Foreign Policy magazine’s Catherin Osborn reports on the upcoming meeting of the BRICS.
Alongside the president of Brazil, the president of Bolivia and a delegation from Argentina are preparing to travel to Johannesburg, South Africa next week for the BRICS summit, the annual gathering of the group comprised of Brazil, Russia, India, China, and South Africa. The buildup to this year’s summit has attracted an especially high degree of international attention, in part due to speculation over whether Russian President Vladimir Putin would attend in person, and in part because of the growing ranks of countries that have expressed interest in joining the group.
Putin will only attend virtually. But officials from other countries who hope to join the group—for instance, those of Argentina and Bolivia—will be there in person. Host country South Africa says that over 40 nations have expressed interest in joining, including Saudi Arabia, Indonesia, and the United Arab Emirates.
Since the group’s founding in 2009, BRICS member countries have had their share of disagreements, but they’ve continued to hold meetings on a wide range of issues, including health governance, business, and agriculture, under the shared belief that economic and political ties among the group will help lead the transition to a world in which the United States is no longer a hegemonic power.
When Russia invaded Ukraine last February, Western countries tried urgently to convince the rest of the world to follow their lead and distance themselves economically and politically from Moscow. But most countries in the global south opted out of this isolation campaign for a mix of reasons, including economic concerns, the history of proxy violence that many of them experienced during the Cold War, and a dissatisfaction with perceived double standards for which countries get punished for breaking the rules of the international system.
The Western campaign to rally support for Ukraine has channeled over $100 billion in direct aid to the country and flexed the influence of NATO and the West as a pole of global power. But at the same time, the burgeoning interest in BRICS membership is an endorsement of what BRICS has long touted as its goal: a multipolar world order.
A keystone BRICS achievement was the 2015 founding of the New Development Bank (NDB). In contrast with the World Bank, developing countries have a much larger voting share in the NDB, and some loans are made in local currencies rather than U.S. dollars. In May, NDB President Dilma Rousseff, the former president of Brazil, said the bank aimed to make 30 percent of its loans in currencies of member countries between the years 2022 and 2026. Nondollar loans “protect borrowers from fluctuations in the value of the U.S. dollar,” economist Daniel Sousa of Brazil’s Ibmec University told Foreign Policy.
The appeal of the NDB in part reflects member countries’ critiques of major multilateral financial institutions, but it also exists to fill a funding gap. The World Bank and other similar banks, even when added together, aren’t big enough to fund all of the projects that lower- and middle-income countries require to meet the climate crisis and other development needs, Boston University Global Development Policy Center’s Rebecca Ray told Foreign Policy.
A 2021 estimate found that Latin America and the Caribbean would need $2.2 trillion in infrastructure investment to meet the U.N. Sustainable Development Goals by 2030, but last year the World Bank approved only around $70 billion across the entire world, and not all of it for infrastructure, Ray observed. “The sheer scale of the demand is far beyond what any one source of financing can fill.”
The fallout of Russia’s invasion of Ukraine created problems for the bank. It had to freeze new projects in Russia due to international sanctions and even so was downgraded by credit ratings institution Fitch for its financial exposure to Russia. After these setbacks, raising dollars on international markets has become more expensive for the NDB, Reuters reported.
One way of responding to the challenge is to increase the operational use of nondollar currencies. According to Sousa, this also helps insulate against potential future sanctions by the United States, which has increasingly weaponized the dollar as part of its foreign policy in recent decades.
Bangladesh, Egypt, the United Arab Emirates, and Uruguay have recently joined the ranks of the NDB. And just like the broader BRICS group, the bank is currently in talks with further potential new members. But while the NDB has been open to expansion for years, membership in the political club has been harder to come by.
New interest has prompted fierce debate within BRICS, precisely because the goals of the group are far broader and less-defined than those of the NDB. The Getulio Vargas Foundation’s Oliver Stuenkel wrote for Foreign Policy in June that in their quest for nonalignment, Brazil and India are wary of admitting members that have pursued anti-Western foreign policies, such as Iran, Syria, and Venezuela. Beijing, on the other hand, has long hoped to expand the bloc “and slowly transform [it] into a China-led alliance.”
India’s foreign minister said Wednesday that New Delhi had an “open mind” toward expansion, but that new members must meet certain unspecified criteria. Defining those criteria are on the agenda for next week’s summit, as are peace proposals for the war in Ukraine and the use of additional nondollar currencies, Brazil’s foreign ministry said Wednesday.
What’s clear is that with increased interest in both the NDB and the BRICS political club, more countries are betting on the possibility of a more evenly distributed map of global power. Juan Gabriel Tokatlian of Argentina’s Torcuato Di Tella University and Monica Hirst of Brazil’s National Institute for Science and Technology Studies wrote recently in International Politics and Society that in the global south, “there is a growing perception that de-dollarization is a step towards a multipolar world.”