The term “BRIC” was coined in 2001 by economist Jim O’Neill at Goldman Sachs Group to highlight the strong growth rates in Brazil, Russia, India, and China. It was an optimistic thesis for investors amidst the market pessimism following the September 11 terrorist attacks in the United States. These four nations embraced the idea and ran with it. 

Now, we have crossed a new threshold. Leaders from Brazil, Russia, India, China, and South Africa have agreed to expand their BRICS group starting January 1 at a summit in Johannesburg. Major emerging countries, including the world’s leading oil exporter, Saudi Arabia, Iran, Egypt, Argentina, Ethiopia, and the United Arab Emirates, are joining the bloc, aiming to expand its global influence.

The inclusion of Saudi Arabia, the world’s largest oil exporter, alongside Russia, Iran, the UAE, and Brazil, brings many of the top energy producers together with the world’s biggest developing consumers, giving the bloc disproportionate economic heft. Since most global energy trade is conducted in dollars, this expansion could bolster its ability to encourage more businesses in alternative currencies.

After Western powers stunned the emerging world, especially by blocking assets of the Russian central bank, the move might hasten the world’s de-dollarization and give more strength to currencies like the Yuan and BRL. 

The expansion of BRICS is driven by the desire to build an alternative to a Western-centric international system. The Ukrainian conflict highlighted the dilemma between a Western world preaching to the rest of the planet and an emerging world tired of rhetoric that, in many cases, has been an excuse to serve American or European interests.

An expanded BRICS would also add weight to the alliance in global affairs and might lead to a different kind of global economy. The original BRIC members shared large economies and high potential growth rates. The expanded BRICS-11 is a less cohesive group, which might indicate broadening its agenda beyond economics.

China largely drove the expansion efforts but had the support of Russia and South Africa. India was wary that a larger BRICS would turn the group into a mouthpiece for China, while Brazil feared alienating the West. To some extent, the Saudis, the Emiratis in particular, and the Egyptians have global governance aspirations and see membership as a way to exert their leadership and realize their global ambitions.

The expansion of BRICS, and thus membership in the New Development Bank (NDB), is significant. Whether it’s Saudi Arabia, the UAE injecting capital, or Egypt, Argentina, Ethiopia, and potentially Iran benefiting from these funds, the bank has been a welcome addition to global financial architecture.

In some ways, this is a slap in the face to European and American diplomacy. The economic weight and potential influence of BRICS will become enormous, especially concerning natural resource management. The economic, geopolitical, and financial implications are vast and unknown.