disparity- BRICS economies differ in their magnitude of economic size with countries like China and India leading in the economic ladder and countries like Brazil Russia languishing in the economic ladder.

Dominance of RIC- The marked dominance of big three Russia-China-India is a challenge for the BRICS as it moves ahead. To become a true representative of large emerging markets across the world, BRICS must become pan-continental.

Structural- Chinese economy has the largest share among the member countries and it accounts for 38 percent share in the total export of BRICS. This has resulted in dominance of China in the BRICS bloc and in turn has stoked the economic nationalism in other member countries.

Reform- BRICS has so far not succeeded in bringing reform in Bretton wood institutions like IMF and WB and has not been able to de-dollarize their economies.

Consensus- BRICS has faced consensus challenges on important international issues such as Russia-Ukraine war. While China is leaning towards Kremlin, India relied on its Non-Alignment Strategy and Brazil on only rhetoric.

What should be the way forward for BRICS-Plus?

BRICS-Plus should be based on rule-based order and the forum should not leave any room for ‘economic hegemony’ and ‘anti-West agenda’.

There must be a clear definition of principles and criteria for membership for further addition of countries to BRICS-Plus.

India must find creative ways of blunting Chinese strategy in BRICS-Plus to ensure equitable distribution of power in the group.