On January 1, 2024, BRICS expanded by admitting Egypt, Ethiopia, Iran, and the UAE. This strategic move aims to enhance the group's global standing significantly. The expansion broadens BRICS’ geopolitical influence and strengthens its financial tools, positioning it as a potential alternative to Western-dominated institutions like the World Bank and International Monetary Fund (IMF).
BRICS was initially formed by Brazil, Russia, India, and China, with South Africa joining later. Together, these nations represent over 41% of the global population and play crucial roles in the Global South. Since its inception in 2009, BRICS has emerged as a platform that challenges the Western-dominated global order by advocating for the interests of developing countries.
At the 15th BRICS Summit in Johannesburg in August 2023, the group invited six countries to join, with Egypt, Ethiopia, Iran, and the UAE officially joining on January 1, 2024. This expansion increases BRICS’ share of global GDP to 35.6%, enhancing its bargaining power on the global stage. However, internal conflicts between new and existing members could complicate consensus-based decision-making.
The New Development Bank (NDB), established in 2016, finances infrastructure and sustainable development projects in BRICS and other developing nations. With the expansion, the NDB’s capital pool and reach will increase, making it a stronger competitor to institutions like the World Bank.
BRICS Pay is an integrated payment system under development aiming to facilitate trade and transactions within member countries by bypassing the US dollar. This digital payment network could reduce dependency on Western financial systems.
Additionally, BRICS has proposed creating a foreign exchange reserve pool, known as the Contingent Reserve Arrangement (CRA), to provide liquidity support to member countries facing balance-of-payments crises. This initiative offers an alternative to the IMF’s support programs, which often come with stringent conditions.
The NDB and CRA are designed to address the gaps left by the World Bank and IMF, particularly regarding equitable financing and development aid. The expansion of BRICS strengthens these institutions, providing developing countries with alternative sources of financial assistance that are less politically influenced. The potential creation of a BRICS+ currency could further challenge the dominance of the US dollar in global trade and finance, promoting financial independence.
The expansion reflects a broader push by BRICS+ to advocate for the Global South within international forums. By including more countries from Africa, the Middle East, and Asia, BRICS+ seeks to position itself as the voice of developing nations. The group’s financial initiatives and expansion signal its intent to reshape global governance and financial systems, challenging the existing hegemony of the US and its allies.
Although BRICS+ has strengthened its economic and financial power, internal divisions among member states—ranging from regional disputes to differing foreign policy approaches—could hinder its effectiveness. Managing these conflicts while maintaining unity will be critical for BRICS+ to fully leverage its expanded influence and achieve its long-term goals.
Q1. What countries joined BRICS in 2024?
Answer: In 2024, Egypt, Ethiopia, Iran, and the UAE joined BRICS, expanding the group's global influence and membership.
Q2. What is the New Development Bank?
Answer: The New Development Bank (NDB) finances infrastructure and sustainable development projects in BRICS and other developing countries, enhancing their financial capabilities.
Q3. How does BRICS challenge the IMF and World Bank?
Answer: BRICS offers alternative financial assistance through the NDB and CRA, aiming to provide equitable financing and reduce political influence in development aid.
Q4. What is BRICS Pay?
Answer: BRICS Pay is a proposed integrated payment system designed to facilitate trade among member countries by bypassing the US dollar, promoting financial independence.
Q5. What are the main challenges facing BRICS?
Answer: Internal divisions among member states regarding regional disputes and foreign policy differences pose challenges to BRICS' effectiveness and unity.
Question 1: Which countries were admitted to BRICS on January 1, 2024?
A) Brazil, Russia, India
B) Egypt, Ethiopia, Iran, UAE
C) South Africa, China, Brazil
D) None of the above
Correct Answer: B
Question 2: What is the primary aim of the New Development Bank?
A) Military funding
B) Infrastructure and sustainable development financing
C) Political influence
D) Global trade regulations
Correct Answer: B
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