Source: Daily Maverick
BRICS expansion adds clout to bloc, but also imports new tensions
South African President Cyril Ramaphosa (far right), with fellow BRICS leaders President of Brazil Luiz Inácio Lula da Silva (third from right) and President of China Xi Jinping (second from right) pose for a photo with delegates, including the six nations invited to join the BRICS group, Argentina, Egypt, Ethiopia, Iran, the United Arab Emirates and Saudi Arabia, during the closing day of the BRICS Summit at the Sandton Convention Centre on 24 August 2023. (Photo: Per-Anders Pettersson / Getty Images)
By Queenin Masuabi and Peter Fabricius
24 Aug 2023 12
Expanding BRICS from five to 11 members offers the bloc greater economic and political clout, but could also create tensions between members and with the West.
Admitting six new members to BRICS will add heft to the bloc’s efforts to rebalance the global economic and political order. But it will also bring its own problems, including importing new tensions.
And, in particular, accepting Iran raises the prospects of souring relations with the US and the wider West.
The five BRICS leaders announced on Thursday after their 15th summit, in Johannesburg, that they would admit Iran, Egypt, Ethiopia, Argentina, Saudi Arabia and the United Arab Emirates as full members on 1 January 2024. Twenty-two countries had formally applied for membership, and wrangling over which to admit delayed by a day the release of the summit declaration and the announcement of the new members.
At the BRICS outreach summit on Thursday, when the BRICS leaders were joined by about 60 other world leaders, they all agreed that the expansion of BRICS from five to 11 members would give it greater clout.
Brazilian President Luiz Inácio Lula da Silva said the addition of the six members would increase the combined GDP of the BRICS countries to 37% of global GDP in purchasing power parity terms and increase its share of the world population to 46%. He dismissed concerns that the bloc would become too unwieldy, saying its expanded membership would help it to find creative solutions to the problems facing the world.
Anil Sooklal, South Africa’s chief diplomat or “Sherpa” on BRICS, said that taking on three oil-rich countries — Iran, Saudi Arabia and the UAE — would bring in a new part of the global economy which had not been represented and would further strengthen the bloc.
He dismissed concerns that admitting Iran could fundamentally alter the character of BRICS and antagonise the US and the West.
“Not at all. Iran has no problem with BRICS. It’s the West that has imposed unilateral sanctions against BRICS,” he added, referring to Western sanctions on Russia and Iran.
“BRICS doesn’t recognise unilateral sanctions. Iran will add value, so will Saudi Arabia and the UAE.”
Li Kexin, the Chinese director-general of international economic affairs, also dismissed these concerns, insisting that BRICS was not an anti-Western alliance and that the expansion did not change that. “We are not seeking confrontation,” he insisted.
He was asked, though, if accepting Iran as a new member would not heighten tensions with the US, which has a hostile relationship with Tehran. Li recalled that China had recently mediated a reconciliation between Iran and its regional rival Saudi Arabia.
“Happily, they both joined BRICS together,” he added, saying that BRICS could now become a platform for continuing to improve relations between Iran and Saudi Arabia.
Potential tension
However, Gustavo de Carvalho, a senior researcher on Russia-Africa ties at the South African Institute of International Relations, cautioned that the expanded membership could import some problems.
He noted that Lula had championed Brazil’s neighbour Argentina, which currently, like Brazil, has a progressive government. However, he warned that either a centre-right or a far-right party in Argentina was favoured to win the elections in October and this could usher in an anti-BRICS government.
Despite China’s brokering of a reconciliation deal between Iran and Saudi Arabia, he said, there were still considerable tensions between them.
He believed that admitting Egypt and Ethiopia could import the tensions between the two countries over Ethiopia’s construction of the giant Grand Ethiopian Renaissance Dam on the Blue Nile, which Cairo says could endanger its vital water supply.
De Carvalho said relations between Iran and Argentina remained strained by suspicions that Iran had been behind a major terrorist attack on a Jewish centre in Buenos Aires in 1994.
Nevertheless, he added that BRICS was already an organisation of five countries with very different interests and that China and India had continuing border disputes which had recently flared into warfare.
De Carvalho said he believed Russia had sponsored Iran’s admission not only for ideological or geopolitical reasons, but for economic reasons as it sought new markets in the Middle East and Africa to replace those lost in Europe because of sanctions against its invasion of Ukraine.
He said South Africa had backed Egypt and Ethiopia to get another African country into the bloc.
Saudi Arabia and the UAE were probably backed by China and India, respectively, though he added there was probably wide consensus on admitting the rich oil states, not least because they would boost the bloc’s economic heft and make the move towards trading in local currencies — rather than the US dollar — more viable.
Criteria for membership
Sooklal said the guiding principles for the selection of additional member states had been finalised by heads of state only on Tuesday.
These included that countries should have a substantial population, should be from the Global South and be in good standing in their regions. They also sought to have a fair geographic representation, coupled with diversity.
“I think it is a good mix because it is one of the guiding principles. We admitted a country — Argentina — from Latin America, two from Africa, Egypt and Ethiopia, and three from Western Asia. We are looking to develop the criteria for partner countries, and ministers have been tasked to formulate criteria,” he said.
Li disclosed that until the last minute, the five BRICS leaders had only intended to admit new members as BRICS partners. But they had then realised they had to take the candidates more seriously and admit them as full members. He said the BRICS foreign ministers had been tasked with establishing partnerships with the others in the list of 22 that had formally applied for membership but had not been granted it this week.
Sooklal said even with 11 countries, the expanded BRICS was a small group out of the totality of the Global South.
“The door is not shut on the other members who have not been admitted. So we now have to work on modalities of how we go about partner countries and make a determination on when a further expansion will be appropriate.”
There has been much speculation about whether BRICS would change its name and some tongue-twisting new acronyms have been proposed on social media.
But Sooklal said he did not think the name would change — or at most would change to BRICS-Plus. He noted that the G77 + China had not changed its name even though it now had 120 members.
“The name BRICS has become a global brand in terms of championing the Global South. So we are confident the term BRICS will remain.”
Sooklal explained that it was important the six new members fully embraced all dimensions of BRICS cooperation and fully grasped how BRICS functioned. He believed the differences between the countries would not be a stumbling block for the forum.
“We are not saying BRICS must be a homogeneous entity — the global community is not homogeneous. Yes, there are differences, but we are not bringing those into the BRICS group; we are mature enough to bracket those,” he said.
Many were surprised by Indonesia’s exclusion from the expansion while Ethiopia was asked to join the grouping instead.
Daily Maverick understands that the BRICS leaders could not reach a consensus about inviting Indonesia, with one country refusing to back this move.
Ethiopia and Egypt were endorsed by South Africa. Daily Maverick understands that the inclusion of Ethiopia was because South Africa did not only want to include a country from North Africa while it also felt that Egypt was perceived as a Middle Eastern country. DM
Source: Africa Intelligence
BRICS seeks to reinvent itself at Johannesburg summit
At this year’s summit in the South African economic capital, the BRICS grouping (Brazil, India, Russia, China, South Africa) agreed to admit six new, non-aligned countries into its ranks. It also voiced its ambitions to create a more structured organisation and transform the block’s economic power into diplomatic and financial influence.
Published on 25/08/2023 at 04:40 GMT Joan Tilouine
In front of the Sandton Convention Center in Johannesburg, where the 15th BRICS summit was held from 22-24 August, an imposing statue of Nelson Mandela towered over a luxury electric car. Inside, the Brazilian president Luiz Inácio Lula da Silva took to the rostrum, quoting the former president of Burkina Faso Thomas Sankara. Over the course of just a few days, heads of state and delegations representing the Global South attempted to outline a model that both revisits the concept of non-alignment, while unreservedly embracing capitalism.
President Lula and his counterparts Vladimir Putin of Russia (joining by conference call), Xi Jinping of China, Cyril Ramaphosa of South Africa, and Prime Minister Narendra Modi of India, are united in their ambition to transform the block’s economic strength – its GDP is greater than that of the G7 – into diplomatic and financial power. Despite India and Brazil dragging their feet, cautious to preserve their Western alliances, a consensus emerged in favour of further expanding the organisation, which last grew in 2010 with the inclusion of South Africa. The African continent now has two new members, with Ethiopia and Egypt set to join BRICS in January 2024, alongside Saudi Arabia, the United Arab Emirates, Iran and Argentina.
Strengthening the organisation’s structure
The organisation’s chair this year is South Africa, which intends to develop its exports and boost its influence as a continental heavyweight. Under its stewardship, BRICS has become more dynamic and structured. The transition from a flexible, decentralised grouping into a more structured organisation was instigated by the member state with the smallest economy. In Pretoria, the Minister of International Relations Naledi Pandor is steering the project alongside other ministers, with the assistance of her BRICS ambassador Anil Sooklal, who is particularly well-connected among diplomats from emerging countries. South Africa has worked hard to put the group’s plans in the media spotlight, while also tightening the ties between the administrations of both existing and new members. In-person and virtual meetings have taken place in Johannesburg throughout the year to draw up an agenda that includes the business community, think tanks and civil society organisations.
With no secretariat or coordinating bodies, BRICS’s structural framework is flexible and, at its core, draws on the work of foreign ministers and the emissaries sent by each member state. The organisation also brings together a myriad of different bodies and working groups, the BRICS Business Council (BBC) being one of the most important. Set up ten years ago, and currently led by the South African billionaire Patrice Motsepe, the council has been given a new lease of life under Ramaphosa’s chairmanship. It now plays a prominent role in economic diplomacy between BRICS members, while also acting as an investment broker and technical consultant to optimise trade and draw up commercial agreements.
Busi Mabuza, who chairs the board of the Industrial Development Corporation (IDC) and the South African chapter of the BBC, is coordinating the discussions and the nine working groups. She has managed to nurture close relations with her partners Sergey Katyrin, president of Russia’s Chamber of Commerce and Industry, Chen Siqing, head of the Industrial and Commercial Bank of China, Onkar Singh Kanwar, an Indian industrialist, and José Serrador Neto, vice president of the Brazilian aerospace group Embraer. At Ramaphosa’s request, Mabuza is also advocating for BRICS to align with the African Continental Free Trade Area (AfCFTA). Invited to the summit for the first time, AfCFTA’s secretary-general Wamkele Mene met with the BBC to underscore the potential of implementing this market on a continental scale and to present infrastructure projects.
Loosening the grip of Western financial institutions
The other key tool that the BRICS grouping has at its disposal is the New Development Bank (NDB). Nicknamed “the BRICS bank”, it was set up in Shanghai in 2015 and is led by the former president of Brazil Dilma Rousseff. Widely solicited during the summit, she met with the five heads of states and shareholders who rely on the NDB in the hope of decreasing their dependence on the dollar and eventually cutting themselves loose of Western financial institutions. The first among these are the International Monetary Fund (IMF) and the World Bank, which keep a close eye on the NDB’s development and positioning. The NDB, which has granted $32bn in loans, has raised funds in renminbi and issued bonds in rupees.
The NDB finds itself under pressure to increase its operations in local currencies from nearly 22% to 30% by 2030. But this doesn’t mean the BRICS bank will be moving away from the dollar. Instead, it is looking to establish a hybrid model, allowing it to deal with the political directives of its shareholders, which include Russia. The NBD had to suspend its operations in Russia to avoid ending up in the crosshairs of the US authorities. It is currently preparing for Iran’s imminent inclusion in BRICS, given the country is currently under sanctions from the West. The Iranian president Ebrahim Raisi met with his counterparts and discussed this delicate matter with Rousseff. The BRICS leaders have instructed their finance ministers and the governors of the central bank to consider financial mechanisms in the currencies of its member states. Between now and the 2024 summit in Russia, the group’s members want to strengthen their institutional mechanisms, and a working group is due to consider the possibility of a reference currency. Putin, who will be chair of BRICS next year, is keen on the prospect.
In Johannesburg, Rousseff has tried to diversify NBD’s investment portfolio on the African continent, which at present only includes South Africa with $5.3bn of projects. She has also sought to tighten links with continental bodies, like the African Union Development Agency (AUDA-NEPAD). With the relevant leaders, she is studying the applications of three or four prospective NDB members (the latest additions were Egypt, the United Arab Emirates and Bangladesh in 2021). Algeria, whose application to join BRICS has not been approved, had previously announced, via President Abdelmadjid Tebboune, a $1.5bn contribution to the NDB.
Greater alignment with regional African organisations
When it comes to welcoming new members into BRICS, Beijing is proving particularly keen on expansion, which has created division and rekindled tensions with India. The group’s largest economy also wants to extend its influence and proliferate its governance model, as does Russia, which is seeking to break out of its isolation. BRICS members tend to consider themselves as peacemakers and proponents of a multi-pronged diplomatic approach, but they will soon have to put their mediation skills to the test, notably between Egypt and Ethiopia, to prevent the group from being undermined by internal disputes.
Almost all African leaders travelled to the Johannesburg summit or sent high-level representatives in their place. Among the heads of state present were Abiy Ahmed of Ethiopia, Nana Akufo Addo of Ghana, Hakainde Hichilema of Zambia, Isaias Afwerki of Eritrea, Denis Sassou-Nguesso of the Republic of Congo, and Macky Sall of Senegal. One notable exception was Rwandan president Paul Kagame, who still has reservations about this political and economic grouping dominated by major Asian countries, preferring the Singaporean model instead. The United Nations secretary-general Antonio Guterres also attended. The Chair of the African Union Commission Moussa Faki Mahamat was represented by his trade commissioner, Albert Muchanga.
Pretoria insisted on the attendance of the heads of African regional organisations and encouraged them to reflect on avenues for alignment with BRICS on financial, economic and political issues. Security was also on the agenda, with Putin pushing for the heads of BRICS security services to meet regularly and cooperate on counter-terrorism and illicit financial flows.
Martin Plaut 