New Delhi, August 28: The 15th BRICS summit, which includes Brazil, Russia, India, China and South Africa, was held in Johannesburg, and focused mainly on two issues; First, the admission of new members to the five-nation organization and the promotion of trade using the local currency of the member states.
Encouraged by the success of BRICS on both the economic and geopolitical fronts, a growing number of countries in the Global South are said to see it as an attractive factor for multilateralism.
More than 40 countries, including Algeria, Egypt, Thailand, and the United Arab Emirates, as well as major G20 countries such as Argentina, Indonesia, Mexico, and Saudi Arabia, have formally expressed interest in joining BRICS.
But in the end only six more were added to the original member list.
South African President Cyril Ramaphosa officially announced the expansion of BRICS, and now Iran, Saudi Arabia, Egypt, United Arab Emirates, Argentina and Ethiopia will join the BRICS.
This is clearly an attempt to reshape the global world order and provide a counterweight to the United States and its allies.
Chinese President Xi Jinping described the expansion as “historic”.
Xi has been leading the push for the admission of new members, and thus the formation of the expanded BRICS group as a means of enabling the Global South to have a stronger voice in world affairs.
Welcoming the expansion of the five-nation group, Prime Minister Narendra Modi said, “With this move, the belief of many countries in a multipolar world order will become stronger.”
Media reports ahead of the summit quoted Chinese officials promoting the view that the bloc should be a rival to the G7. But they have kept silent about plans to boost the group’s influence on the world stage. It would depend on how well they could work in unison, as the addition of new members made it even more disparate.
The Inter-American Dialogue’s Asia and Latin America Program Director, Margaret Myers, was quoted by the Guardian as saying that the move is more symbolic than anything else – it is an indication of widespread Global South support for the global reset. to request.
The decision to recognize Iran marks a win for both Russian President Vladimir Putin and Xi, giving the group a more anti-Western stance. Iran, which was looking for ways to circumvent US sanctions, was already elated, and the same can be said of Putin, who will host the next summit and address the Johannesburg summit virtually.
While India has not opposed BRICS expansion, it has pushed for rules and procedures that will govern which countries can join the bloc. Earlier, China’s push to integrate Pakistan into the BRICS alliance raised a diplomatic dilemma, but in the end it was not among the lucky six.
For Argentina, which is facing serious economic problems, membership may provide a lifeline to escape the deepening crisis. Its president, Alberto Fernandez, said this represented a “new scenario” for the country. Ethiopia became the only low-income country in the group. Its Prime Minister Abiy Ahmed described it as a “great moment” for his country.
Al-Jazeera quoted Ayham Kamel, head of the Middle East and North Africa research team in the Eurasia Group, as saying that in one step, the Middle East and North Africa region could include four members of the expanded BRICS organization. This would structurally strengthen its influence regionally and globally.
Al Jazeera quoted Trita Parsi, Vice President of the Quincy Institute for Responsible Government, as saying: The enhanced region would pave the way for a multipolar world, saying: “As the world moves away from unipolarity, the United States is also losing its ability to act as a gatekeeper, no longer A single country can decide who is in the community of nations and who is an outcast.
However, the main takeaway from the summit was described by Ryan Berg, head of the Americas program at the Center for Strategic and International Studies, as quoted in the Guardian: “For China and Russia, this is a win. They have been.” Lobbying for it for over five years now. For China, this allows them to continue building what they hope will be a Beijing-centric system. As for Russia, which is hosting the conference next year, it sees a huge opportunity in its current moment. of great isolation.”
In addition, the BRICS members also discussed sustainable development in the era of climate change, global governance reform, and the orderly process of increasing local currency trade, which is being explored by several emerging economies and as India is pushing towards trading in the Indian rupee.
Hippolyte Vovack, chief economist and director of research at the African Export-Import Bank (Afreximbank), told The Atlantic that the dollar remains the world’s reserve currency, and that the pace at which other currencies have eroded their dominance has been gradual.
But a growing number of experts, including senior US government officials, recognize that aggressive use of economic and financial sanctions to advance US foreign policy could threaten the dollar’s hegemony in the years ahead.
There were also rumors that the summit might announce a reserve currency issued by the BRICS group for use by members in cross-border trade. Although member states collectively enjoy a comfortable balance of payments surplus, they do not have the financial means. Hippolyte saw the creation of such a currency because it lacked the institutional structure and scale to achieve this end sustainably.
Reflecting on these challenges, Anil Soklal, South Africa’s ambassador-at-large to BRICS, confirmed earlier in July that the BRICS currency will not be on the agenda during the summit, although expanding trade and settlement in local currencies will.
According to Hippolyte, BRICS countries are already making great strides in using local currencies for cross-border transactions.
Their use helps sustain and enhance cross-border trade between members, even in a challenging operating environment and increasing geopolitical risks. It also eases balance-of-payments constraints associated with dollar financing, which boosts local economies.
Finally, the 15th Summit served as a new ground in developing cross-border payment systems and incubating local currencies to fortify international trade, as well as sending a warning light to US-led Western democracies that the concerns of developing countries should not be ignored any further. .
(Asad Mirza is a senior political and international commentator based in Delhi.)
Source: IANS
Disclaimer: This story has not been edited by the WBSETCL team and is auto-generated from syndicated feed.
