It started as BRIC, then BRICS and now the acronym could get longer and longer. As things stand, it could be called BRICSEEIUS or some other variation of alphabet soup. BRICS+5 or simply BRICS+ seems to be the description that most people are using to describe the additional members to the original grouping of Brazil, Russia, India, China and South Africa (BRICS).

With the addition of the new members of Egypt, Ethiopia, Iran, the United Arab Emirates (UAE) and Saudi Arabia, BRICS+ is set to represent the Global South and could ultimately challenge the dominance of G7 and the developed Western world. When South African President Cyril Ramaphosa announced that the new countries had been invited to join, he declared “The BRICS are starting a new chapter.” For Dr Irene Mia, Senior Fellow for Latin America and Conflict, Security and Development at The International Institute for Strategic Studies (IISS), the expansion of BRICS marks a shift to “a new geopolitical order”.

Four new members officially joined in early January 2024, and Saudi Arabia was confirmed a bit later. Argentina was expected to sign up but after a general election in November 2023, the incoming president Javier Milei withdrew his country’s application. Despite this hiccup to the expansion of BRICS, however, many other countries are lining up to join. It’s likely the expansion won’t stop with the five additional members. Under the BRICS chairship of South Africa, when the expansion was first announced, South African Foreign Minister Naledi Pandor told reporters in early 2024 that 34 countries had expressed an interest in joining BRICS+.

The bloc started out informally after ‘BRIC’ was first coined by Jim O’Neill, the Chair of Goldman Sachs Asset Management to describe emerging giants, ie economies that were growing in significance to the global economy. From 2006, the countries’ foreign ministers started to meet informally on the sidelines of United Nations gatherings, and in 2009 BRICS had its first summit. In 2010, South Africa was brought into the fold, making BRIC into BRICS.

Given the assortment of countries that have now joined, there are varying views and perspectives on what the nature of BRICS+ will be, what kind of direction the grouping will take when dealing with the rest of the world, and who will be setting the agenda. For example, Colleen Cottle, the former director of Atlantic Council’s China Hub, took the view in a recent article that China’s vision is driving the expansion of BRICS+. It is noticeable, she points out, that there are no new members from Southeast Asia especially as Indonesia – given the size of its economy and diplomatic relations – would have been a prime candidate for membership. This exclusion could be explained by China’s well-documented strained relations with the region.

Rather than adding countries from Asia Pacific, the weighting of this current expansion is in favour of the Middle East – with Egypt, Iran, UAE and Saudi Arabia joining – which is “a region into which Beijing has steadily expanded its economic, military and political ties in the past few years,” Cottle writes. Other observers also comment that China is growing its power and influence and BRICS+ offers it the means to become a leader of the emerging economies and represent the Global South in its dealings with the rest of the world.

With the inclusion of new members, however, there is plenty of potential for disagreements in how the grouping should be represented. Iran is a case in point. Ehsan Khandoozi, Iran’s Minister of Finance and Economy, was reported as saying that his country’s membership of BRICS is important for attracting foreign investment. However, its inclusion could spark diplomatic difficulties for many of the other members. Mia at IISS comments, “BRICS with Iran makes it more anti-West.” Also, other commentators point out there is the potential for disputes with the other countries when it comes to their stance on the conflict in Israel, for example.

It is difficult to define what the BRICS+ grouping now has in common with so many members, all with their own voices on the major issues. Even the original BRICS members had different foreign policies and where they stand geopolitically, points out Mia. Some original members, such as Russia and China, could be described as having an anti-Western approach and see BRICS as an opportunity to challenge the dominance of the developed world. Meanwhile, India, South Africa and Brazil could be described as approaching the grouping as a way to create institutions that are more representative of the various emerging powers than the incumbent multilateral organisations. As well as the thorny issue of Iran and whether it is taking the group in a more anti-Western direction, the more moderate countries are also uneasy about the war in Ukraine; they still want to be doing business with the US and don’t want to be seen as siding with Putin. Hung Tran, a Non-resident Senior Fellow with the Atlantic Council’s GeoEconomics Centre, comments that India and Brazil are the more moderate BRICS members and are not comfortable with the inclusion of Iran and how it has strengthened the anti-US axis in the BRICS. With Russia and Iran now in BRICS+, the grouping now contains two members that are under US sanctions.

Meanwhile, China and India have strained relations and are each vying to be the voice that represents the community. Many observers comment that India won’t want to be drawn into an anti-West agenda and will be opposed to BRICS+ being dominated by China or Russia. With China said to be driving the agenda and seeking to represent the emerging economies, its domestic economy has recently experienced a number of challenges and been plagued by problems in its property sector. As China’s economic success story, and its trajectory to being the largest economy in the world is no longer being viewed as a sure thing, it does not hold the same esteem among the other member countries. Observers comment that India is also stepping in to vie for the position of representing the emerging countries. In fact, India’s Prime Minister Narendra Modi has spoken publicly about his vision for India to be the ‘voice of the Global South’ and at a summit by the same name in late 2023, he said that developing nations should come together in the face of conflict in Israel: “This is the time when the countries of the Global South should unite for the greater good,” he reportedly said.

In addition to these voices that are clamouring to be representative in BRICS+, there is also a change in direction with the inclusion of Ethiopia. Russia is currently the chair of the grouping and may seek to add more African members. The inclusion of Ethiopia signifies Russia’s interest in building relations with Africa, which is strategically important, comments IISS’s Mia. She explains that Russia has strong ties with sub-Saharan Africa, and the inclusion of more countries from the continent in the future would add to the weighting of BRICS+ being a Global South body, and would also enhance Russia’s geopolitical leverage.

The choice of new countries that could be added to the group are likely to reflect Russia’s intentions as it is the Chair for 2024 and gets to set the BRICS+ agenda. Russian President Vladimir Putin did not attend the last summit in Johannesburg, reportedly because of an international arrest warrant that has been issued in relation to war crimes in Ukraine, and will instead play host in Kazan in late October. Russia’s chairship carries the motto ‘Strengthening Mulitlateralism for Just Global Development and Security’ and Putin at the opening address for the chairship said, “In general, Russia will continue to promote all aspects of the BRICS partnership in three key areas: politics and security, economy and finance, and cultural and humanitarian contacts.” He later added: “Naturally, we will focus on enhancing foreign policy coordination among the member countries and on jointly seeking effective responses to the challenges and threats to international and regional security and stability.”

Tran comments on Russia’s chairship: “Russia will make use of this opportunity so that it is not being isolated by the West, and sanctions, to show that it has friends among the Global South. Being chair of BRICS is a very useful vehicle to get that message across,” he says. Mia at IISS agrees that being chair will be useful for Putin. “It is a good thing – you set the agenda and for Russia it gives a platform that shows it is not an international pariah.”

With the expansion of BRICS, the group now has a significant portion of Middle Eastern members. Jonathan Panikoff, also at the Atlantic Council, writes in a commentary piece that the inclusion of four Middle Eastern countries (Saudi Arabia, UAE, Egypt and Iran) represents a shift in geopolitics towards these countries and provides an opportunity for economic integration with them.

Tran points out that the original BRICS members are all large economies that are all influential in their own continent, and when combined they have a large GDP. With the addition of the new members, BRICS’ influence will increase. First the expansion means that BRICS+ will account for a larger portion of global GDP – approximately 29% – although this is still lower than the G7’s 43%, points out Tran.

Secondly, Tran tells Treasury Today Asia, the expansion increases the group’s share of global oil production, with seven of the ten BRICS+ members being oil producers. The inclusion of Iran, along with UAE and Saudi Arabia, means that the group contains several OPEC [Organisation of the Petroleum Exporting Countries] countries, and the BRICS+ now accounts for just under half the world’s oil production. Tran comments that although BRICS+ is significant for the global economy, it remains to be seen whether the members can agree on anything concrete. Is it possible that all the members won’t be able to agree on anything? IISS’s Mia says, “Yes!”

There are some commonalities, however, with what the member countries would like to see happen. One is regarding the infrastructure of the global financial system. When Putin opened Russia’s chairship, he commented on this year’s agenda and this included “enhancing the role of BRICS in the international monetary system, expanding interbank cooperation and expanding the use of national currencies in mutual trade.”

BRICS has already made moves toward improving its financial infrastructure, as Tran explains. “Many Western policymakers underestimated the importance of BRICS as nothing more than a talking shop. In my view the original BRICS established some important institutions,” Tran explains. These include the New Development Bank (NDB), a multilateral financial institution that provides local-currency development loans, which was founded in 2014. Now that the expansion of BRICS includes some richer countries, such as Saudi Arabia and UAE, they will likely make a bigger contribution to the NDB, thus increasing its impact.

Also, BRICS created a safety net for its members with a pool of reserves that can be drawn upon in times of crisis. The Contingent Reserve Arrangement (CRA) provides an alternative to the International Monetary Fund (IMF) which does not come with the same kind of conditionality with its assistance.

Tran comments that another step toward improving the financial infrastructure for the BRICS members has been the use of their own currencies for cross-border transactions instead of relying on the US dollar, for example. With a large portion of the world holding its reserves in US dollars, the monetary policy of the US ultimately impacts everyone else. By settling trade, and holding reserves in local currencies, a move towards de-dollarisation means that the countries in BRICS+ are not beholden to the US, and also its sanctions; the Renminbi could be used to pay for Russian oil, for example.

Mia explains there has already been a move towards settling bilateral trade in local currencies. However, this isn’t always a practical move; while the US dollar is used everywhere and freely exchangeable, if India pays Russia in Indian Rupees, for example, Russia may not be able to spend those Rupees elsewhere.

By using alternatives to the global correspondent banking system – which is largely based in the US dollar and subject to various sanctions – other emerging countries have attempted to build their own alternatives to make it possible to pay internationally, such as China’s Cross-Border Interbank Payment System (CIPS) and Russia’s System for Transfer of Financial Messages (SFMS).

Aside from these alternatives to the incumbent global financial system, there have also been discussions about creating a common currency for BRICS+. This idea, however, has not been taken up widely, and Tran comments that the notion of a common currency for BRICS+ members is something of a ‘day dream’ and could be described merely as the political rhetoric of some of the leaders. Also, as the experience with the euro showed, if there isn’t a common fiscal policy among the countries, it becomes difficult to manage the currency in times of crisis.

There has also been mention of creating a digital currency for the BRICS members. For example, TASS, the Russian news agency reported that a blockchain-based system would be created and quoted Yury Ushakov, an advisor to Putin, as saying: “We believe that creating an independent BRICS payment system is an important goal for the future, which would be based on state-of-the-art tools such as digital technologies and blockchain. The main thing is to make sure it is convenient for governments, common people and businesses, as well as cost-effective and free of politics.”

So far, no concrete steps have been taken in that direction. An alternative for the member states, if they wished to move towards de-dollarisation would be to use another currency such as the RMB, which China has been actively pushing to internationalise in recent years. Mia points out, however, that even though the RMB could be used as a reserve currency, it is not fully internationalised – where it can be exchanged freely with another currency – because there are still many limitations and capital controls in place.

This could, however, create problems among the member countries; instead of relying on the US dollar and being subject to US monetary policy, they would instead be reliant on China which many countries may not want to choose. India, for example, may not want China to have even greater influence or economic power over the bloc. Such issues are likely to be discussed at the summit in October, and observers will keenly await what concrete decisions come out of the BRICS+ meeting.