Managing Waves of Change: The Recent BRICS Expansion

February 07, 2024

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The original BRICS (Brazil, Russia, India, China, and South Africa) group has classically been perceived by analysts as a leading organization with the potential to diversify the global financial system and challenge the dominance of Western institutions like the World Bank and the International Monetary Fund (IMF).¹  In this aim, the original BRICS has achieved some milestones, including the establishment of the New Development Bank (NDB), which has financed development projects in its member states, including potable water in India, hydropower plants in Russia, and solar-powered lighting in Brazil. Nevertheless, the group's existence and ability to influence have not been without challenges, both internally due to differences amongst members, and externally due to the geopolitical and economic influence of other relevant actors, such as the G7.²

In this context, the recent BRICS expansion, which commenced in January 2024, may have a significant impact on the group's geopolitical role, especially as a platform that gives voice to the Global South.³  To analyze this development, it is important to consider the motives behind this expansion amongst the BRICS members. For China, this expansion accomplishes what the nation has been pursuing for a significant period - the creation of a bloc acting as a counterweight to Western influence by aligning developing countries which have grown skeptical of the leadership exerted by G7 industrialized nations.⁴  On the other hand, Russia may view this expansion as an opportunity to overcome its current isolation resulting from the conflict with Ukraine, gaining new spheres of influence and more weight in decision-making. Nevertheless, differences amongst members could be pivotal in shaping the organization's future after the expansion. One intriguing case is that of India, for which the roles of BRICS Plus and G7 are not necessarily contradictory, at least in terms of interest. Despite playing a key role among BRICS Plus nations, India has considered that though the West may be experiencing a relative decline, it remains an important source of technology and capital, a resource India seeks to access. Therefore, India has remained open to other partnerships with the US, Japan, and Western Europe to support its own development agenda.

In addition to the internal motivations behind BRICS' recent expansion, it is also important to consider the new members. The possibility of integrating a wider range of perspectives and experiences coming from these developing nations serves a shared motivation to diversify and expand each nation's global influences.⁵  Furthermore, the expansion may provide economic benefits through new collaborations with nations possessing substantial oil wealth or financial prowess. It could also create synergies with the infrastructure investments and technological sectors of China and India, respectively.

Saudi Arabia is a clear example of the benefits that Middle Eastern countries can reap from their involvement in BRICS Plus. Economically, the country seeks diversification to reduce dependence on oil. Saudi Arabia provides opportunities for improvement on infrastructures such as high-speed railroads, renewable energy projects, development of technological hubs, and collaboration to further expand its tourism promotion, all contributing to Saudi Arabia's Vision 2030 plan. Geopolitically, BRICS Plus allows Saudi Arabia to counterbalance Western influence and exercise greater regional leadership through cooperation with other countries and economies in the region.

 

The United Arab Emirates (UAE) could benefit from BRICS Plus by accumulating support for its economic expansion, enabling collaboration with other countries in the Middle East in renewable energy generation, as well as the development of infrastructure and technology. Engaging with both BRICS Plus and Western nations provides diplomatic space for conflict negotiation and stability, along with a platform to diversify influence and markets to balance international connections.

 

For Iran, BRICS Plus membership could represent significant support for its economy through access to financial systems and investment opportunities, mitigating the impact of Western sanctions. BRICS Plus also provides an avenue to diversify trade and eventually acquire relevant technological transfers. Additionally, joining BRICS Plus may contribute to greater local stability through the revitalization of current infrastructure projects. Furthermore, BRICS Plus can provide a platform for dialogue with the West regarding nuclear programs.

 

Egypt could establish a platform to continue preserving its regional relevance by serving as a counterbalance to Western influence. Additionally, there is the potential for diversifying the Egyptian economy beyond tourism through industrial collaboration with other BRICS Plus members. This includes support for improved infrastructure and renewable energy projects, as well as an exchange of best practices with other countries in the region regarding expansion of the tourism market.

 

Ethiopia, on the other hand, requires significant support for its infrastructure development, for which BRICS Plus membership could be quite useful. Cooperation on hydroelectric projects, modernization of transportation and logistics systems for internal trade, and access to cutting-edge agricultural technology for improved production are essential for the country. BRICS Plus membership could also be crucial for elevating Ethiopia's role in East Africa, enabling collaboration with other members to enhance stability in the region and eventually expand its influence to other areas of Africa.

 

The evolution of BRICS Plus in 2024 may lead to a shift in the global order. The inclusion of Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE makes the bloc now represent 45% of the total world population, and over a third of the global GDP (PPP). ⁶ The addition of four Middle Eastern states, boasting a combined oil production of around 21 million barrels per day,⁷  suggests a potential eastward shift in BRICS Plus' economic focus.⁸ This could lay the groundwork for an alternative energy bloc, challenging the established Western-dominated oil trade. Recent diplomatic initiatives, such as China's mediation between Saudi Arabia and Iran, and India's adoption of Rupee-Dirham trade with the UAE, offer evidence of the future potential of this shift. The implications include the emergence of an alternative energy bloc capable of reshaping global trade patterns, establishing alternative currency corridors, and challenging the US dollar's hegemony in energy transactions. Nonetheless, as seen when analyzing the motivations of each country, establishing such a bloc will require substantial infrastructure investments, coordinated policy frameworks amongst multiple countries, and, perhaps most importantly, a willingness to overcome geopolitical differences within member states in favor of a cooperative future.⁹

In light of existing internal complexities, potential economic reorientation, the shifting role of BRICS Plus, and questions about the viability of an expansion system in the long term, analysts have been pondering what could come next. Questions arise as to whether the expansion will indeed yield more advantages for the group or introduce complexities and problems. Amid the potential advantages of the expansion, a challenge for BRICS Plus and its subsequent expansion framework lies in the changes to its internal composition. While current member states undoubtedly share common interests, there are also key differences in specific areas - historical relationships, and even economic models. Navigating these differences is crucial to avoiding potential conflicts. Effective leadership and a commitment to bridging historical or ideological differences will be of paramount importance to prevent fragmentation and ensure cohesion. Otherwise, a lack of consensus could be detrimental to the group's influence in promoting a multipolar world and affect its internal functioning. In this context, the case of Argentina serves as a cautionary tale, illustrating how national political shifts could impact the group in the future.

When Argentina had its initial push to be included among the BRICS Plus, fostered by former President Alberto Fernandez, the nation sought significant financial support through collaborations with Brazil and China, amid its economic problems.¹⁰ The previous administration aimed to secure loans to restructure local debt, reduce dependence on Western lenders, and diversify trade to other markets interested in Argentine agricultural and manufactured products. Moreover, Argentina's potential role in the group alongside Brazil was previously forecast as a key representative of South America, promoting more explicit South-South cooperation, and enhancing the continent's global image and diplomatic relations. However, once Javier Milei came to power, things changed significantly. Its current Foreign Minister Diana Mondino stated that the country would not be part of the BRICS expansion, citing a lack of perceived advantages.¹¹ Moreover, the presence of Iran, which has been viewed by some Argentines as an actor in the attacks on the Argentine Israelite Mutual Association in 1994 and the Embassy of Israel in Argentina in 1992, may have influenced the country's position. Milei's statements to align with the United States and Israel represent the beliefs of some groups that, despite potential economic benefits, a BRICS Plus membership does not align adequately with the direction of the new Argentinian administration. Thus, the government officially renounced its intention to join the BRICS expansion at the end of 2023.¹² On the opposing side, there are groups that prioritize pragmatic choices over ideological decisions, arguing that BRICS Plus membership should not be rejected solely on political grounds. In any case, internal shifts in countries must be considered by BRICS Plus in the future, not only concerning new members, but also regarding its own internal organization and alignment. Building stronger relationships based on commonalities, despite differences, should be a priority.

The new members find themselves at a critical moment, possessing remarkable potential but also facing challenges. On the one hand, BRICS Plus could be pivotal in advocating for the Global South, reshaping trade patterns, promoting alternative energy models for climate change, and supporting food security. Nevertheless, internal differences among members, external skepticism from developed countries, and potential withdrawals due to political shifts, such as the case of Argentina, may pose significant threats. Thus, it is evident that BRICS Plus' success will rely on the group's ability to overcome internal complexities, develop a stable governance framework, foster trust, build cooperation among its members despite differences, and strategically leverage its political, economic, and diplomatic influence on external actors. If BRICS Plus successfully manages these challenges, the bloc could play a key role in creating a more balanced and inclusive global order.¹³ Therefore, the world watches with interest how this expansion will navigate the dynamic, and sometimes dangerous, waters of global geopolitics and economics, wondering to what degree this new group will succeed in leaving a lasting impact on the international stage.

 

 

1. Oliver Stuenkel, The BRICS and the Future of Global Order (Lanham, Maryland: Lexington books, 2020).

2. Raul Gouvea and Margarida Gutierrez, "'BRICS Plus': A New Global Economic Paradigm in the Making?,'' Modern Economy 14, no. 5 (May 2023): 539-550.

3. "BRICS Group Invites 6 New Members to Join Next Year," DW, August 24, 2023, https://www.dw.com/en/brics-group-invites-6-new-members-to-join-next-year/a-66618967.

4. Edith Mutethya, "BRICS Expansion to Bolster Global South Influence," China Daily, December 18, 2023, http://epaper.chinadaily.com.cn/a/202312/18/WS657f833ca31036711cce4d01.html.

5. Mark Katz, "The BRICS Come to the Middle East and North Africa," Atlantic Council, August 25, 2023, https://www.atlanticcouncil.org/blogs/menasource/the-brics-come-to-the-middle-east-and-north-africa/; Alexandre Kateb and Abdullah Baabood, "How Might Middle Eastern and North African Countries Affect the BRICS Group?," (webinar, Carnegie Middle East Center, September 28, 2023), https://carnegieendowment.org/2023/09/28/how-might-middle-eastern-and-north-african-countries-affect-brics-group-event-8162.

6. Gregory Zerzan, "Ignoring BRICS Expansion Threatens America's Economic Security," Newsweek, January 12, 2024, https://www.newsweek.com/ignoring-brics-expansion-threatens-americas-economic-security-opinion-1859634.

7. "Petroleum and Other Liquids," US Energy Information Administration, accessed January 26, 2024, https://www.eia.gov/international/data/world/petroleum-and-other-liquids/annual-petroleum-and-other-liquids-production.

8. Urooba Jamal, "Analysis: What Do BRICS Invitations Mean for the Middle East?," Al Jazeera, August 25, 2023, https://www.aljazeera.com/news/2023/8/25/analysis-what-do-brics-invitations-mean-for-the-middle-east.

9. Stuenkel, The BRICS.

10. Jaime Rosemberg, "El Vertiginoso Giro Del Gobierno En Política Exterior [The Government's Rapid Shift in Foreign Policy]," LA NACION, December 18, 2023, https://www.lanacion.com.ar/politica/el-vertiginoso-giro-del-gobierno-en-politica-exterior-nid18122023/.

11. Origlia, "Comercio y Política."

12. Cecilia Devanna, "El Gobierno de Javier Milei Oficializó Que La Argentina No Entrará a Los Brics [The Government of Javier Milei Officially Announces that Argentina Will Not Join the BRICS]," LA NACION, December 29, 2023, https://www.lanacion.com.ar/politica/el-gobierno-de-javier-milei-oficializo-que-la-argentina-no-entrara-a-los-brics-nid29122023/.

13. Stuenkel, The BRICS.

 

 

 

Please note: The above contents only represent the views of the author, and do not necessarily represent the views or positions of Taihe Institute.

 

This article is from the January issue of TI Observer (TIO), which examines the dynamics of the BRICS expansion in a global context. If you are interested in knowing more about the December issue, please click here:

http://www.taiheinstitute.org/Content/2024/01-31/1604465221.html

 

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