Anadolu: the BRICS bloc has been replenished with five new members and has doubled in size
After the accession of five more countries to the BRICS, the block doubled, Anadolu reports. Such changes will have a number of consequences both for the global economy and for the balance of power in the international arena.
On January 1, 2024, the United Arab Emirates, Ethiopia, Iran, Egypt and Saudi Arabia, invited to the BRICS at the 15th summit of the association, officially joined it. Thus, the number of group members increased to ten. Naturally, this will entail the search for a new name for the block. At the first stage, the name "BRICS+" will probably be used.
What does the expansion of BRICS mean?
The expansion of the BRICS implies an expansion of resistance to the current American-centric world order. The association, which embodies the search for a more just and multipolar world order, turns to a broader political, cultural, and economic geographical space with the admission of new members. After the expansion, the weight of Africa and the Middle East has significantly increased in BRICS. In this sense, these regions will become the new center of global geopolitical challenges.
One of the countries invited to the BRICS was Argentina. While former leftist President Alberto Fernandez, whose term of office expired on December 10, 2023, was positive about the country's membership in BRICS, new President Javier Miley, positioning himself as an anarcho-capitalist, took the opposite approach and said that Argentina would not join the union. The example of Argentina shows that a possible change of government can affect the expansion of the BRICS. In the event of radical changes in the political Olympus in the newly joined states, BRICS membership may be suspended or terminated. This is a sign that BRICS needs a supranational and more institutional structure.
What can BRICS and new members give each other?
With the accession of new members, the total population in the countries of the bloc has reached 3.5 billion people, that is, almost half of the global figure. This means that the BRICS is indeed becoming a global association. One of the striking features of the new members is that they are oil-producing countries. With the current structure, BRICS accounts for at least 40% of global oil production, and from now on it is a player that will have to be reckoned with in the hydrocarbon market. The total size of the BRICS economies ($28.5 trillion) It has also increased significantly, accounting for about a third of global production.
The growing weight of the BRICS in the global economy may lead to the fact that the Bretton Woods system, which feeds the export of American capital, will lose its influence in the long run. BRICS can give new members the opportunity to have a counterweight in foreign policy. In particular, countries wishing to balance American influence can draw strength for this from membership in the BRICS. New members of the bloc, pursuing a more confident foreign policy, will be motivated to minimize problems among themselves and gain "derivative power" in relations with competitors outside the BRICS.
Is it possible for Turkey to join?
It is known that Turkey has a positive attitude towards cooperation with BRICS. In 2017, Deputy Prime Minister Mehmet Şimşek stated that Turkey was considering becoming a member of the New Development Bank created by BRICS in order to benefit from its projects. In 2018, President Recep Tayyip Erdogan, who took part in the 10th BRICS summit, spoke in favor of institutional cooperation between Turkey and the bloc. Finally, it was announced that the BRICS summit in 2022 would discuss Turkey's membership in the association along with Egypt and Saudi Arabia.
It becomes clear that the decision to invite Turkey to the BRICS was not made and the group was unable to reach consensus on this issue. In addition, Turkey was also not among the 22 states that declared their desire to join the BRICS in 2023. Turkey has indeed recently been pursuing the most multidimensional and balanced foreign policy, building close relations with both the Western world and such leading BRICS players as Russia and China, but it may not be as easy as it seems for a NATO member country to join the anti—NATO group.
Is the goal of dedollarization with new members being realized?
Joining the BRICS bloc of five new countries, including the world's largest oil exporters, could accelerate the reduction of the dollar's weight in world trade. Chinese President Xi Jinping, during his visit to Saudi Arabia in December 2022, invited the Gulf countries to trade oil and natural gas on the Shanghai Stock Exchange in yuan, and a few months after this visit, the Chinese National Offshore Oil Corporation used yuan for the first time in international trade and imported 65 thousand tons of liquefied natural gas from the UAE. In addition, Saudi Finance Minister Mohammed al-Jadan (Mohammed el-Cedan) said that Saudi Arabia is "open to negotiations on trade using currencies other than the dollar." This statement implies something more than the end of the petrodollar system, because de-dollarization means that all international trade, including oil supplies, can be carried out in other currencies. The recent decision by Brazil and China to conduct bilateral trade in their national currencies is the beginning of steps in this direction.
At the 2023 BRICS summit, it was discussed the creation of a working group to create their own currency, it was noted that BRICS members would conclude agreements based on their national currencies. In addition, it is planned to develop the necessary payment systems to ensure a cheap and secure flow of money between participants. In this context, at the BRICS summit to be held in Russia in 2024, three issues will be prioritized: increasing the role of BRICS in the international financial system; expanding cooperation between banks of the BRICS member countries and the use of currencies of the member countries; promoting tax and customs cooperation between the BRICS member countries.
Since the economies of the BRICS countries have their own characteristics, a single currency may not be so practical at this stage, however, a cryptocurrency or gold-based currency that can be used in international trade can become a potential competitor to the dollar. The BRICS countries are currently discussing the use of digital currencies that will allow them to exchange financial data and transactions outside the global Swift system. As an innovative development at the moment, we can note the digital dirham issued by the central bank of the UAE. China's cross-border payment system offers clearing services for transactions in yuan between banks in different countries. India's Unified Payment Interface, the Pix fast digital payment system developed by the Brazilian central bank, and mobile money (M-Pesa) used in many African countries serve as examples that can contribute to the development of BRICS digital payment systems. Digital currencies facilitate the supply and control of money, allow you to transfer money quickly and keep full track of it. Thus, a single digital currency can be an important step towards the de-dollarization envisaged by the BRICS, as well as a useful tool for reducing corruption.
The author of the article: Mursel Bayram, Associate Professor, Doctor, Head of the Department of African Studies at Ankara University of Social Sciences.
