At a special news conference during the recently concluded 15th BRICS Summit, Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates were invited and are set to become full members of the emerging-market bloc effective Jan. 1, 2024. This move has been accompanied by unprecedented mass-media coverage not only across the Global South, but also in Western countries.

In recent interviews with CSST, Yaroslav Lissovolik, founder of the BRICS+ Analytics think tank and member of the Valdai Discussion Club; William Daldegan, a professor of political science at the Federal University of Pelotas in Brazil; and Mihaela Papa, a senior fellow at the Fletcher School at Tufts University in the United States shared their views on BRICS+’s significance in regards to promoting multilateralism, convergence of its members’ agendas, and the potential for a common currency within the expanded bloc.

Significance to multilateralism

With respect to BRICS expansion, Daldegan pointed out that the six new members enhance BRICS’s representativeness. Latin America and Africa have received reinforcement, and the Middle East, previously absent from the group, is now represented by three new members. “Politically, economically, and, above all, geopolitically, BRICS expands its influence and reinforces the traditional reformist discourse of the five founding members,” Daldegan said.

Papa highlighted the importance of producing new ideas and innovations in global governance, with BRICS+ well positioned to contribute to reimagining global institutions.

According to Lissovolik, the BRICS+ platform can play a critical role in supporting multilateralism and launching a new wave of globalization in the world economy. “At this stage, the BRICS+ format appears to be more inclusive and competitive compared to Western formats in providing various pathways for economic cooperation with the Global South,” Lissovolik said.

Agenda convergence

It is estimated that following the new member enrolment, the collective territory of the BRICS countries will account for nearly 35% of the world’s total, up from 26.64%. In terms of population, the ratio to the world’s total will rise from nearly 42% to nearly 46%. According to economic data of 2022 released by the World Bank, the global proportion of the BRICS nations’ combined GDP will increase from 25.77% to 28.99% following the expansion. “As such, it has a lot of bargaining power if the countries act together, which they increasingly do,” Papa said.

Papa told CSST that her Rising Power Alliances research team has designed a BRICS convergence index to measure the convergence of BRICS states around 47 specific policies between 2009 and 2021, and found particularly strong convergence in aspects related to promoting industrial development, enhancing agricultural cooperation and food security, and cooperating on global threats posed by communicable and non-communicable diseases.

“BRICS cooperation is very broad in scope, and there are also many converging interests between the US and BRICS. While some issue areas are sensitive and may certainly result in greater tensions with the US, policy divergence from the US is not the norm,” she said.

Possibility of common currency

Apart from the issue of BRICS expansion, another powerful theme on the radar screens of observers worldwide was the possibility of progress towards a BRICS common currency. Lissovolik noted that there is a vague reference in Paragraph 45 of the summit’s Declaration: “We task our Finance Ministers and/or Central Bank Governors, as appropriate, to consider the issue of local currencies, payment instruments and platforms and report back to us by the next Summit.”

“It’s indeed an ambitious proposal, and there is a lot of enthusiasm among BRICS leaders. However, I see significant challenges in making progress in this direction,” Daldegan said. He explained that national bureaucracies tend to be very cautious when it comes to admitting instruments like this. Furthermore, the currencies of BRICS, considering only those of the founding members, are perceived differently in international markets.

Meanwhile, market observers also gauged the implications of the rising role of BRICS national currencies, in particular the Chinese yuan, for international settlements. “Only the Chinese yuan has a higher level of internationalization. It is the only BRICS currency included in the IMF’s currency basket, known as Special Drawing Rights (SDR). The other currencies carry the volatility of their national economies, are not widely internationalized, and, I believe, would struggle to internalize external variables resulting from the adoption of a common currency,” Daldegan said.