BRICS Foreign Ministers meeting: expansion and payment systems on the agenda

The meeting of BRICS Foreign Ministers in Nizhny Novgorod, Russia, took place on June 10-11, 2024 and featured a number of priorities, of which two of the most important were BRICS expansion and new payment systems. Compared to earlier such meetings the economic agenda appears to have become more important, though some of the key themes of BRICS cooperation such as trade liberalization and the reform of BRICS Contingent Reserve Arrangement (BRICS CRA) did not feature prominently in the public statements of the meeting’s participants. The focus on the economic side appears to be directed at boosting settlements among BRICS members in national currencies along with exploring further venues for expanding membership and mutual trade among the economies of the Global South.

On the financial front, discussions centered on creating new mechanisms for conducting settlements across BRICS members. According to Russia’s Finance Minister Anton Siluanov, at the BRICS meeting of Foreign Ministers Russia presented a new payment platform called BRICS Bridge that may be used for trans-border payments. The operation of the payment system is based on the use of BRICS countries’ digital financial assets that are pegged to the values of the respective national currencies of BRICS economies. The creation of the payment platform is not directed at creating a new single BRICS currency, but rather aims to streamline and facilitate financial settlements across BRICS members. At this stage the concept of the BRICS Bridge system is still in the discussion stage and there is no visibility on the scale of participation that is likely to follow from BRICS members. The technical details of the platform may be discussed in the coming months by the respective economic agencies and ministries of BRICS countries along with other possible instruments to be employed in facilitating mutual financial settlements.

As regards BRICS expansion plans, the most likely outcome of the discussions this year is the creation of a “partnership belt” that is to participate in the key meetings of BRICS economies. The modalities of this new framework of partnership within the BRICS circle are likely to be revealed during the BRICS summit in Kazan later this year. The question at this stage is whether any new members are going to appear in the BRICS core in the course by the end of 2024 – thus far it seems that the appetite for further expansion in BRICS core membership has declined. There may be exceptions made for some of the largest applicants from the Global South, however, most notably with respect to such economies as Thailand and Turkey – representatives of both economies participated in the meetings in Nizhny Novgorod.

Thailand has in fact reiterated its willingness to join the BRICS bloc during the discussions held in Nizhny Novgorod after the Southeast Asian economy officially had declared its intention to accede to BRICS two weeks ago. After Indonesia, the largest economy in ASEAN, opted to stay out of BRICS last year, Thailand as the second largest economy in this regional bloc could open the path to a more intensive economic dialogue between ASEAN and BRICS. Expanding BRICS core membership to include Thailand could also increase the chances of Indonesia moving more quickly towards building closer ties with BRICS economies.

Another heavyweight candidate that has expressed its interest in joining the BRICS bloc recently is Turkey – the country has already explored options of joining BRICS back in 2018 during the BRICS+ meetings in South Africa. Given the BRICS expansionary momentum that started last year, Turkey’s chances of making it into the BRICS core have improved, particularly as a whole group of new members from the Middle East have joined the bloc starting from this year. At this stage, our baseline scenario is for all new BRICS partners to be included into the “partnership belt”, including Turkey and Thailand. In our view, the new BRICS core needs time and a wider array of economic instruments to accommodate a substantial increase in core membership that has taken place in 2023-2024. With a host of new members in need of financial assistance/support, the BRICS need to boost the resources of the New Development Bank and the BRICS CRA as well as possibly create new mechanisms and facilities to support its existing members before again moving to expand the bloc’s core.

Yaroslav Lissovolik, Founder, BRICS+ Analytics

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