What the BRICS expansion means for South Africa – My Comments


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[BRICS does not amount to much. Don't stress about it. The table is at the source link below. Jan]

BRICS has just announced the inclusion of another six members which could spell good news for South Africa’s economy, even if questions over the legitimacy of the bloc remain.

During the BRICS conference in Johannesburg, it was announced that Saudi Arabia, Iran, Egypt, Argentina, Ethiopia and the United Arab Emirates will join the bloc from 1 January 2024 – marking the first expansion since South Africa’s entrance to the bloc in 2010.

One of the potential benefits of the planned expansion is to create the opportunity for BRICS nations to trade with each other in their local currencies.

This has been one of the emerging discussions among the bloc nations – and supported locally by National Treasury – and seen as preferable to something as drastic and creating a unified common currency.

While speculation was rife ahead of the summit that a common currency would be on the agenda, finance minister Enoch Godongwana has roundly shot this down, saying that it was not brought up – even informally.

However, boosting trade in local currencies could go a long way to providing a buffer against the dollar, serving this purpose anyway.

“This shift could increase the potential for using currencies other than the US dollar, particularly by creating a network of countries that enhances the utility of their respective currencies,” Karin Costa Vasquez, a non-resident senior fellow at the Center for China and Globalization, told Aljazeera.

Additionally, Iran is expected to benefit the most from the expansion. Iran and the G7 are regularly in diplomatic spats, with the US trying to isolate Iran from global trade.

Sanusha Naidu, a senior research fellow at the Institute for Global Dialogue, said that South Africa – which despite recent tensions, still has strong ties with the US – may have to deal with the potential fallout of including Iran in the bloc.

That said, she also noted that South Africa could use its position in the bloc to its advantage when dealing with the US.

“Yes, they don’t have the economic muscle to do what they want to do, but they have the strategic muscle to say ‘I have the BRICS behind me now; I have a wall of BRICS,’” she said.

Legitimacy of the new group

However, the global civil society alliance CIVICUS said the majority of the new members of BRICS have troubled histories in upholding civic freedoms and quashing democratic dissent, limiting the potential for multilateralism.

“There were already serious concerns about BRICS being a values-free alliance given the appalling human rights records of China and Russia against whom there are credible accusations of committing crimes against humanity,” Lysa John, the Secretary General of CIVICUS, said.

According to the CIVICUS Monitor, currently, all of the BRICS countries have seriously disenabling civic space conditions, meaning that civic space conditions are so poor that state and non-state actors are allowed to imprison, injure or kill people for exercising their rights.

Egypt, Iran, Saudi Arabia and the United Arab Emirates are all in the “closed” category, meaning that they routinely imprison and persecute political dissenters and civil society activists.

“BRICS countries claim to support a system of global governance that is more inclusive and egalitarian yet have mixed records in upholding civic freedoms enshrined in the international human rights framework. Respect for civic freedoms is an essential element of the rules-based international order,” CIVICUS said.

The CIVICUS Monitor – which rates countries according to five categories: open, narrowed, obstructed, repressed and closed – ratings for all the existing and new BRICS countries can be found below:

Source: https://businesstech.co.za/news/government/713530/what-the-brics-expansion-means-for-south-africa/

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