BRICS Summit Expansion Fuels Global Economic Debate, De-Dollarization Push

The latest BRICS Summit has drawn worldwide attention as the economic bloc—originally comprising Brazil, Russia, India, China, and South Africa—accelerates its expansion and ambitions to reshape the global economic order. The summit, held in Rio de Janeiro under Brazil’s presidency, welcomed new partner countries, including Vietnam, and discussed the applications of over thirty nations seeking membership, such as Azerbaijan, Malaysia, and Turkey.

Expansion and Economic Weight

With recent additions like Egypt, Ethiopia, Iran, and the United Arab Emirates, the expanded BRICS now represents 37–46% of global GDP and over half the world’s population, surpassing the G7 in economic power. The bloc’s growing size is seen as a strategic move to amplify the voice of the Global South and challenge Western-dominated institutions. China and South Africa, in particular, are championing the “BRICS Plus” model to include more emerging economies and foster a multipolar world order.

De-Dollarization and Financial Initiatives

A central topic at the summit was the ongoing effort to reduce reliance on the U.S. dollar in international trade. The New Development Bank (NDB), headquartered in Shanghai and led by former Brazilian President Dilma Rousseff, is spearheading infrastructure lending in local currencies to insulate member economies from dollar volatility. South Africa and other African members highlighted the Pan-African Payment and Settlement System (PAPSS) as a model for cross-border trade settlements in local currencies.

Despite speculation, claims of an official BRICS currency were dismissed. Instead, a commemorative 200-ruble note featuring the founding nations’ flags was unveiled at the St. Petersburg Economic Forum, symbolizing the bloc’s unity but not representing a formal currency launch.

Geopolitical Tensions and Global Governance

The summit took place amid heightened geopolitical tensions, including recent U.S. actions in the Middle East and threats of tariffs against BRICS members from U.S. President Donald Trump if they undermine the dollar. The bloc reaffirmed its commitment to reforming multilateral institutions such as the United Nations, IMF, and World Bank to better represent emerging economies and the Global South. Parliamentary leaders from 16 countries, including partner states like Indonesia and Nigeria, signed a joint declaration advocating for a more inclusive global order and increased use of local currencies.

Internal Challenges and Future Outlook

While the group’s expansion signals growing influence, internal complexities remain. Notably, both China’s President Xi Jinping and Russia’s President Vladimir Putin were absent from the summit, with Xi citing scheduling conflicts and Putin participating via video link due to an ICC arrest warrant. Analysts note that while BRICS’ ambitions are high, cohesion among diverse members and external pressures from Western powers will test the bloc’s ability to deliver on its goals.

The summit’s outcomes underscore BRICS’ determination to drive a multipolar world order, promote economic cooperation in local currencies, and expand its membership, setting the stage for continued debates about the future of global governance and trade.