The BRICS’ invitation to six more nations to join their group is an important initiative promoting greater global influence for major EM countries.
The Chinese sage, Lao Tzu, taught that a journey of a thousand miles begins with a single step. The invitation for Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the UAE to become full members of BRICS may not transform emerging-market (EM) countries’ status immediately—but we believe it’s the first step on a significant journey.
The BRICS acronym was originally popularized to describe five prominent EM countries—Brazil, Russia, India, China and South Africa—with the potential to dominate the global economy by 2050. Today, BRICS denotes an organized group that seeks to further economic cooperation between its members and to advance their economic and political standing. The group is growing, becoming more heterogenous, and arguably getting more determined to reach the members’ individual goals through collaboration. Traditional thinking might characterize the expanded BRICS group as having limited common ground. But we think it’s risky to dismiss the potential shift in power arising from the group’s growth.
While the BRICS have divergent interests, they can still collaborate effectively to resolve their differences. A case in point was Vladimir Putin’s decision “by mutual agreement” not to attend the recent 15th BRICS summit. The objective was to avoid diplomatic embarrassment for the host country South Africa, given the International Criminal Court’s arrest warrant against the Russian president. In our view, this resolution reflects the BRICS’ general approach: cooperation and soft power.
Can the BRICS Achieve Their Goals?
So far, economic convergence with developed markets has been disappointing. Only China can point to discernible progress over the past decade, and even rapid Chinese growth rates have achieved only around 20% of US wealth levels, measured by GDP per capita.
But economic convergence isn’t the only BRICS objective. At the August summit, politics and security issues were described as the “backbone of cooperation” to achieve inclusive multilateralism. The BRICS’ real aim is no less than a “restructured global political, economic, and financial architecture that reflects the contemporary world and is more equitable, balanced and representative.” That will take time to achieve. But with the accession of the six new members on January 1, 2024, the group will be taking on a new dimension. And the summit’s directive to develop the BRICS partner-country model (and a list of prospective partner countries by the 2024 meeting) means further expansion is likely.
Meanwhile, the BRICS are pressing their claims for a fairer world. At the summit, the group called for the review of International Monetary Fund (IMF) quotas to be finished by mid-December 2023 as planned, with a greater share of drawing rights to be allocated to EM. It also argued for EM representation among the leadership of the IMF and World Bank as part of a wider reform program of Bretton Woods institutions. We believe that these moves would make the institutions that are so deeply entwined with EM even more legitimate.