BRICS to admit 6 new members as bloc denies common currency plan

Chinese President Xi Jinping meets with Ethiopian Prime Minister Abiy Ahmed on the sidelines of the 15th BRICS Summit in Johannesburg, South Africa, on August 23, 2023. [Xinhua/Ding Haitao]

The five BRICS developing nations will admit six new members as the trade bloc moves to raise its clout in global trade and politics.

South African President Cyril Ramaphosa said Thursday the bloc will admit Saudi Arabia, Iran, Ethiopia, Egypt, Argentina and the United Arab Emirates, bringing to 11 member countries.

The new candidates will be formally admitted as members on January 1, 2024, increasing the number of countries from five to eleven.

"BRICS has embarked on a new chapter in its effort to build a world that is fair, a world that is just, a world that is also inclusive and prosperous," said President Ramaphosa, who is hosting a summit of BRICS leaders at a press briefing in Johannesburg.

BRICS currently comprises Brazil, Russia, India, China and South Africa. The acronym was originally coined by an economist at global investment banking, securities and investment management firm Goldman Sachs.  

“BRICS itself is a diverse group of nations. It is an equal partnership of countries that have different views but have a shared vision for a better world. As the five BRICS countries, we have reached an agreement on the guiding principles, criteria, and procedures of the BRICS expansion process, which has been in discussion for quite a while," said President Ramaphosa at the press briefing.

The South African President and his Brazilian counterpart Luiz Inacio Lula da Silva signalled the bloc could admit more countries in future.

"We have consensus on the first phase of this expansion process and other phases will follow," said President Ramaphosa.

His Chinese counterpart Xi Jinping welcomed the expansion of the trade bloc, saying it is a new starting point for BRICS cooperation.

BRICS leaders, from left: Luiz Inácio Lula da Silva, Xi Jinping, Cyril Ramaphosa, Narendra Modi and Sergey Lavrov. [BRICS/Handout/AA/picture alliance]

"It will bring new vigour to the BRICS cooperation mechanism and further strengthen the force for world peace and development,” said President Jinping.  

The expansion now means that the BRICS economic bloc will cumulatively control at least 30 per cent of the global GDP, with China leading the pack with a GDP of $19.3 trillion followed by India at $3.7 trillion, Brazil ($2.1 trillion), Russia ($2 trillion), Saudi Arabia ($1 trillion), Argentina ($0.6 trillion), United Arab Emirates ($0.4 trillion), South Africa and Egypt ($0.4 trillion), Iran ($0.36 trillion) and Ethiopia ($0.15 trillion).

This means that as of January 1, when the new membership takes effect, the bloc will have a cumulative nominal GDP OF $30.51 trillion, which gives the bloc more negotiating power, including more voting rights at the International Monetary Fund (IMF).

The bloc before the inclusion of the new members controlled at least 40 per cent of the global population, with the new members set to broaden the market.

The debate on the expansion of the trade bloc topped the agenda of the three-day summit even as member countries denied plans for a new currency to challenge the dollar as the preferred global trading currency. 

South Africa's Deputy Director General in charge of Public Diplomacy, Clayson Monyela, said the bloc has no intentions of coming up with a common currency for member states to rival the dollar.

He said the move would make the economic bloc no different from the G7 - an axis of seven of the world's richest countries comprising Canada, France, Germany, Italy, Japan, the United Kingdom and the United States - which Brics targets to counter.

“This is not on the agenda. It has not been discussed and is certainly not on the programme," Mr Monyela told The Standard on the sidelines of the three-day event.

"There is no discussion about introducing a new currency, the discussion is centred around the use of local currencies to trade among ourselves and extend that broadly to the global south countries.”