Expansion of BRICS+ and G20 : The Future of Global Governance

For the first time, the BRICS+ summit will take place on October 22 to 24 in Kazan, Tatarstan, under the hosting of Russian President Vladimir Putin. During this event, the five new members-Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE-will be formally welcomed into what was previously known as BRICS, made up of Brazil, Russia, India, China, and South Africa. Equally, Putin has invited over twenty other countries to this expanded collective, a number of them having requested or contemplating membership. The message is clear: Russia has an impressive alliance system worldwide, not the isolated country the West would wish to see it as.

For some in the West, BRICS+ reflects a profoundly worrying trend: a world cleaving into hostile blocs as geopolitics between East and West heat up and fissures between the Global North and South widen. From that perspective, Beijing and Moscow seek to turn discontent across part of the world against the U.S. and its rich partners into a balancing bloc to the G7 that might weaken cohesion in international forums. The G20 is a source of growing global disgruntlement, with worries especially about the imminent BRICS expansion. It is where these divides are exacerbated that the main focus of the G20 is undermined: a group to bridge gaps and capitalize on the strengths of key nations that do not naturally or ideologically align.

These are valid risks but need to be set in their proper context. The emergence of BRICS reflects an increasingly disgruntled world and the attempt to wrest for developing market democracies many of the structural privileges that still accrue to them in a global system of Western design. BRICS came into being so as to achieve that-a task of whittling down such embedded privileges through, among other things, the establishment of alternative institutions. Yet diversity in this expanding coalition-and the desire of key middle powers to preserve diplomatic flexibility within the G20 and other collective formats-means rigid, Cold War-type alignments are unlikely to emerge.

BRICS+ is thus likely to have a cautious and incremental influence rather than overtly challenging the existing global order. It would give the rising and middle-power countries a means through which to pursue what are often their shared goals and a way to “adapt”-what the French call “modify”-the rules and institutions of the multilateral system. The United States and its Western partners could be more certain of such a benign outcome if they refrained from provoking fears and disputes, and instead started taking serious steps toward addressing those legitimate concerns and realistic ambitions of the rising powers.

BRICS, G7 and G20: Competitive Small Clubs

The rise of BRICS, and now BRICS+, shows a common belief of influential developing countries that the Western-led, rule-based global economic order is at odds with their interests and largely out of date. Ironically, the term BRIC originally coined by financial analyst Jim O’Neill of Goldman Sachs. In fact, the renowned investor O’Neill forecast in 2001 that Brazil, Russia, India, and China had the potential to become the economic locomotives of the world during the course of the next ten years. His forecast was largely correct: from 2000 through 2011, the BRICS’ share of global output leaped from 8 to 19%, partly on the back of the commodity boom.

BRIC countries held their first leaders’ summit in Yekaterinburg, Russia in June 2009 to make the Wall Street term a tangible reality. That meeting, coming just a few months after the global financial crisis that had started in the United States and engulfed other Western countries, was symbolic of the fact that a new economic order would be led by the developing world. South Africa joined the group a year later to form BRICS.

The BRICS grouping from its inception was conceptualized as a geopolitical and geoeconomic counterweight to the West, which through its selected club of friends had dominated the world economy for decades. Western initiatives started in 1975, in the aftermath of the Arab oil embargo and global economic crisis, when the heads of the US, Japan, West Germany, the UK, France, and Italy came together at the Rambouillet castle in France. Canada joined in 1976, making it the G7 as a regular forum for macroeconomic cooperation, meeting each year for summits. In 1977, representatives of the European Economic Community started to participate in the group, now represented by the European Union. In 1997, the G7 invited Russia for the last time in order to bolster President Boris Yeltsin’s reformist presidency. This was an important expansion of the G8, not least in light of subsequent events in Russia’s slide toward authoritarianism. The G7/G8 has, over time, expanded its remit from finance ministers and central bankers into a host of issues including weapons of mass destruction, debt relief, global health security and climate change.

The financial crisis of 2007-2008 marked a tipping point for both the G8 and the BRICS. This was unlike previous crises, which had occurred in Latin America during the 1980s and later in Asia at the end of the 1990s: the epicentre of this crisis lay on Wall Street, the heart of global capitalism, and could not be corrected within Western conference rooms alone. Saving the world economy would need the financial heft and collective action of all major economies, including China. In recognition of the new reality, the administration of George W. Bush called a summit for the first time of G20 leaders in November 2008. First it was only an informal grouping of finance ministers and central bankers established in 1999. For many observers, the emergence of the G20 seemed to be a moment of turning point of global governance, marked with a new era developing and advanced economies leading together over the world economy. This larger group comprises two-thirds of the world’s population and more than 80 percent of global trade and GDP and is thus more economically powerful and representative than the G8 on its own.

But given the crisis, the G20’s injection of an unprecedented dose of liquidity to spur global demand, its strengthening of the International Monetary Fund and World Bank, and its creation of the Financial Stability Board as a new element of the Bretton Woods structure – all these were done remarkably well. The rescues were far from perfect, but they steadied the global economy. The third G20 summit, held in Pittsburgh in September 2009, brought together heads of states and governments who proclaimed the G20 “the premier forum for our international economic cooperation”.

With this background, many did expect the G8 to drift into irrelevance very shortly, which again did not happen for some reasons. While the G20 proved effective in crisis management, it found it hard to mature into a long-term leadership formation for the world economy simply because its membership was too large and unwieldy. What’s more, the rise of the G20 disappointed the governments of emerging economies because it did not introduce the far-reaching changes they had expected in global economic governance-first and foremost, those concerning the U.S. dollar’s status as the main reserve currency and the dominance of the West in international financial organizations.

Thirdly, growing geopolitical tensions between China, Russia and the West made concerted action via the G20 more difficult. In 2014, Russia’s behavior over Crimea and eastern Ukraine led the Western members to exclude it formally from the G8. This showed that it was not fully in alignment with the others. In January 2017, Moscow announced that it would withdraw permanently. Excluding Russia further cemented the strategic relevance of the G7 as a group of consolidated advanced market democracies willing to enforce international law. There are new proposals to expand the G7 in Washington by including Australia and South Korea, together with the European Union, to form the D10 or “Group of Ten Democracies.”

BRICS’ Track Record to Date

Indeed, during the past decade and a half, along with the rise and fall of the G7, G8, and G20 in authority, the BRICS have expanded to challenge the West’s supremacy in global governance through demands for reforms, creating new institutions that would compete with the existing ones, challenging the dollar, and seeking to erode US authority over the key global economic decisions. Different attempts have produced very different results, ranging from a BRICS achieving more in terms of symbolism rather than impact. The establishment of the NDB and CRA in 2015 against the World Bank and the IMF was very limited in both cases.

The NDB is still vastly under-capitalized, despite the inclusion of additional shareholders from non-BRICS members, and has so far disbursed roughly a third of what the World Bank committed globally in 2021 over the past decade. As much as the BRICS preach equality, the NDB retains the weighted voting mechanism of its Bretton Woods siblings. Meanwhile, the CRA is a self-insurance instrument that deals with any temporary balance-of-payments problems: the members invest cash in CRA and have limited resources when one faces a liquidity crisis.

While these are laudable goals, there have not been the expected achievements in ways to institute a global reserve currency which would reduce dependence on and perhaps eventually replace the U.S. dollar. Last year’s summit saw BRICS nations agree to pursue the option of a single currency, but ambitions to shake off dollar reliance are ultimately circumscribed by its preeminent position in worldwide transactions, currency markets, and debt ratings.

The underdevelopment of a support structure in the area of finance that will take care of the non-dollar inter-BRICS central banks’ transactions is compounded by the existing limited convertibility of the Chinese yuan. Accordingly, the BRICS countries have shifted focus to the approach that advances trade and investment based on domestic currencies, as well as diversifying their reserves across various currencies.

The BRICS have aimed to undermine the position of the United States and its allies to weaponize interdependence, in particular due to US control of critical nodes in international finance. As an illustration, China, Russia, India, and Brazil have created independent payment systems parallel to that of SWIFT. However, in various regions worldwide, BRICS initiatives to reshape international infrastructure have been underperforming compared to expectations. Another actual example is the promise by the group in 2012 to build a new global network of undersea cables in order to connect their communications and battle Western and American spying-something that has yet to take shape.

Like the G7 and G20, BRICS has spawned a slew of initiatives and partnerships in energy, health, and sustainable development, to name just a few areas. The network is far-reaching, increasingly linked together, and representative of Global South cooperation. Yet, at the same time, political, strategic, and economic diversity has undermined the BRICS grouping, as geopolitical rivalries have made the latter less cohesive and less diplomatically influential.

Starting with the political differences, BRICS comprises three strong but imperfect democracies and two powerful authoritarian regimes that are becoming increasingly repressive. There is indeed a shared disgruntlement with imbalances in the global system, but it would be wrong to overlook the differences related to governance and political principles on issues that range from human rights to geopolitical ones. The strategic trajectories of the BRICS countries are also not in a similar direction. While Brazil, India, and South Africa also refused, under U.S. pressure, to support Ukraine against Russian aggression, they also criticized U.S. policy on the Gaza conflict.

Yet, they have been shying away from full political support for Beijing and Moscow against the West, rather trying to preserve their independence without cutting ties. This stance is most overt in India, where BRICS is seen as just one of many instruments in its multilateral approach. The differences in economic standings of these five countries within BRICS are colossal. It is dominantly led by China within the coalition, holding nearly 70% of the overall GDP of the coalition. It therefore puts the other four countries in a very vital position, whereby their individual relationship with China becomes very significant. The income levels vary a great deal as well-for example, India’s per capita GDP of $2,389 compares to less than one-fifth of China’s $12,720 and less than one-sixth of Russia’s $15,345.

It gets even more complex because China and India-1.4 billion people each-are competing vociferously geopolitically in Asia, indeed, now worldwide. The two countries now are confronting each other in a regional standoff in the Himalayas, contesting for strategic gains in the Indian Ocean, and holding debates over which nation is most apt to lead the Global South. India is also part of the Quad, a strategic alliance with the US, Japan, and Australia focused, above all, on the containment of China’s influence in the Indo-Pacific. If one digs deeper, political differences within BRICS as a whole become more apparent. Take, for instance, the long-standing UN Security Council reform issue: while all five BRICS countries favor expansion, they differ significantly on specifics. China and Russia remain opposed to any increase in permanent membership, while India, Brazil, and South Africa work hard for that outcome.

As one might anticipate, BRICS leaders prefer not to emphasize these deep-seated divergences. This was particularly clear at the September 2023 summit in Durban, where South African President Cyril Ramaphosa went through hoops to try to balance diversity and unity. He announced BRICS is a partnership of equals, diverse perspectives yet common visions of a better world. But events unfolding in Durban brought BRICS out as a very unequal partnership, with China seizing the driving seat at every instance. Ahead of the summit, officials from Brazil, India and South Africa voiced misgivings about the rapid pace and far-flung scope of BRICS’ expansion, including the group’s invitation to anti-Western Iran. Eventually, it means nothing in opposition from his colleagues, because President Xi Jinping rammed his own growth plan down their throats-as well as down the throats of BRICS’ consensus decision-making process so well-documented. Examples like this show that BRICS is not as cohesive as some of its proponents believe it to be.

BRICS+ and the Consequences of Growth

The West grew concerned about the prospects for rising global fragmentation with the news in 2023 that the BRICS alliance was about to let five new members in, and many more are still on the waiting list. These fears are understandable, but perhaps exaggerated. This growth may simply add diversity to the grouping-and its potential for controversy. BRICS+ might, therefore, be an influential economic grouping, bringing under its umbrella half of the world’s population, 40 percent of global trade, and 40 percent of crude oil production and exports. This would have allowed the coalition, accordingly, to promote a more equitable world order and strive for objectives such as establishing parallel structures of energy trade, expanding trade exchange among the members, searching for alternative sources for development finance, reducing dependence on the dollar in international settlements, or intensifying technological cooperation in areas that include everything from artificial intelligence to space research. We believe that BRICS+ is likely to explore opportunities in each of these areas.

Yet, their growing diversity may make it hard-even at international platforms like the G20-for BRICS+ to move toward consistent political positions. BRICS has been more effective in signaling its disapproval of the sustained Western dominance of global governance structures than in putting together a consistent program thus far. Developing one clear, positive program for reforming global systems and for furthering international cooperation might become increasingly unwieldy for the network of more and more countries with sharply different political regimes, economic structures, cultural identities, and national agendas. Early expansion to include BRICS+ would also dilute any potential representational function of BRICS as the Global South, and thus weaken its international impact.

Small Group Comparison

One theme that arises regularly at BRICS summits and their declarations is the grouping’s aspiration to represent the global majority-the large part of the world’s denizens in post-colonial countries that have always been excluded from any processes of global decision-making. And this idea has been predictably repeatedly foregrounded by the Kremlin during the Russian BRICS presidency in 2024.

The interests of the more prosperous members of this coalition may or may not coincide with those of the poorer members of G77 and NAM, two ally organizations with 134 and 120 member countries respectively. The first phase of BRICS+ would include, besides two richer nations like Saudi Arabia and the UAE, one poor country represented by Ethiopia and two countries with a little higher income as represented by Egypt and Iran. The large oil and gas producers and exporters would be Saudi Arabia, UAE, Iran, and Russia, while most of the countries of the Global South-like China and India-are net importers. This trend can be part of the friction leading to clean energy transitions, but it’s also causing some friction on a lot of other issues. No forum for ensuring that the needs and interests of the poorest and most vulnerable countries worldwide are represented is stronger than the United Nations General Assembly, where every country has an equal vote.

The original five BRICS countries, with the partial exception of South Africa, tend to differentiate themselves from most other countries of the developing world by virtue of their current or aspiring prominence: China is the world’s largest economy; Russia, a nuclear superpower; India, the most populous country; and Brazil, a regional power house with global ambitions. These countries represent major geopolitical and economic actors, competing for influence and trade in the Global South comprised of Latin America, Africa, the Middle East, and Asia. Competition within the BRICS countries will only continue to grow as Saudi Arabia and Iran join, even as China works to mend their relationship. See Table 1 for comparison of BRICS+, G20, G7, G77, and OECD membership.

Influence on the G20

One question is what influence BRICS+ will have on the functioning of the G20, which is due to hold a summit in Rio de Janeiro on November 18-19 during Brazil’s presidency. Since the G20 was elevated to an important international platform in 2008, the general appreciation one heard was that its loose structure allows countries to forge consensus-based alliances that can evolve over time and are not held down by rigid blocs. Such a configuration allows members, despite their differences, to reach out to each other and collaborate on shared interests, irrespective of conflicting governance systems or issues. Maintaining this balance, however, depends on the predisposition of the members to cooperate on common challenges and to competitively battle in other areas. This balancing act has become increasingly complex and is reflected in the combative G20 diplomacy during and after COVID-19 and most recently in responding to the impact of the Russian invasion of Ukraine and turmoil in Gaza. It is a forum that too often degenerates into an accusatory playing field between East and West, North and South, rather than a space for group collaboration.

Adding BRICS might amplify these dynamics by splitting the G20 across the axis of the G7 versus BRICS+ divide. Consider that between 2000 and today, for example, the G7’s share of global GDP – at purchasing power parity – has drifted downwards from 43% to 30%, while the original BRICS’ share has risen from just over 21% to nearly 35%. In dollar terms, the G7 is still well ahead, 43% to 27.7%, but the gap is narrowing. When Turkey joins as a BRICS member, together with Saudi Arabia, BRICS+ will have seven members in the G20, just like the G7, with Indonesia likely to follow soon after.

One now wonders if the BRICS+ members of the G20 will try, or can, use their collective clout to determine common economic and geopolitical positions within the G20. A situation could emerge in which, through BRICS+, they are pre-discussing common positions-which then may be quasi-non-negotiable positions-float them to the G20 and thereby make the G7 countries follow suit. This was a plausible scenario, but it is not plausible. Leaving aside China and Russia, BRICS+, G20 members like India, Brazil, South Africa, and Saudi Arabia have a vested interest in flexibility in strategic options and alignments. Being part of two groups simultaneously allows them to move through different approaches and alliances, hence combining advocacy for governance reforms in the global sense and rallying different regions and interests together.

But nations, like people, are multidimensional. Overlapping identities in the emerging powers shape their policies, allowing them to pursue multiple activities and shift positions in different forums. Consider Brazil, a boisterous yet brittle democracy. Under the leadership of President Luiz Inácio Lula da Silva, Brazil identifies itself with the Global South, protests against injustices at Bretton Woods organizations, and argues that it shall not be forced to select a camp between East and West. Yet, simultaneously it maintains a friendship with the United States and applies to join membership of the OECD, the organization of rich market democracies. Similarly, India, Saudi Arabia, and South Africa have their distinct identities and priorities, so does the remaining lot comprising Argentina, Indonesia, Mexico, South Korea, and Turkey from among the G20 countries that are not part of BRICS+.

The point is that these intermediate powers are very important in keeping the G20 as a platform for global cooperation in the face of increasing fault lines between the East and the West. This is the third year in a row that a country from the Global South, Brazil, is holding the G20 presidency after Indonesia and India, and before South Africa. These four countries do indeed share the goal of lifting the voices of developing nations for the promotion of reform in global governance through positive, inclusive multilateral diplomacy. They are not interested in promoting further global division nor getting caught in geopolitical rivalry. This earnest commitment to communication provides a golden opportunity for the West, including the United States of America, who will again lead the G20 process in 2026.