[Insight & Opinion] Is BRICS Expansion and Currency Creation Possible?

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Bloomberg reported on the 27th of last month that China's attempt to expand BRICS at the BRICS summit, held over three days starting on the 22nd of this month in South Africa, has hit a wall. India insists on strict requirements for new BRICS members, while China favors significantly opening the doors. What does the future hold for BRICS?

South Africa, the current BRICS chair, announced that 22 countries have officially applied for membership, and about 20 more have expressed unofficial interest. However, during the preparatory meeting for this summit, India and Brazil raised objections to the membership applications of Indonesia and Saudi Arabia. Instead, India proposed prioritizing countries like Argentina and Nigeria. This is because India takes a different stance from China in terms of foreign strategy.

China wants new members to actively promote the internationalization of the yuan and participate in China's Belt and Road Initiative. On the other hand, India aims to check China's influence. China and India are still in conflict over border issues. Both countries want to strengthen their status as central nations in Eurasia.

In June, Indian Prime Minister Narendra Modi made his first state visit to the United States. Since Russia's invasion of Ukraine in February last year, the U.S. has wanted India to distance itself from Russia. However, despite U.S. pressure, India did not change its friendly relations with Russia. Ultimately, the U.S. recognized India's strategic autonomy and decided not to regard Russia as an obstacle to developing relations with India. This enhanced status of India has expanded the space for pursuing an independent foreign policy.

The situations of the other two BRICS members, South Africa and Brazil, are also complex. South Africa was reluctant to have Russian President Vladimir Putin, who was issued an arrest warrant by the International Criminal Court (ICC) in March on charges of war crimes, attend the meeting in person. If South Africa refused to arrest Putin upon his visit, Western countries might impose sanctions, which are estimated to reduce exports by up to $32.4 billion. Eventually, through coordination between South Africa and Russia, Putin decided not to attend. South Africa's awareness of Western pressure reveals the limitations of BRICS.

Meanwhile, Joaquim Jos?, former president of Brazil and newly appointed president of the New Development Bank (NDB) established by BRICS in March, declared compliance with Western sanctions against Russia. Considering such internal disagreements, there is a possibility of compromise by increasing observer or partner countries rather than immediately expanding full membership significantly, allowing full membership to only a few. Also, there seems to be little progress on the creation of a common BRICS currency.

China and India want to gradually reform the Western-centered financial system. However, the two countries differ on how to achieve this. China wants to quickly replace the dollar-centered system with the yuan or a newly created BRICS currency. But India suspects this attempt is to establish a China-centered order and prefers increasing the use of each country's currency. India is planning a more complex and longer-term plan than the path China envisions. Due to these differences in positions among China, India, Brazil, and others, the creation of a BRICS currency or rapid expansion of BRICS is unlikely to be realized soon.

Kim Dong-gi, author of 'The Power of Intellectual Geography'

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