Policy Backgrounders

BRICS Summit—Deepening the Divide

September 01, 2023

The BRICS countries—Brazil, Russia, India, China, and South Africa—met for their fifteenth summit in Johannesburg, South Africa from August 22-24. The group accounts for 40 percent of world population and 13 percent of world GDP. The group added six new members—Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates—out of over 40 countries that expressed interest in joining. Adding the six new members, which more than doubles the size of the group, would increase the bloc’s share of nominal global GDP, weighted for purchasing power parity, to 37 percent, compared to 30 percent for the G7.

• The rise and expansion of BRICS poses a further risk of actually decoupling the West from China and the deepening division of the world into economic blocs, which would harm overall global economic growth.
• The addition of the six new members, all regional trading powers, increases the influence of this economic group, which considers itself a counterpoint to the G-7 and its agenda for the G-20 and strengthens the influence of both China and Russia in their economic and political competition with the US and its allies.
• China sees expansion of BRICS as a path to increase its influence (most bilateral trade within the bloc is with China) and to position the bloc and other Global South countries against the West and in particular against the US.
• Russia pushed for the expansion and benefits economically and geo-politically. President Putin said that “We will continue what we stared—expanding BRICS’ influence throughout the world.”
• The expansion increases the concern for the potential for the reduced use of the US dollar in international trade by members of the expanded group. President Putin said in his virtual address to the summit that “[t]he objective, irreversible process of de-dollarization of our economic ties is gaining momentum.”
• The inclusion of Iran, now the second internationally sanctioned nation to be a member of the BRICS, positions the group more antagonistically towards the US and the West and tempers the impact of Russia’s isolation as a result of sanctions, which was on display with Putin’s absence in person most likely due to the warrant for his arrest for alleged human rights violations. Iran’s membership also underscores the importance of China’s geopolitical leadership having brokered the reconciliation between Iran and Saudi Arabia. 
• The expanded group will not necessarily be more united given strong divisions among its members on some important questions and the balancing impact that India and Brazil may have. But the addition of three major oil producers, focuses attention on the question of inter-BRICS trade, in particular trade in energy, and its impact and influence on global energy supplies.