The height of the expanded BRICS’ wall (Video)

Origination: Jim O’Neill, a Goldman Sachs economist, first used the term “BRIC” in 2001 to refer to a group of rapidly developing nations that will collectively control the world economy by 2050. A cooperation of five important developing nations and rising markets known as BRICS was established on the basis of similar interests and long-standing ties to friendship and solidarity. Together, Brazil, Russia, India, China, and South Africa account for more than 42% of the world’s population, 30% of its area, 24% of its gross domestic product (GDP), and 18% of worldwide trade.

Table 1
Initial Members of BRIC in July 2006

BRICS official page mentions that three pillars of cooperation of BRICS include i. Political and Security Cooperation; ii. Financial and Economic Cooperation; and iii. Cultural and People-to-People Cooperation.

Table 2
Members of BRICS in September 2010

Heterogeneous composition of BRICS + 6
I asked Loek Hopstaken, an Amsterdam-based professor and management expert, what he would think of the expanded BRICS.

Professor Hopstaken has a serious issue with the Expanded BRICS. He says, “Expanded BRICS includes two totalitarians, anti-democratic nations (Russia and China), two nations that support suppression of minority groups based on religious/ethnic grounds (China and India), and one nation, Russia, that waged an all-out war to overthrow a democratically chosen government of a sovereign neighbor country”. Professor Hopstaken claims that Brazil is slowly recovering from a pseudo-democratic, fascistoid leadership that suppressed indigenous peoples and caused irreparable environmental damage.

From the governance point of view, he asserts that South Africa has a low position on the Corruption Perception Index of Transparency International (2022), and South Africa has a low position on the World Press Freedom Index. The Professor strongly urges that ethics in government and business are the only path to peace, human rights, freedom of press and speech, and wealth for nations and their people. They would only consider membership of any group of nations if the leadership of its members met certain standards. They also consider ASEAN and the former TPP as nation clubs that could make a positive difference in the middle and Southeast Asian region. Professor Hopstaken advises against becoming a member of a club with 3 out of its 5 members, representing 3 billion people, openly ignoring, denying their citizens freedom of speech, and fighting against improving living conditions. They encourage economic collaboration as long as it helps member countries improve their lives, not to fill the coffers of totalitarians, organized crime groups, and war mongers.

New Members and their significances
The bloc now includes six additional members: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates. Beginning on January 1, 2024, their membership will be in effect. Alexandra Sharp writes in the FOREIGN POLICY that the decision to add new members is momentous for the organization and strengthens its position as a counterweight to Western-dominated organizations like the G-7, the IMF, and the World Bank. It also paves the door for potential future growth.

Table 3
Members of BRICS+ 6Effective from January 2024

Iran joining the BRICS bloc could reduce its isolation and give it more negotiating power against the US. Iran’s abundant minerals, such as zinc and copper, could be exchanged for investment in the bloc. Securing Egypt and Ethiopia’s participation in the BRICS could reduce western influence in the region. The noninterference stance of the BRICS would also offer political cover for rights violations. Argentina, Saudi Arabia, and the UAE, Persian Gulf nations, could demonstrate that hostility towards the US is not a prerequisite for membership while counteracting western dominance in the Gulf. One thing to keep in mind is that Prince Faisal Bin Farhan, the foreign minister of Saudi Arabia, said that they are still awaiting more information on the nature and requirements for membership. They will decide what to do based on this information and in compliance with organizational policies.

Figure 1
BRICS in a glance

Speaking with Michelle Makori of Kitco News last week, Author Willem Middelkoop termed BRICS+Six as anti-west and anti-dollar alliance.

Despite criticism that the group’s admission of undemocratic nations will only advance China’s geopolitical interests, the dynamics of the new international order should not be undercut in terms of the energy market. In actuality, Saudi Arabia, the United Arab Emirates, and Iran are three of the world’s top oil exporters, together accounting for 42% of the world’s oil supply. Over time, this might have a big impact on the global energy markets.

Saudi Arabia, the world’s largest crude oil producer, is considering joining the OPEC+ economic bloc alongside China, the world’s largest oil consumer. This could create a new alliance between the two nations.

Argentina will increase the bloc’s supply of lithium. The third-largest lithium reserves are located in South America. According to an estimate made by JPMorgan in August 2022, Argentina would surpass Chile to become the world’s second-largest producer of lithium by 2027, increasing its share of the global lithium supply from 6 percent in 2021 to 16 percent by 2030. More than any other nation at the moment, Argentina has 13 lithium projects in the works. Along with China and Brazil, the accession of Argentina would give the BRICS group three of the top five lithium producers in the world.

Given that it brings together some of the fastest rising energy consumers, big oil producers, and huge holders of mineral resources, the expansion of BRICS might have significant effects on energy trade and investment.

Former Pro Vice Chancellor & Dean of Adamas University Professor Ujjwal K Chowdhury believes that with more members, the BRICS’ symbolic influence will undoubtedly increase. The group has been successful in capitalizing on the widespread opinion among members of the Global South that post-World War II international organizations are too Western. The US and other rich economies are obviously not included in this category, but it has occasionally been able to cast itself as the voice of the emerging and developing world. It has been successful in the sense that it has served as a reminder to everyone that the design of international organizations does not take into account changes in the global economy over the past 30 years.

On the hind side, Prof. Chowdhury raises issues that the decision, after all, does not appear to have been decided on any clear objective, much less economic, criteria. Why, for example, was Indonesia not asked? Why Argentina and not Mexico, or Ethiopia and not Nigeria? Bangladesh has a GDP more than Iran or UAE or Egypt, but not included. It was keen to be included. Also, the new structure is heavily tilted to the Middle East with UAE, Saudi and Iran included. It seems political considerations of balancing Saudi with Iran, Egypt and Ethiopia with South Africa are there. Nigeria and Kenya are bigger economies than Ethiopia. In fact, Nigeria has surpassed even South Africa.

De-dollarization?
It appears that de-dollarization is a key objective for BRICS at the moment, and China is trying to make it its sphere of influence as well.

When it comes to de-dollarization, the majority of nations have chosen to favor trading in their domestic currency. Real, Ruble, Rupee, Renminbi, and Rand are the first letters of the five currencies used by the BRICS countries, according to the founding member countries. Next, they proposed giving the new currency the moniker R5. It hasn’t been decided on yet, though. It will be challenging to establish a distinct currency for the BRICS countries in the near future, despite the fact that they had planned to bring their own, given the complicated internal and external situations of the countries. The currency war is imminent, according to one analyst.

Is it End of the Petrodollar deal?
The term “petrodollar” refers to the US dollar that is supplied to the nation that exports oil for international trade. It traces back to a US-Saudi Arabia agreement from the 1970s, when the US provided Saudi Arabia with weapons support and Saudi Arabia started trading its crude oil in US dollars.

The Petrodollar deal had already been completed, Willem Middelkoop clarified. A few nations have been noted to begin selling in Euros. Saudi Arabia has been observed trading oil for Chinese Yuan with China. The agreement for the purchase of oil between Russia and India was in Rupees. This demonstrates the beginning of international trade’s shift away from the dollar.

The latest data according to Willem Middelkopp suggests that 5% of the global trade being conducted in the Chinese currency. A few years ago, it was just 1%. The dollar dominance in international trade is still apparent with 90%. But it will be a great threat for the US and western countries. BRICS considered being a potential powerful alliance which they are starting to build. One important thing to be remembered that there are about 140 countries that did not join the western sanction against Russia. The total population of these countries is over 6 billion.

Independent nations that were interested in joining the BRICS coalitions appeared to be tired of the hypocrisy and double standards of the West, as well as its exploitation of Latin America and Africa according to Willem Middelkoop.

Middle-east Centric and Anti-US Bloc?
According to Pradhumna Bikram Shah, the former ambassador of Nepal to Brazil, BRICS’ expansion after 13 years appears to have a highly promising and ambitious future. The ITAIPU Hydropower Project of Brazil, which has consistently produced 14,000 MW throughout the year, is praised by Ambassador Shah as an illustration of the enormous hydropower potential of that country. Brazil actually has a hydropower potential of more than 100,000 MW. Additionally, it has just come to light that the Brazilian region of TUPI has enormous oil potential. It is unreasonable to claim that the bloc is primarily focused on the Middle East given the enormous oil potential of Brazil and Russia, according to Ambassador Shah.

Some analysts claim that expanded BRICS or BRICS+ 6 is an anti-American club. Ambassador Shah out rightly rejects this claim further  adding, out of a total of eleven nations, he discloses that almost seven (Brazil, India, South Africa, Saudi Arabia, Argentina, Egypt, and the United Arab Emirates) have positive relations with the USA.

Agitation between two giants of BRICS and Bilateral trade
Two influential countries of BRICS: India and China do not have smooth relation these days. They have border disputes. From a regional viewpoint, Nepal will be impacted in some way by the direction of India and China’s relations. People in India and Nepal have taken offence at the most recent map that China produced. Balen Shah, Mayor of Kathmandu Metropolitan, had intended to travel to China on August 31, 2023, but that trip has been cancelled. Mayor Balen made the decision not to visit China because the new map of Nepal, which was supposed to contain Kalapani, Lipulekh, and Limpiyadhura, was not included in the version made public by the Chinese government.

It has been reported that India and China have decided to end their border disputes at a recent sideline meeting in Johannesburg. Instead, they keep putting trade front and centre.

According to one expert, India and China will benefit commercially from the construction of the railway in Nepal, whether it runs from Raxaul to Kathmandu or from Kerung to Kathmandu. Railway connectivity between India and China via Nepal will be a game changer for these large countries as this route will cut the almost 7,000 km distance of the current marine route that India and China use. Nepal will gain from the transit economy as well.

According to figures issued by the Chinese customs, trade between India and China reached an all-time high of USD 135.98 billion in 2022, while New Delhi’s trade imbalance with Beijing crossed the USD 100 billion threshold for the first time despite tense diplomatic relations.

Conclusion
The fact that one-fourth of all nations in the world submitted an application to join the BRICS is unexpected. It appears that the current composition is heterogeneous. The 11 nations, which have a combined population of around 3.7 billion, include Saudi Arabia and Iran, two longtime rivals, as well as five democracies, three totalitarian regimes, two autocratic monarchies, and a theocracy. Its smart moves for BRICS members include their support for economic cooperation as long as it raises living standards rather than benefitting totalitarian regimes, organized crime networks, and pro-war campaigners.

In conversation with the Forbes Featured Professor and writer Dr. Ted Sun, who would like to be called ”A Global  Villager” at Transcontinental University USA, he said to me,  “Humanity needs to be united and work together as one species. The continued battle over power and control moves us in the opposite direction.” Prof. Sun further revealed, “In the short run, BRICS has the potential to make some systemic changes. For many, it’ll force people to choose and make it more complex. In the long run, our global village needs a single currency that doesn’t favor one nation or a group.” Prof. Sun concluded, “Basically, too many governments’ authorities (not being leaders by definition) are working in scarcity, fighting for power and control, rather than seeing globalization as a system which could benefit and sustain humanity.” Let the Expanded BRICS benefit from this wisdom. Most importantly, their sincerity and dedication to world peace and prosperity will serve as a measuring device for whether or not the BRICS wall is built or broken.