BRICS Expansion: Is it not too early!
BRICS (Brazil, Russia, India, China, and South Africa) is indeed a relatively young organization, established in 2009. BRICS Countries Grouping evolved from an idea in 2001 by Goldman Sachs economist Jim O'Neill, who proposed it merely on the basis of economic prospects these countries have in the evolving and shifting global economic order. Its primary objective has been on economic cooperation, development, and promoting multilateralism. Being in existence for merely more than a decade, BRICS Grouping is globally seen as an alternate model of global economic governance and existing Bretton Woods’s institutions.
Accordingly, there is a growing interest among other emerging economies to join it and the list of such aspirants is becoming longer as a total of 8 countries such as Algeria, Argentina, Bahrain, Egypt, Indonesia, Iran, Saudi Arabia and the United Arab Emirates. While some of these countries indeed have a significant economic influence and regional importance, it is important to consider various factors before expanding BRICS.
Too young to expand
BRICS grouping is yet evolving as an organization and needs time to develop its institutions and governance structure. These countries themselves are in a process of ongoing evolution as they strive to establish robust governance and developmental institutions and explore associated socio-economic convergences. BRICS countries face significant differences in terms of their stage and level of economic development as on the one hand a country like China, with its sheer size of economy, is challenging existing governance models and institutions while another like South Africa is still coping with structural economic challenges. India and Brazil remain attractive economically but there comes a baggage of challenges with Russia being cut-off financially and economically.
Recognizing this diversity, BRICS member countries need to engage among themselves to foster necessary frameworks for cooperation, explore areas of mutual interest, and foster collaboration. Accordingly, BRICS countries should prioritize 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 the NDB's 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 payment settlements among BRICS countries 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 careful consideration, including 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 BRICS member states, especially on what basis the intrinsic value of such currency will be decided with. A combination of currency-commodity basket will be a great idea as it reflects the best possible intrinsic strengths of this currency for acceptance at global level, even beyond the settlement of economic and financial payment of BRICS countries.
Need of elective expansion
Given the stage of evolution and social and economic coalescing among BRICS countries at institutional, governmental and diplomatic level, there is no immediate need for expanding BRICS, and the existing member countries should prioritize economic and social cohesion among themselves. However, a selective expansion could be considered for countries that can actively contribute to the BRICS grouping without bringing political and diplomatic baggage. For instance, countries such as 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 minimizing potential challenges that could arise from the inclusion of politically complex nations. By carefully selecting new members, BRICS can ensure a smooth integration process and preserve the organization'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. For instance, China for Pakistan, Russia for Iran and Brazil for Argentina etc. Inclusion in BRICS should solely be based on the merits of a member-state and their ability to contribute to the overall 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-based criteria, BRICS can ensure that its expansion is driven by shared goals and mutual benefits rather than political considerations. This approach will help maintain the integrity and effectiveness of the organization while fostering a spirit of collaboration and equality among its members.
BRICS should prioritize efforts towards achieving economic and social convergences among its member states as of now 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 and not shy away from pursuing them.
It is crucial to recognize 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.