The Significance of the BRICS Summit 2023

 

The Leaders of BRICS Nations
Image Credit: Google

Adil Javed

The BRICS Summit 2023 is a significant event that will have a major impact on the global political and economic landscape.

The summit is being held in South Africa from 22-24 August 2023, and it will be attended by the leaders of Brazil, Russia, India, China, and South Africa. This year, South Africa held the BRICS Summit Chair.

It is marked as the 15^th Summit of BRICS. Number of states are also invited by South Africa to attend the event.

The summit is likely to focus on a number of key issues, including the war in Ukraine, the global economic slowdown, and climate change.

The leaders will also discuss ways to strengthen cooperation between BRICS members and to promote their collective interests in the global arena.

Here are some of the potential significances of the BRICS Summit 2023:

For BRICS members:

The summit presented a chance for BRICS members to strengthen their economic and political cooperation.

This could help them facing the current global economic challenges and to play a more prominent role in the changing global order.

The changing global order brings itself with multiples challenges. This involves climate change, new technologies, innovation in education and research as well as some political and security challenges.

Climate change is threating the world with heatwaves, global warming, unwanted floods and loss of biodiversity, impacting the overall global economy and environment of the world.

New technologies will create a new balance of power as Artificial Intelligence has shocked the world with it remarkable attributes and threats emanating from this.

New ways in Education, Research and Innovation are introduced to understand the challenges and cope with them.

The BRICS members together can confront and neutralize these challenges and extract opportunities out of them. Majority of them are kept on the agenda of BRICS.

Lastly, the BRICS Summit 2023 is also likely to be a major test for the unity of the BRICS bloc. The members have different interests and priorities, and they may not always be able to agree on common positions.

The summit will be a chance for the leaders to show that they can overcome their differences and work together to address the challenges facing the global community.

For New Members:

BRICS expansion has become talk of the day. The summit could provide an opportunity for new members to be formally inducted into the BRICS grouping.

This would give them access to the benefits of BRICS membership, such as increased trade and investment, less dependence on dollar, financial cooperation, and political support.

According to chair of BRICS Summit 2023, over 40 countries, including Argentina, Algeria, Bolivia, Cuba, Comoros, Democratic Republic of Cuba, Egypt, Ethiopia, Gabon, Indonesia, Iran, Kazakhstan, Saudi Arabia, and United Arab Emirates have expressed interest in joining the forum, as reported by Reuters.

According to Reuters, they view BRICS as an alternative to global bodies viewed as dominated by the traditional Western powers and hope membership will unlock benefits including development finance, and increased trade and investment.

Dissatisfaction with the global order among developing nations was exacerbated by the COVID-19 pandemic when life-saving vaccines were hoarded by the rich countries. Similarly, in the aftermath of Ukraine war, numerous countries have realized this when sanctions levelled against Russia affecting many countries.

In addition, Iran, that is home to around a quarter of the Middle East's oil reserves, has expressed its hope for the mechanism of new membership that it would be decided "at the earliest."

Furthermore, oil heavyweight Saudi Arabia was among more than a dozen countries that has also participated in "Friends of BRICS" talks in Cape Town in June. It has received backing from Russia and Brazil to join the BRICS.

Argentina, which is Latin American country, said in July 2022 that it had received China's formal support in its bid to join the group.

Ethiopia is one of Africa's fastest-growing economies. It said in the June that it had asked to join the bloc, with an ambition that the country will continue to work with international institutions that can protect its interests, Reuters quoted its foreign ministry.

Bolivian President Luis Arce expressed interest in BRICS membership. Its government said in July that it was determined to curb dependence on the U.S. dollar for foreign trade, instead turning to the Chinese yuan, in line with BRICS leaders' stated aim to reduce dependence on the U.S. currency, reported the Reuters.

Algeria said in July it has applied for BRICS membership and to become a shareholder in the New Development Bank, the so-called BRICS Bank.

The North African nation is rich in oil and gas resources and is seeking to diversify its economy and strengthen partnership with China and other countries.

For the Global South:

The summit could be a forum for the global south to discuss common challenges and interests. This could help to strengthen cooperation between developing countries and to promote their collective voice in the global arena.

The countries in the global south are seeking BRICS from the past few years as the ray of hope to help them boost their economies, political support, and technological advancement.

This is also because Russian and Chinese increasing influence in the Global South.

The summit is also significant in the context that it will extend membership to some countries of the Global South while many will attend the event.

For a New Currency:

The ongoing debate of De-dollarization has put the world in thought of alternative ways. The summit could be a forum for BRICS members to discuss the potential for a new currency. This could help to reduce their reliance on the US dollar and to give them more control over their own economies.

According to Swaran Singh, Professor at Jawaharlal Nehru University, said that the use of the US dollar has become increasingly politicized in recent years. The US has used its financial power to impose sanctions on countries that it does not agree with, such as Iran and Russia. This has made it difficult for these countries to conduct trade and finance.

The SWIFT system is a messaging system that is used by banks to communicate with each other. The US has the power to exclude countries from the SWIFT system, which can have a devastating impact on their economies.

For example, when the US excluded Iran from SWIFT in 2012, it caused the Iranian economy to contract by 6%.

Singh argued that the use of local currencies and the creation of a BRICS currency would help to reduce the power of the US dollar and to give countries more options. This would make it more difficult for the US to use its financial power to coerce other countries.

Singh's statement is significant because it reflects the growing concerns of many countries about the use of the US dollar. The BRICS countries are a major economic bloc, and their decision to explore the use of local currencies and to potentially launch a BRICS currency could have a significant impact on the global financial system.

For the Global Economy:

The summit could have a significant impact on the global economy. If BRICS members can agree on a new currency, this could have a major impact on the global financial system. It could also lead to increased trade and investment between BRICS members.

In addition to these general points, the significance of the BRICS Summit 2023 will also be shaped by the specific circumstances of the time.

For example, the war in Ukraine is likely to be a major topic of discussion at the summit, and the leaders will need to decide how to respond to the crisis.

The global economic slowdown is another major issue that is likely to be on the agenda, and the leaders will need to find ways to boost growth and promote economic stability.

Overall, the BRICS Summit 2023 is a significant event that could have a major impact on the global political and economic landscape. The decisions made by the leaders at the summit could have far-reaching implications for the global south, BRICS members, the new currency, and the global economy.

For South Africa:

The BRICS Summit 2023 is also likely to be a significant event for South Africa. The country is hosting the summit for the first time, and it will be an opportunity for South Africa to showcase its economic and political achievements. 

The summit is also likely to boost tourism and investment in South Africa.

The writer teaches at Higher Education Department and has done MS in Politics and International Relations