The BRICS member countries finance infrastructure and sustainable development projects already have three non-member countries: Bangladesh, the United Arab Emirates and Egypt. In the upcoming meeting, Saudi Arabia, the largest economy of the Arab countries, can be considered for membership, which is keen to diversify its economy. Apart from Saudi Arabia’s proposal, BRICS should also consider membership requests from more than 20 other countries.
Two notable aspects of BRICS are worth noting. First, there is a growing demand for countries to join BRICS and access funds available in the NDB. The process of admitting new members is closely linked to geopolitical changes and the debate on de-dollarisation. Potential members such as Saudi Arabia, Turkey and Iran are increasingly reaching out to India, China and Russia for trade and energy deals while distancing themselves from the US-EU axis. This shift could weaken the US hold over emerging economies and middle powers, potentially affecting the emerging new world order based on multilateralism.
Another aspect involves the ongoing discussion about the need to introduce a BRICS currency. Although admitting new members will eventually be allowed, implementing a common currency is not straightforward. Determining the value of the currency will be a challenge, but there are ways to overcome this obstacle. The Asian Clearing Union (ACU) already serves as a “payment system” for inter-regional transactions between participating central banks, facilitating payments and promoting trade and banking relations.
ACU, along with the Special Drawing Rights (SDR) system, already serves as a payment settlement method in international trade. If the BRICS and NDB decide to transition to digital currency, it will not take long for international trade to move away from dollar parity. However, before the de-dollarization of BRICS takes place, India must secure a place in the IMF’s world basket of currencies, where the Chinese renminbi is already included. Nevertheless, China is currently not ready to replace the dollar with the yuan.
To strengthen the rupee, India needs a strong manufacturing sector and an economic engagement policy similar to the Belt and Road Initiative (BRI). The current 306 Line of Credit (LoC) projects, valued at approximately $31 billion, compared to approximately 2,631 BRI projects valued at $3.7 trillion (or possibly more than 3,000 projects worth more than $4 trillion, according to another estimate) are faded.