BRICS Meet in Johannesburg

Today sees the start of the 15th meeting of the BRICS as the world watches in anticipation over whether the group will seek to expand. Presently, Brazil, Russia, China, India and South Africa – which collectively make up around half of the world’s population and a quarter of the world’s output – comprise the BRICS, though its possible expansion has been a hot topic of conversation recently. Given the ICC’s arrest warrant for the Russian President, Vladimir Putin will be unable to attend the summit in person with his place being filled by Sergei Lavrov.

At the turn of the millennium, all countries were considered either emerging or actual powers, with Goldman Sachs’ Jim O’Neill arguing that they would dominate the global economy by 2050. While the group was merely an academic reference point for most of the noughties, by 2009 Brazil, India, China and Russia had established themselves as an organised geo-political bloc with multilateral summits subsequently taking place. Now, some 40 countries have expressed interest in joining the bloc, and as such its possible expansion will be a topic of focus over the next two days.

Analysts are also looking to see whether the bloc will provide any further insight into future plans for the New Development Bank – or ‘BRICS bank’. The bank was established in 2014 and seeks to increase funding and settlements in local currencies, thus moving away from the USD. Given that much of these countries’ debt is denominated in USD, financing loan repayments has become a more costly exercise in light of the dollar strength recently seen. Indeed, according to Reuters “the NDB is also expanding, and the summit could become a key platform to attract more member countries. Bangladesh, the United Arab Emirates and Egypt have joined the bank since 2021. Uruguay is part way through the process of joining, while Algeria, Honduras, Zimbabwe and Saudi Arabia have expressed interest.” Hence, markets will be keeping an eye on any announcement relating to the NDB as people around the world consider any changes to the geopolitical landscape.