BRICS Invites Saudi Arabia, 5 Other Nations to Join Anti-Western Bloc

(L to R): Brazilian President Luiz Inacio Lula da Silva, Chinese leader Xi Jinping, South African President Cyril Ramaphosa, Indian Prime Minister Narendra Modi, and Russian Foreign Minister Sergei Lavrov raise their arms as they pose for a group photograph, at the BRICS Summit in Johannesburg, South Africa, on Aug. 23, 2023. Alet Pretorius/Pool/AFP via Getty Images

BRICS, a coalition of developing countries, has officially invited six countries to join the bloc, South African President Cyril Ramaphosa announced at the 15th annual summit in Johannesburg.

The group reached an agreement to invite Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates (UAE) to join BRICS, with membership coming into effect in January 2024.

All the invited countries had previously submitted proposals to become members.

“We value the interest of other countries in building a partnership with BRICS,” Mr. Ramaphosa said in an Aug. 24 statement. “We have tasked our foreign ministers to further develop the BRICS partner country model and a list of prospective partner countries and report by the next Summit.”

It has been reported that about 19 other nations have expressed interest in joining BRICS.

The objective behind bolstering the BRICS partnership is “to unlock infrastructure and development financing” and reform the multilateral trading system “so that we create a conducive environment for fair trade,” the South African president told a press briefing.

“This was part of the founding vision of the New Development Bank,” Mr. Ramaphosa said. “The Bank is playing a leading role in efforts to increase the resilience of the Global South and to bring fairness to global trading and financial systems by strengthening the use of BRICS currencies.”

Heading into the meeting, the New Development Bank (NDB), formerly referred to as the BRICS Development Bank, confirmed that it’s planning to issue its first rupee bond by October, one week after announcing a rand bond.

“NDB is seeking to increase its presence in the local capital markets of its member countries, to fund its robust portfolio of local currency loans,” said Vladimir Kazbekov, NDB’s chief operating officer, noting that an example would be an infrastructure project in South Africa that would be financed in the Chinese yuan and not the U.S. dollar.

Next year’s summit will take place in the Russian city of Kazan.

BRICS Influence

Russian President Vladimir Putin congratulated the new members in a video message.

“I would like to congratulate our new members, who will be working in a full-scale mode next year,” Mr. Putin said in a statement. “I would like to assure all my colleagues that we will continue the work that we have started with you today to expand the BRICS influence in the world.”

Moscow had initially opposed expanding the entity for the first time in more than a decade. However, Chinese leader Xi Jinping, who called the additions “historic,” had campaigned for growing the bloc to “unite and cooperate with developing countries.”

“It will inject new impetus into the BRICS cooperation mechanism and further strengthen the power of world peace and development,” Mr. Xi said at the summit.

Rep. Marjorie Taylor Greene (R-Ga.) wrote on X, the platform previously known as Twitter, that she’s “purely disgusted” that the Republican Party presidential candidates failed to acknowledge the “China driven BRICS.”

“Yet they were all clueless that the bigger threat to the U.S. is China driven BRICS that will tank our economy and destroy our dollar,” she said. “I’m done with America last foreign policy.”

A Paradigm Shift

BRICS, formed in 2009, presently accounts for about 40 percent of the world’s population and possesses approximately a quarter of the global gross domestic product (GDP). The coalition’s contribution to the world economy in purchasing power parity exceeded the G7 last year, reaching 32 percent, compared to the Western group’s 30 percent.

By growing the bloc of developing economies, it’s projected to represent 30 percent of global GDP, totaling roughly $30 trillion.

“We already live in a post-American and a post-Western world,” Jeffrey Sachs, a U.S. economist and public policy analyst, said in a recent interview with Die Weltwoche. “We’re in a world where the BRICS countries are larger than the G7 countries. The U.S. is a quarter of a century out of date.”

A key development coming out of the yearly meeting is the BRICS countries’ energy security, particularly for heavy importers China and India. The institution will now have the globe’s largest crude oil producers: Iran, Russia, Saudi Arabia, and the UAE.

A man, mask-clad due to the COVID-19 pandemic, walks past a damaged silo at the Saudi Aramco oil facility in Saudi Arabia's Red Sea city of Jeddah on Nov. 24, 2020. Fayez Nureldine/AFP via Getty Images

Estimates suggest that BRICS countries will now control roughly 80 percent of the world’s oil reserves. China, for example, holds nearly 1 billion barrels of crude oil, making it the world’s largest government-controlled stockpile.

Death of the Petrodollar?

This has been a decades-old system of dollars paid to oil-producing economies for their exports, with the dollar representing 80 percent of international transactions.

In recent months, a growing number of markets have made nondollar payments. Earlier this month, India and the UAE finalized a settlement in the rupee, and the two sides plan to engage in more bilateral trade settled in rupees and dirhams.

Over the past year, there had been rampant speculation that the group would devise a new basket reserve currency.

In an appearance over a video link at the start of the annual get-together, Mr. Putin purported that the concept of a common currency was a “difficult question” and something that policymakers would solve. Still, BRICS countries remain steadfast in their de-dollarization efforts as they intend to shift away from the greenback and trade in local currencies.

Ultimately, the de-dollarization process and the various strategies employed will continue to be a slow process, according to ING economists.

“Until international issuers and investors are happy to issue and hold international debt in non-dollar currencies—and the take-up of CNY Panda bonds has been very slow indeed—we suspect this will be a decade-long progression to a multi-polar world, a world in which perhaps the dollar, the euro and the renminbi become the dominant currencies in the Americas, Europe and Asia respectively,” they wrote in a research note on Aug. 24.