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Saturday, July 13, 2024

Why are so many countries lining up to join BRICS?

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By Dou Hongyu

Ahead of the BRICS 2023 summit in August, more than 20 countries applied to join the bloc which is now formed by Brazil, Russia, India, China and South Africa, and over 20 others reportedly expressed their willingness to be part of it. BRICS expansion is no longer a matter of “if,” but a matter of “when.” The BRICS heat is a reflection of the world trend– emerging economies are looking for an alternative to current global institutions and organizations that largely represent Western interests. They want a platform that gives them a greater say and truly brings them benefits.

Developing countries have long held the perception that the International Monetary Fund and the World Bank have not adequately represented their interests or provided them with a meaningful voice. Even the current BRICS group, which has 40% of the world’s population and makes up the world’s largest economic bloc by purchasing power parity (PPP), only has less than 15% of the voting power in the IMF and the World Bank.

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Meantime, many of the countries that want to join BRICS, including Iran, the United Arab Emirates and Saudi Arabia, have always been economically restrained by the West, e.g., the US. If Washington’s directives are not followed, there will be consequences in the form of sanctions and economic and financial coercion. In contrast, the primary focus of BRICS is to support countries in promoting their investment and trade endeavors without imposing any prerequisites.

Starting from 2009, the BRICS countries have been convening yearly, establishing a new development bank to invest in their respective nations and coordinating on various policies. Furthermore, BRICS nations are discussing the possibility of introducing a common currency among its members. Such a move could pose a significant challenge to the currently dominant currency for global trade, US Dollar, and a major reason why everyone has to play nice with the US.

BRICS better suits economic needs of developing countries

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BRICS countries and those applying to join have their diverse strengths and are highly complementary to one another. Russia is an energy powerhouse, so is Iran, the foreign minister of which said they hope to “obtain the opportunity of accelerated membership in BRICS.” South Africa is one of the richest African nations and can help explore investment and cooperation opportunities on the African continent. Brazil is a large agricultural country with massive grain production and significant beef exports. China is the world’s top manufacturer and enjoys the largest consumer market. India is considered as a rapidly growing economy which also has a huge labor market. The current five members are influential in their own regions, which makes the bloc attractive to other nations.

Many of the countries lining up to join the group also have abundant resources but need solid partnership to develop. For example, Bolivia is rich in mines and lithium and has the second largest natural gas field, but it is still one of the most underdeveloped nations in South America. The country must find more cooperation and investment to utilize its recourses while avoiding being intervened by the US. Recently, two BRICS members, China and Russia, have increased their investment on Bolivia’s Lithium industry. As Bolivian President Luis Arce said, “We seek to move towards sustainable, inclusive development and to strengthen cooperation ties with these emerging economies.” Bolivia has officially expressed its interest in joining the bloc.

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Countries in the Global South face economic challenges, including limited growth drivers and financing options, particularly when it comes to infrastructure development. However, the BRICS cooperation mechanism and the New Development Bank based in Shanghai offer these nations an alternative to traditional sources like the World Bank. Through this platform, developing countries can access preferential financing, reducing the risk of debt crises associated with borrowing from developed nations.

The instability of the world also pushes developing countries to look for a new platform of growth frontier. The Covid-19 pandemic and the Russia-Ukraine conflict have caused problems such as food insecurity, energy insecurity and economic decline, making it urgent for emerging economies to seek for new partners for cooperation and investment.

BRICS defends multipolarity and multilateralism

BRICS is opening up the possibility of a more equitable and just international economic order that benefits the world.

BRICS members have signed agreements to boost trade and economic cooperation, such as BRICS Digital Economy Partnership Framework, BRICS Initiative on Trade and Investment for Sustainable Development and BRICS Initiative on Strengthening Cooperation on Supply Chains.

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With such cooperative framework, there has been significant growth in trade among BRICS members over the past decade. According to Russian media, in the first half of 2023, Russia became the third largest trade partner of India. In 2022, the bilateral trade volume between China and BRICS countries exceeded US$550 billion, a year-on-year increase of 12.9%. Since South Africa became a member of BRICS in 2011, it has received at least US$35 billion in investment from other member countries and created 400,000 jobs.

Cuban President Miguel Díaz-Canel described the BRICS group as an important alternative to the international economic order in the face of the hegemony of the dollar. “By defending multilateralism, the BRICS are in opposition to the Cold War concepts, and offer the possibility of a fairer and more equitable international economic order that favors everything,” he said in an interview published by RT.

As more economies express interest in joining BRICS, it becomes evident that many nations are tired of the global economy dominated by a single hegemony and the world governed by a single order, and they are seeking an alternative. The expanding bloc presents a distinct development philosophy, promising new avenues for growth and paving the way towards a more balanced and inclusive global order characterized by multipolarity and multilateralism.

The curtain is drawn for a global shift.

Dou Hongyu is a journalist with CGTN.

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