Table of Contents
Introduction
The BRICS formation, which includes Brazil, Russia, India, China and South Africa, was formed as a union of rising economies that have the potential to transform economic rules in the world. In the last ten years, it has transformed itself as a disorganized political discussion into an institution that has a development bank, frequent summits and a growing agenda. More recently, mention of BRICS+ has been an indication of the second step: the extension of membership to new nations, dispersed throughout the Global South. This possible enlargement has far-reaching economic consequences not only to the members of this bloc but also to the Western economies as well as the developing countries.
The Original BRICS Vision
At the time of the coinage of the BRIC acronym in 2001 by Goldman Sachs, this was a short form of high growth economies that would take the G7 by storm. In 2010, South Africa was added and gave a vital African voice and turned BRIC into BRICS. The five countries combined comprise approximately 40 percent of the population of the world and over a quarter of the world GDP.
In addition to statistics, BRICS was aimed at providing an alternative to western dominated institutions such as IMF and World Bank. This aspiration was highlighted by the invention of the New Development Bank (NDB) in 2014 and the Contingent Reserve Arrangement. Although the bloc is still heterogeneous, it has established South-South cooperation and an opposition to the Western economic and political standards.
The Push Toward BRICS+
During the recent summits, especially in 2022 and 2023, BRICS leaders have discussed the possibility of the expansion of the membership to include additional emerging and middle-income economies. Other countries have shown interest in this and they include Argentina, Egypt, Saudi Arabia, the UAE, and the Indonesian countries, Nigeria, and the rest. The BRICS+ term is indicative of a more inclusive union that can encompass a much larger population, resource and exchange.
A number of drivers support this push. To begin with, the perception of unfairness in the existing global order is increasingly becoming a source of dissatisfaction to the countries that wish to have better representation. Second, emerging economic opportunities are presented by the emergence of China and India as large markets and sources of finance. Third, in response to Western sanctions on Russia following its invasion of Ukraine, Moscow has sought to strengthen non-Western relations, pushing the bloc outreach.
Economic consequences to the West.
To the West, expanding BRICS+ would translate to more competition in the establishment of trade norms, funding infrastructure, and development patterns. The international financial system is one of these. Should additional nations become part of BRICS and collude on the elimination of dollar dependence, e.g. by settling in domestic currencies or a novel payment system, it would slowly dilute the centrality of the dollar in international finance.
In other implication is in commodity markets. A number of potential BRICS+ members are resource-rich states (such as Saudi Arabia or Nigeria). An organized counterpart to OPEC with a substantial portion of oil, gas, and precious mineral resources can affect the world prices and supply networks. This can make it more difficult to achieve Western energy transitions and diversify beyond shaky suppliers.
In addition, a bigger BRICS would water down Western influence in multilateral forums. An example of this is the already more pluralistic power structure of the G20. In the case of BRICS+ becoming a single voice it can potentially block or redesign agenda on trade, taxation or climate finance that the western countries are concerned with.
But BRICS+ will probably not turn into a fully coherent anti-Western bloc. There is internal disparity between the members in geopolitics, economic structures, and strategic interests. The reserved position of India towards China, the orientation of Brazil towards certain western policies and internal restrictions of South Africa all hamper the cohesiveness of the bloc. Nevertheless, a loosely organized BRICS+ would threaten to complicate the Western control of world economic regulations.
Opportunities and Challenges of Global South.
To developing nations, BRICS+ has its opportunities and threats. On the bright side, the bloc membership would open the door to alternative sources of finance, investment and trade. The NDB and other BRICS arrangements are less likely to have political terms attached as compared to the Western-led lenders. Symbolic status of a country as an emerging power is also provided through membership.
Moreover, BRICS+ would allow collective bargaining to provide the Global South with a greater bargaining power during climate finance, debt relief, and technology transfer negotiations. Through collective front, developing countries would be in a position to negotiate with the western partners or international organizations to yield better terms.
However, the risks are real. Even a bigger BRICS might remain subject to the control of the two largest players, China and India, this rivalry of which is shaping the internal processes of the bloc. Smaller nations can see their interests set aside or be traded as chess. Moreover, should BRICS + reach an overt form of geopolitical arrangement, that is, the partnership of BRICS+ with Russia or China against the west, its members would be subjected to secondary sanctions or lose access to Western investment.
The other obstacle is there is diversity in economic systems. There will be complicated coordination of policies between the commodity exporters, production giants and the service-based economies. BRICS+ will have a hard time to leave declarations behind to implementable programs without a clear organizational structure.
Trade, Investment and Currency Movements.
Among the most talked about facets of BRICS+ is the fact that it will enhance faster adoption of non-dollar currencies in trade. Already China and Russia transact more in yuan and rubles. The entry of the large energy exporters such as Saudi Arabia would be a historic move should they agree to sell oil in other currencies. A gradual diversification would make Western leverage diminish in the imposition of financial sanctions, even though the dollar might still dominate.
BRICS + could direct increased resources of South-South infrastructure and technology projects in the investment area. This may serve in bridging funding gaps, especially in Africa, whereby the Western funds have mostly been constrained or conditional. However, a lot will be determined by whether NDB is capable of expanding its lending and ensuring good standards of governance.
In the case of global supply chains, BRICS+ might create new production networks not centred on the conventional Western hubs. The bloc has a potential of facilitating intra-BRICS+ trade and industrial collaboration as nations aim to give up China or even to diversify their manufacturing. This can change the trends of globalization by allocating more value added activities to the Global South.
Global Governance Implication.
In addition to the economy, BRICS+ growth can transform the international governance framework. With additional entry, the bloc may have a stronger control of UN institutions, standard-setting organizations, and digital or environmental standards. This can hasten a shift toward more of a multipolar system at the expense of a Western-centric one.
Simultaneously, the heterogeneity of the bloc might make it unable to express one vision of international governance. BRICS does not have a treaty-based form or supranational institutions in comparison with the EU or even ASEAN. It has greater strength in agenda-setting and coalition-building than rule-making.
To Western governments, the response that is appropriate is engagement in lieu of isolation, where they can find areas of cooperation with BRICS+ in common endeavours, in combating pandemics, climate change, and food security. Accepting the validity of Global South ambitions would diminish the popularity of the anti-Western discourses among the bloc.
Conclusion
The BRICS+ growth is a challenge and an opportunity. To the West it is an indication of the necessity to shift into a world where economic authority is less concentrated and other institutions can provide material alternatives. To the Global South, it is an opportunity to have a more amplified voice, more conducive economic relations and a more conducive world order.
However, BRICS+ will not turn out to be a mono-force. Its success will be determined by how it deals with internal divergences, institutional designs and the balance of its economic and political interests. Provided it can do so, it might actually move the center of gravity in global economics. Otherwise, it will be just another talk shop with big goals and few accomplishments.
Whichever the case, the emergence of BRICS+ highlights the disappearance of the simplicity of a unipolar or even bipolar world. Its expansion will have economic consequences felt both in the West and then in the South and will be a redefinition of how trade, finance and development is structured in the next few decades.
