Receive free Emerging markets updates
We’ll send you a myFT Daily Digest email rounding up the latest Emerging markets news every morning.
The Brics emerging market bloc has launched the biggest expansion in its history as Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates were invited to join, in a coup for China’s drive to remake the group into a counterweight to the G7.
The countries were offered membership alongside Brazil, Russia, India, China and South Africa from the start of next year in a “new chapter” for the club of developing nations, South Africa’s president Cyril Ramaphosa said at the end of the summit of Brics leaders in Johannesburg.
“We have consensus on the first phase of this expansion process, and further phases will follow,” Ramaphosa said, adding that the Brics would also develop a “partnership model” for other countries.
The first expansion of the Brics since South Africa joined in 2010 represents a victory for China, which pushed for rapid expansion of the grouping before the summit as part of its ambitions to lead the developing world.
The inclusion of Iran and Saudi Arabia, the world’s biggest oil producer outside the US, among the first Middle Eastern Brics members also follows Beijing’s brokering of the normalisation of relations between Riyadh and Tehran this year.
“China is playing an agenda-setting role within the Brics grouping” as it competes with the US, said Priyal Singh, senior researcher at South Africa’s Institute for Security Studies. Beijing was “investing more diplomatically, economically and politically in the Brics to serve as a counterweight”.
India was more reluctant about expanding Brics, but prime minister Narendra Modi this week signalled his backing for accepting new members. The new nations include some of New Delhi’s own strategic defence partners, such as the UAE and Egypt. “Adding new members will further strengthen Brics and give it a new impetus,” Modi said.
However, not every country on the invitation list rushed to join up. Indonesia, the largest south-east Asian economy, declined to submit its interest in joining the Brics, saying it was discussing the possibility of membership internally.
Russia’s Vladimir Putin welcomed the new members and called on the bloc to deepen its economic ties, including creating a common currency. “I want to assure all my colleagues that we will continue what we started — expanding Brics’ influence in the world,” Putin said, appearing via video link from the Kremlin.
The new members will increase the Brics’ share of global gross domestic product from 32 per cent to 37 per cent on a purchasing power parity basis, Brazil’s president Luiz Inácio Lula da Silva said.
Sheikh Mohammed bin Zayed al-Nahyan, the UAE president, said: “We respect the vision of the Brics leadership and appreciate the inclusion of the UAE as a member to this important group.”
Abdel Fattah al-Sisi, Egypt’s president, said he looked forward to working with the Brics to “achieve its goals towards strengthening economic co-operation among us and raise the voice of the global south”.
Saudi foreign minister Prince Faisal bin Farhan told Saudi television that the kingdom was awaiting details on “the nature of membership and its components, and based on that and on our internal procedures, we’ll take the appropriate decision”.
Abiy Ahmed, prime minister of Ethiopia, hailed the invitation as a “great moment” for the east African nation, while Argentina’s President Alberto Fernández said joining would “strengthen” his country.
But Patricia Bullrich, the centre-right coalition’s candidate in Argentina’s upcoming presidential election, said she opposed the move because of Russia’s war in Ukraine. “We believe in an international order based on rules to preserve peace,” she said.
Recommended
Brics leaders also charged their finance ministers and central bank governors with developing measures to reduce their reliance on the US dollar in trade among their economies, reporting back next year, Ramaphosa said.
“There is a global momentum for the use of local currencies, alternative financial arrangements and alternative payments systems,” he said.
The commitment to greater use of local currencies fell short of the anti-dollar rhetoric heard before the summit, such as Brazil’s Lula floating the idea of a Brics common currency as a unit of trade.
Additional reporting by Max Seddon in Riga, Heba Saleh in Cairo, Andres Schipani in Lima, Ciara Nugent in Buenos Aires, Samer Al-Atrush in Dubai and Mercedes Ruehl in Singapore
