BRICS, a coalition of developing countries, has officially invited six countries to join the bloc, South African President Cyril Ramaphosa announced at the 15th annual summit in Johannesburg.
The group reached an agreement to invite Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates (UAE) to join BRICS, with membership coming into effect in January 2024.
All the invited countries had previously submitted proposals to become members.
“We value the interest of other countries in building a partnership with BRICS,” Mr. Ramaphosa said in an Aug. 24 statement, adding that “we have tasked our foreign ministers to further develop the BRICS partner country model and a list of prospective partner countries and report by the next Summit.”
It has been reported that around 19 other nations have expressed interest in joining BRICS.
The objective behind bolstering the BRICS partnership is “to unlock infrastructure and development financing” and reform the multilateral trading system “so that we create a conducive environment for fair trade,” the South African president told a press briefing.
“This was part of the founding vision of the New Development Bank,” Mr. Ramaphosa said. “The Bank is playing a leading role in efforts to increase the resilience of the Global South, and to bring fairness to global trading and financial systems by strengthening the use of BRICS currencies.”
Heading into the meeting, the so-called BRICS bank confirmed that it is planning to issue its first rupee bond by October, one week after announcing a rand bond.
“NDB is seeking to increase its presence in the local capital markets of its member countries, to fund its robust portfolio of local currency loans,” said Vladimir Kazbekov, the BRICS Bank’s chief operating officer, noting that an example would be an infrastructure project in South Africa that would be financed in the Chinese yuan and not the U.S. dollar.
Next year’s summit will take place in the Russian city of Kazan.
BRICS Influence
Russian President Vladimir Putin congratulated the new members in a video message.
“I would like to congratulate the new members who will work in a full-scale format next year,” Mr. Putin said in a statement. “And I would like to assure all our colleagues that we will continue the work that we started today on expanding the influence of BRICS in the world.”
Moscow had initially opposed expanding the entity for the first time in more than a decade. However, Chinese leader Xi Jinping, who called the additions “historic,” had campaigned for growing the bloc to “unite and cooperate with developing countries.”
“It will inject new impetus into the BRICS cooperation mechanism and further strengthen the power of world peace and development,” Mr. Xi said at the summit.
Rep. Marjorie Taylor Greene (R-Ga.) wrote on X, the platform previously known as Twitter, that she is “purely disgusted” that the GOP presidential candidates failed to acknowledge the “China-driven BRICS.”
“Yet they were all clueless that the bigger threat to the U.S. is China-driven BRICS that will tank our economy and destroy our dollar,” she said. “I’m done with America last foreign policy.”
A Paradigm Shift
BRICS, formed in 2009, presently accounts for about 40 percent of the world’s population and possesses approximately a quarter of the global gross domestic product. The coalition’s contribution to the world economy in purchasing power parity (PPP) exceeded the G7 last year, reaching 32 percent, compared to the Western group’s 30 percent.
By growing the bloc of developing economies, it is projected to represent 30 percent of global GDP, totaling roughly $30 trillion.
“We already live in a post-American and a post-Western world,” Jeffrey Sachs, a U.S. economist and public policy analyst, said in a recent interview with Die Weltwoche. “We’re in a world where the BRICS countries are larger than the G7 countries. The U.S. is a quarter of a century out of date.”
A key development coming out of the yearly meeting is the BRICS’ energy security, particularly for heavy importers China and India. The institution will now have the globe’s largest crude oil producers: Iran, Russia, Saudi Arabia, and the United Arab Emirates (UAE).
Estimates suggest that BRICS countries will now control roughly 80 percent of the world’s oil reserves. China, for example, holds nearly 1 billion barrels of crude oil, making it the world’s largest government-controlled stockpile.
Death of the Petrodollar?
This has been a decades-old system of dollars paid to oil-producing economies for their exports, with the dollar representing 80 percent of international transactions.
In recent months, a growing number of markets have made non-dollar payments. Earlier this month, India and the UAE finalized a settlement in the rupee, and the two sides plan to engage in more bilateral trade settled in rupees and dirhams.
Meanwhile, over the past year, there had been rampant speculation that the group would devise a new basket reserve currency. But this was ostensibly off the table at the summit, according to Anil Sooklal, South Africa’s ambassador at large: Asia and BRICS, who told a media briefing in July that a BRICS currency was not on the agenda.
In an appearance over a video link at the start of the annual get-together, Mr. Putin purported that the concept of a common currency was a “difficult question” and something that policymakers would solve. Still, BRICS countries remain steadfast in their de-dollarization efforts as they intend to shift away from the greenback and trade in local currencies.
Ultimately, the de-dollarization process and the various strategies employed will continue to be a slow process, according to ING economists.
“Until international issuers and investors are happy to issue and hold international debt in non-dollar currencies – and the take-up of CNY Panda bonds has been very slow indeed – we suspect this will be a decade-long progression to a multi-polar world, a world in which perhaps the dollar, the euro and the renminbi become the dominant currencies in the Americas, Europe and Asia respectively,” they wrote in a research note on Aug. 24.
From The Epoch Times
