BRICS Unleashed: Shaping the World's Global Dynamics

By: Trishit Bhattacharjee

Brazil, Russia, India, China, and South Africa collectively make up the BRICS moniker. It is an association of the top five emerging markets, all of which have had recent significant growth. The BRICS nations comprise around 41% of the global population and 26.6% of the world's economy.

To encourage economic cooperation and growth, the BRICS nations have been working together. They have founded several financial organisations, such as the BRICS Development Bank and the BRICS Contingent Reserve Arrangement. In order to explore shared potential and concerns, they have furthermore conducted regular summits. The BRICS nations have become more outspoken in recent years, criticising the dominance of the United States and other Western nations in the world economy.

The 15th BRICS summit was hosted in Johannesburg, South Africa, from August 22nd to August 24th, 2023, in which they discussed and took some steps in the context of shifting geopolitical conditions and global economic trends. The theme of the 15th BRICS Summit was "BRICS and Africa: Partnership for Mutually Accelerated Growth, Sustainable Development, and Inclusive Multilateralism". Furthermore, this summit was particularly significant because it was the first gathering of BRICS leaders following COVID-19 and the Russia-Ukraine War. This would demonstrate the nation's recovery from the pandemic and Russia's future intentions, as this affects the stability and security of the world.

Vladimir Putin, the president of Russia, participated via video connection from Russia due to the possibility of imprisonment for suspected war crimes in Ukraine.

In his speech, Putin once again targeted Western powers, claiming that their "neo-liberalism" threatened both the establishment of a multi-polar world in which no one nation or bloc can be controlled and the traditional values of emerging nations. It was obvious who President Putin was referring to without using names.

During the summit, a number of significant decisions were made, one of which was the expansion of BRICS. In the run-up to the meeting, it was revealed that more than 40 countries had submitted membership applications to BRICS. As alternatives to the US-led organisations, particularly the G7, China and Russia were eager to grow the organisation. There was widespread conjecture that Brazil and India, although not opposed to growth, were wary and wanted to establish the criteria first. In the end, the BRICS opted to add six more members as of January 1, 2024. Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates are among them. Since South Africa joined the BRICS in 2010 at China's invitation, this marks the organisation's first growth.

This time around, India had a lot on the queue, as India sees BRICS as a "non-western" organisation as opposed to an "anti-western" one, underscoring the variety of viewpoints on the platform. In the leader's proclamation, India hopes to improve relations with China and Russia. To further improve collaboration in the area of space technology and research, Prime Minister Modi suggested creating a BRICS space exploration cooperative. India also wanted to have the "International Big Cat Alliance" to protect the endangered big cats that live there; they had some talks with South Africa about it, and they have decided to donate some of their big cats to India. During the meeting, Prime Minister Modi had a bilateral talk with the President of China, and both countries have committed to furthering their efforts to mitigate tensions and withdraw soldiers along the Line of Actual Control (LAC).

The de-dollarization of the region is a further step that the BRICS leaders are keen to take. The BRICS-Plus group now accounts for about 45% of global oil production capacity with the inclusion of Saudi Arabia, Iran, and the UAE. Furthermore, despite the fact that there are doubts about the future of fossil fuels, the union of four major producers, including Russia, is expected to spark a boom in the world energy market in the short term. Although it is unclear whether the alignment of interests will have an impact on decisions regarding price or production, that dynamic may, for the time being, be limited to OPEC-Plus. But it will probably show up in the currency used to bill international sales of oil and gas.

India's active involvement in the de-dollarization process has had significant economic and geopolitical consequences, influencing its position in the world currency market. Decreasing India's sensitivity to foreign shocks and improving economic stability are two of the main advantages of de-dollarization. India is attempting to create and put into place structures that can do away with the dollar and boost the INR, notably through signing agreements with other countries to settle trade in native currencies. As a result, India has lessened its reliance on the US dollar, which has historically been volatile. Indian exporters and importers now enjoy more stability because of this change in trade dynamics, which protects them from jarring currency swings that may adversely affect operations and earnings. Additionally, India now has greater independence in determining its monetary policy thanks to a lessened reliance on dollar fluctuations, which helps the country better control inflation and maintain general economic stability.

De-dollarization can be achieved by combining macroeconomic stabilisation policies with microeconomic initiatives that discourage the use of the dollar while enhancing the appeal of the local currency. A deeper domestic financial market with assets denominated in the domestic currency can reduce exposure to the US dollar, as can increased exchange rate flexibility, effective liquidity management to reduce interest rate volatility, fiscal consolidation to limit the government's dollar-denominated external debt, and so on. A start could be made by Saudi Arabia billing its oil sales to China and India (which account for 35% of Saudi Arabia's total oil sales) in yuan and rupees, respectively. This would potentially resurrect the discussion on de-dollarization, which has so far been viewed only as a theoretical idea.

In conclusion, Mr. Putin was able to represent Russia without being imprisoned due to contemporary technology. China's ambitious objective for membership growth was realised. Brazilian efforts to establish a single currency are taken seriously. India, which was seen to be attempting to strike a balance in its ties with America, and South Africa, successfully held the conference with minimal negative publicity.