[ANALYSIS] BRICS summit between 22nd-24th August 2023 - Expansion on the agenda

Analysis details (07:30)

OVERVIEW: Leaders from Brazil, Russia, India, China and South Africa will convene for the BRICS summit taking place between August 22nd to August 24th, with the main summit day on Wednesday, August 23rd, and sideline meetings slated for Tuesday and Thursday. Russian President Putin (who has an international arrest warrant) will join the summit virtually, with the Russian Foreign Minister arriving in Johannesburg in Putin’s place. Chinese President Xi, Brazilian President Lula, and Indian PM Modi will be joining South African President Ramaphosa in person. The main theme of the summit will be the proposed expansion of the bloc.

G7 RIVAL: China will reportedly push the BRICS to become a rival to the G7. One Chinese official cited by the FT suggested the expansion of BRICS to account for a similar portion of global GPD a the G7. 

BRICS EXPANSION: It is expected that the expansion of the bloc will be under consideration at the summit, with over 40 countries expressing an interest to join. According to the 2023 Summits chair South Africa, countries include Iran, Saudi Arabia, United Arab Emirates, Argentina, Algeria, Bolivia, Indonesia, Egypt, Ethiopia, Cuba, Democratic Republic of Congo, Comoros, Gabon, and Kazakhstan. A senior Brazilian diplomat highlighted the importance of criteria being defined for the entrance of new members. 

COMMON CURRENCY: Indian Foreign Secretary on Monday said BRICS is discussing trade in national currencies and not a common currency. This sentiment was echoed by FT sources which suggested that instead of a common currency, the summit could focus on an agreement that local currencies should increasingly be used to settle trade between each other.

ANALYST VIEWS: ING ponders what a BRICS expansion would mean to the dominance of the US Dollar but conclude that they “do not see any conclusive evidence that the dollar is on the path of structural decline at this point…However, it is still facing challenges stemming from both economics and geopolitics.” The desk also warns that “Any expansion of the BRICS grouping could determine the speed with which the bloc adopts commercial and financial systems outside of the dollar sphere.”

22 Aug 2023 - 07:30- EquitiesResearch Sheet- Source: Newsquawk