At present, the BRICS includes Brazil, Russia, India, China and South Africa, while Egypt, Ethiopia, Iran, Saudi Arabia and the UAE are expected to join from the coming January 1st.

Argentina was also invited to join however with a recent change in the political regime is now expected to decline. The five current members of BRICS are responsible for 37% of all global trade.

The 20 New BRICS Candidate Countries

In terms of the 20 new candidates, what will be attractive to many is the fact that the BRICS does not insist upon formal trade negotiations and the permanent imposition of tariff reductions. Rather than a defined tariff reduction regime, the BRICS has a far looser approach. This removes political barriers that include insistence on market and political reforms, which is more of a Western approach, and also means that tariff reductions and trade development enhancements can be implemented on an as-need basis. These are fundamental points of interests to emerging economies who may otherwise struggle to compete with cheap imports. It also allows more autocratic regimes to participate without the need to introduce unwelcome reforms that may not be considered in their national interest. Most of the 20 applicants have not been publicly identified, however in my experienced opinion are likely to include the following.

Afghanistan

An outlier, but Afghanistan has significant resources and is a member of the BRI. Diplomatic changes are required, but China, India and Russia are all keen to see redevelopment in the country once political stability can be secured.

Algeria

In terms of market size, Algeria has the tenth largest proven natural gas reserves globally, is the world’s sixth-largest gas exporter, and has the world’s third-largest untapped shale gas resources.

Bangladesh

Bangladesh is one of the world’s top five fastest growing economies and is undergoing significant infrastructure and trade development reforms. It shares a 4,100 km border with India.

Bolivia

Asset-rich but relatively poor, Bolivia has the fastest GDP growth rate in Latin America.

Cuba

Cuba’s sanctions defiance has long made it a favorite of China and Russia when wanting to annoy the United States. It also has significant agreements with China and Russia, is a member of the BRI and has significant Caribbean and LatAm influence.

Ecuador

Ecuador is negotiating Free Trade Agreements with both China and the Eurasian Economic Union. It would make sense to substitute these with a looser BRICS arrangement.

Indonesia

One of Asia’s leading economies, Indonesia’s potential has again been raised to join BRICS. In July 2023, Jakarta accepted an invitation to participate in the 2023 BRICS summit.

Kazakhstan

Kazakhstan’s economy is highly dependent on oil and related products. In addition to oil, its main export commodities include natural gas, ferrous metals, copper, aluminum, zinc and uranium.

Mongolia

Mongolia is both a problem and solution, while geographically attractive. It requires extensive investment in its energy sector; yet is resource-rich and a transit point between Russia, Kazakhstan and China. It is not a member of any trade bloc, with a looser BRICS arrangement better suited to maintaining its regional impartiality.

Nicaragua

Nicaragua is a mining play and the leading gold-producing country in Central America. It has a Free Trade Agreement with the ALBA bloc, and is an influential player in the Caribbean.

Nigeria

Nigeria’s Foreign Minister Yusuf Tuggar has announced that the country intends to become a member of the BRICS group of nations within the next two years. Nigeria has a GDP of US$448 billion, a population of 213 million and a GDP per capita of US$2,500. It has the world’s 9th largest gas reserves and significant oil reserves.

Pakistan

Pakistan has filed an application to join the BRICS group of nations in 2024 and is counting on Russia’s assistance during the membership process, the country’s newly appointed Ambassador to Russia Muhammad Khalid Jamali has stated.

Senegal

Senegal is a medium capacity gold mining and energy player, with reserves in gold, oil, and gas. The energy industry is at a growth stage as reserves have only recently been found. The energy-hungry BRICS nations will be keen to secure its supplies.

Sri Lanka

Sri Lanka isn’t keen on opening up its markets yet has significant economic problems. China is interested in port and Indian Ocean access while Russian tourism investments are increasing. A BRICS agreement would be loose enough to satisfy all concerns, while India will want to keep an eye on it.

Sudan

Sudan’s top five export markets are 100% BRICS – China, Russia, Saudi Arabia, India, and the UAE. Sudan also has regional clout. It is Africa’s third-largest country by area, and is a member of the League of Arab States (LAS). Should Sudan join the BRICS it would give the group complete control of the Red Sea supply routes.

Thailand

Thailand is one of ASEAN’s largest economies, via ASEAN it has additional Free Trade Agreements with Australia, New Zealand, Japan, South Korea, China, Hong Kong and India, and agreements with Chile, and Peru. Thailand is also a signatory to the RCEP FTA between ASEAN and Australia, China, Japan, New Zealand, and South Korea.

Turkiye

Turkiye’s trade figures with the current and most of the upcoming BRICS members show significant growth. Getting access to BRICS NDB funding may also prove attractive for Ankara as talks are expected across a number of issues.

Uruguay

Uruguay has joined the BRICS New Development Bank – a sure sign that official BRICS membership is pending.

Uzbekistan

Uzbekistan is one of Central Asia’s fastest growing economies, yet it is hampered by being double-landlocked. Membership of BRICS would give it market access to China, Europe, and the rest of Asia in a more protected manner.

Venezuela

Another outlier, but its energy reserves and political stance fit well with China and Russia’s needs.

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Additional candidates are also likely to include Costa Rica, El Salvador, Guatemala, Honduras, Panama, Chile, Peru, Azerbaijan, Tajikistan, Turkmenistan, Vietnam, Cameroon, DR Congo, Kenya and Tanzania among others.

Summary

At first glance this may appear a disparate and disjointed group with little in common. Yet this is part of the appeal. In the West, trade partner economies are typically viewed in terms of economic capability, and their immediate usefulness (or otherwise) to Western economies. Emerging economies that show promise are often ‘encouraged’ to embark on political and economic reforms to ‘bring them to international standards’. What has become apparent is that this tends to mean ‘Western benefits’ take precedence over these economies. That has included inadvisable World Bank loans, and the imposition of US dollar and Euro trade at the expense of their sovereign currencies.

In gathering together the ‘developing’ or ‘emerging’ economies, the BRICS have taken a bet on the future. While some potential members may fall into future difficulties created by regional conflicts, most will not. Absorbing these new members will take time – but could be completed by 2030.

Closer examination also reveals that many of the 20 listed above are significant economies, often amongst the leading players within their own respective trade blocs. These include the Greater Arab Free Trade Area (GAFTA), Latin America’s Mercosur, the African Continental Free Trade Area (AfCFTA), the Eurasian Economic Union (EAEU), and ASEAN, amongst others. Having BRICS members inserted into these regional blocs significantly enhances the BRICS own reach and influence within them. By comparison, the European Union appears strictly rigid in its approach. It resembles a closed market rather than an open one. In this way, the BRICS can be seen as an antidote to the previously over-regulated Western trade group systems, where trade negotiations are measured in decades and political conditions imposed in return for Western market access.

What is happening instead is far more revolutionary, and is leading to a rather more considered, and inclusive multi-lateral approach. The BRICS movement is developing more as a trade philosophy than a specific bloc – and will pave the way ahead in terms of global trade flows well into the coming decades.

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Chris Devonshire-Ellis is the Chairman of Dezan Shira & Associates.