As global powers gear up for the BRICS Summit in Johannesburg, South Africa, tensions surrounding the proposal for a unified BRICS currency have dominated discussions.
Over 40 countries, including prominent powers like UAE, Indonesia, Egypt, Argentina, and Saudi Arabia, have shown interest in joining BRICS, with China being particularly keen on its expansion.
Yet, India has clearly indicated its reluctance toward the introduction of a new common currency, according to a Monday report from OpIndia.
In response to speculative reports in the Russian and Chinese media, India’s Minister of External Affairs, Dr. S Jaishankar, remarked in July that, “there is no plan as such for a combined BRICS currency,” asserting that monetary issues will likely remain nationally governed.
This sentiment was further echoed by Leslie Maasdorp, CFO of BRICS New Development Bank, who clarified there was “no such suggestion as of now.”
Despite the combined economic strength of BRICS, with its member nations accounting for 42% of the world’s population and 26% of its economy, the bloc has historically struggled to present a unified front against Western financial dominance.
Although BRICS did establish the New Development Bank to offer an alternative to the IMF, the idea of a joint currency is currently off the table, particularly due to India’s reservations.
Prime Minister Modi is set to attend the summit from August 22nd to 24th.
The Chinese foreign ministry has hinted at a possible bilateral meeting between PM Modi and Chinese Premier Xi Jinping, though no official announcement has been made from India.
China’s ambassador to South Africa, Chen Xiaodong, commented, “I am confident that as two nations, two countries, we will have direct talks, direct meetings. I cannot say there is tension between us, but as neighboring countries we have many common interests at the same time we have some problems.”
The significance of this prospective meeting is highlighted by the fact that their last direct interaction was during the G20 summit in 2020 in Bali.
The roots of BRICS trace back to the term ‘BRIC,’ coined by Goldman Sachs economist Jim O’Neill to represent major emerging economies.
The first formal meeting took place in Yekaterinburg, Russia, in 2009, and South Africa joined the group in 2011.
However, the alliance’s real test lies in its ability to act cohesively. There are inherent tensions, particularly between India and China, fueled by territorial disputes and recent military conflicts. India remains cautious, fearing that an enlarged BRICS may become a mere tool for China’s global ambitions, potentially sidelining India’s interests. This concern is further justified by the growing bilateral ties between India and the USA.
Brazil has expressed similar reservations about expanding BRICS, while Russia, currently facing Western isolation due to the Ukrainian conflict, seeks to bolster its international stance through the bloc.
The theme of this year’s summit is ‘BRICS in Africa: Partnership for Mutually Accelerated Growth, Sustainable Development, and Inclusive Multilateralism’. India will prioritize its security interests, emphasizing the fight against terrorism and food security.
Significantly, Russian President Vladimir Putin will be absent from the summit, given an active arrest warrant against him by the International Criminal Court. Instead, Foreign Minister Sergey Lavrov will represent Russia. This summit is notable for being the first in-person BRICS meeting post-pandemic, with 67 foreign leaders invited from Asia, Africa, and the Caribbean.
