The five BRICS founding members will hold a summit in Johannesburg this week together with numerous other countries seeking to join the group.
The 15th heads of state from August 22-24 is headlined by BRICS members Brazil, Russia, India, China and South Africa, but numerous other nations including the UAE, Saudi Arabia, Egypt, Iran, Turkey, Indonesia, Nigeria, Argentina plan to attend and hope to join the bloc.
The United Nations Secretary-General Antonio Guterres and about 40 heads of state and government are expected at the summit where a key talking point will be how an expansion of BRICS can help to moderate the West’s dominance of global geopolitics as well as challenge the use of the American dollar’s dominance in global trade.
South African President Cyril Ramaphosa, Chinese President Xi Jinping, Indian Prime Minister Narendra Modi, and Brazilian President Luiz Inacio Lula da Silva have confirmed their attendance to the first in-person summit since 2019 due to the pandemic.
Vladimir Putin – represented by Russian Foreign Minister Sergei Lavrov – will attend virtually in order to avoid arrest for alleged war crimes if he enters the country.
“South Africa supports the expansion of the membership of BRICS,” Ramaphosa said in a televised broadcast on Sunday night. “An expanded BRICS will represent a diverse group of nations with different political systems that share a common desire to have a more balanced global order.”
China may be the biggest winner of a larger BRICS footprint which could increase its clout as it wrestles with the US over trade and geopolitics.
“BRICS expansion would be a sign of China’s growing influence,” Oliver Stuenkel, a German-Brazilian political scientist wrote in The Economist.
The five BRICS countries – which account for more than 40% of the world population and about 26% of the global economy – will also discuss the possibility of launching a joint currency or common system of payment to improve trade within the bloc.
Brazil’s Lula has said BRICS countries should explore other options of making payments without using the dollar, saying earlier this month: “Why does Brazil need the dollar to trade with China?”
A common currency is also seen as a protection for the group’s members from the fallout from higher interest rates in the US. It is also seen as a buffer against the “weaponization” of the dollar as a sanctions instrument by Washington.
The sanctions against Russia, which include denial of Moscow access to US dollars, have spurred this debate among BRICS members.
“Any expansion of the BRICS grouping could determine the speed with which the bloc adopts commercial and financial systems outside of the dollar sphere,” the Dutch bank ING’s analysts Chris Turner, Dmitry Dolgin and James Wilson wrote in a note to clients on Friday.
Fundraising for the New Development Bank, widely known as the BRICS bank – established in 2015 as an alternative to the International Monetary Fund and World Bank – will be on the agenda.
The bank, which raised $94 million in its debut South African bond auction last week, has lent more than $30 billion to projects in the founding member nations.
The UAE, Egypt and Bangladesh have already joined the bank, and Saudi Arabia is among other countries in discussions to become members. Admitting Riyadh is likely to be confirmed at the summit – a key step in expanding the bank’s pool of resources.
“We attach great importance to the Kingdom of Saudi Arabia and are currently engaged in a qualified dialogue with them,” the Shanghai-based BRICS bank has said of the world’s second-largest oil producer.
Dilma Rousseff, the bank’s president, has said the lender would finance more projects in local currencies in order to strengthen domestic markets and protect its borrowers from the risk of currency fluctuations.
(Editing by Brinda Darasha; brinda.darasha@lseg.com)
