BRICS (Brazil, Russia, India, China and South Africa) is a relatively young organisation, established in 2009 merely on the economic prospects of constituents in the evolving and shifting global economic order. Its primary focus has been on economic cooperation, development and multilateralism. It is now seen as an alternative to the Bretton Woods model and other emerging economies are interested in joining it. The list of aspirants now stretches to eight ― Algeria, Argentina, Bahrain, Egypt, Indonesia, Iran, Saudi Arabia and the UAE. While some of these countries indeed have significant economic influence and regional importance, it is important to consider various factors before expanding BRICS.
Too early to expand
The BRICS grouping is yet evolving as an organisation and needs time to develop its institutions and governance structure. Its constituents are evolving nationally, establishing robust governance and developmental institutions and exploring associated socioeconomic convergences. BRICS countries differ significantly in terms of economic development. China, with the sheer size of its economy, is challenging existing governance models and institutions while South Africa is still coping with structural economic challenges. India and Brazil remain attractive economically but Russia is cut off, financially and economically.
Recognising this diversity, BRICS members need to engage with each other to build frameworks for cooperation, explore areas of mutual interest and foster collaboration. Accordingly, BRICS countries should prioritise the strengthening of its New Development Bank (NDB) to promote financial and economic inclusion on a global scale. The NDB can play a crucial role in providing funding for infrastructure projects, sustainable development initiatives and other priority areas within BRICS countries and beyond. By enhancing its capacity, expanding its lending capabilities and ensuring efficient governance, BRICS can contribute to reducing the development gap and fostering inclusive growth.
Additionally, the idea of a BRICS currency for trade and internal payment settlements is worth exploring. A shared currency could facilitate trade and investment, reduce transaction costs and enhance economic cooperation within the bloc. However, implementing a common currency would require addressing issues such as exchange rate stability, monetary policy coordination and the establishment of appropriate financial infrastructure. It would also necessitate extensive dialogue and consensus-building among member states, especially on the basis of the intrinsic value of the currency. A currency-commodity basket would be a great idea, reflecting the intrinsic strengths of this currency for global acceptance, beyond internal settlement.
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Focus on selective expansion
Given the stage of evolution and social and economic coalescing among BRICS countries at the institutional, governmental and diplomatic level, there is no immediate need for expanding BRICS, and the existing member countries should prioritise economic and social cohesion among themselves. However, selective expansion could be considered for countries that can actively contribute to the BRICS grouping without bringing in political and diplomatic baggage. The UAE, Saudi Arabia and Indonesia could be potential candidates for inclusion, given their economic significance and potential for cooperation. This approach would allow BRICS to expand its influence while maintaining a focus on economic collaboration and minimising potential challenges from the inclusion of politically complex nations. By carefully selecting new members, BRICS can ensure a smooth integration process and preserve the organisation’s core objectives of economic growth, stability, and alternate governance architecture.
Furthermore, it is crucial to avoid regional lobbying within BRICS, where member countries advocate for specific nations based on regional alliances ― China for Pakistan, Russia for Iran and Brazil for Argentina. Inclusion in BRICS should solely be based on the merits of a member state and their ability to contribute to the objectives and future agenda of the grouping. This includes areas such as the establishment of an alternate currency, developing inclusive payment settlement systems, promoting developmental finance and fostering cooperation in various sectors. By focusing on merit, BRICS can ensure that its expansion is driven by shared goals and mutual benefits rather than political considerations.
Foster greater convergence
BRICS should prioritise economic and social convergences among its member states and should focus on institution building, fostering trust, sharing knowledge, promoting trade and development and advancing developmental finance. It is important for BRICS to remain committed to its core objectives.
It is crucial to recognise that these objectives require long-term dedication and sustained efforts. Global institutions need time and resources to become inclusive and relevant in a rapidly changing world order. BRICS should be patient and persistent in its pursuit of building effective institutions that can address the evolving needs of its member states and contribute to the global economic landscape. By maintaining a steadfast focus on its core goals and patiently working towards them, BRICS can strengthen its cooperation, enhance mutual understanding, and foster sustainable development within its member states and beyond.
Ram Singh is a Professor at the Indian Institute of Foreign Trade New Delhi. Surendar Singh is an Associate Professor at FORE School of Management, New Delhi.