South Africa’s government has confirmed that the upcoming BRICS Summit will hold a discussion about a potential establishment of a new common currency, but no “major decisions” will be taken just yet.
Heads of State of Brazil, India, China and South Africa will gather in Johannesburg later this month for the 15th BRICS Summit to reflect on all the elements of cooperation, regional and global economic and political developments, as well as the global governance reform agenda.
Russia’s President Vladimir Putin, however, will attend virtually since the International Criminal Court issued a warrant for his arrest if he visited South Africa.
This will be the first BRICS Summit to be hosted in person since the emergence of the Covid-19 pandemic and the subsequent global travel restrictions.
There has been considerable discussion about a new BRICS currency that could challenge the US dollar as the world's reserve currency or, at the very least, provide an alternative.
Minister of International Relations Dr Naledi Pandor yesterday said they were expecting a briefing from the Heads of States on the initial thinking around this matter of currencies and payment systems, as well as international financial institutions.
Pandor said the Summit wouold receive a progress report on the potential development of the new currency from the newly-elected President of the New Development Bank (NDB), former President of Brazil Dilma Rousseff.
“This is a very topical discussion as countries of the global south are reflecting on the need to bring fairness to global financial systems and de-risk our economies and institutions from over-dependence on a single currency,” Pandor said.
“I do not anticipate that major decisions will be taken at this meeting. BRICS has just begun exploring this matter, and I think it will be up to the leaders following the briefing by the President of the NDB as to how much time they devote to discussing this particular issue.”
BRICS is an informal grouping of leading emerging markets and developing countries, namely Brazil, Russia, India, China and South Africa.
Pandor said BRICS Leaders would discuss the issue of membership expansion of BRICS.
She said the current geopolitical context has driven renewed interest in BRICS membership as countries of the global South look for alternatives in a multi-polar world.
“We have had formal expressions of interest from the Leaders of 23 countries in joining BRICS, and many more informal approaches about the possibilities of BRICS membership,” Pandor said.
“We see this interest as recognition of the voice of BRICS as a champion of the interests of the global South, particularly our agenda of reform and inclusion of the global South – true to our founding values.
“As a partnership, BRICS also operates on the principles of openness, solidarity, mutual respect and understanding as well as mutually beneficial cooperation that is seen to deliver tangible benefits.”
Together, BRICS has around 42% of the world's population, almost 30% of the world's territory, around 27% of global gross domestic product and around 20% of international trade.
South Africa’s overall trade with its BRICS partners has increased by an average growth of 10% over the period 2017-2021, reaching R830 billion in 2022 from R487bn in 2017.
Last year, BRICS accounted for 21% of South Africa’s global trade.
However, Pandor said trade with China remained the dominant force, but the share of other BRICS partners also increased by 10% from 2021 to 2022.
“South Africa continues to have a trade deficit in its overall trade with BRICS countries,” Pandor said.
“The urgent need for trade diversification as primary products continue to be the largest share of exports, therefore remains.
President Cyril Ramaphosa will host China’s President Xi Jinping on a State Visit on Tuesday at the Union Buildings in Pretoria where a number of bilateral agreements will be signed before the Summit kicks off.
Pandor indicated that Ramaphosa would also host Brazil President Lula da Silva on a State Visit as well.
The first event on the BRICS Leaders' programme is the BRICS Business Forum Leaders Dialogue will see Heads of States getting a report on the outcomes of the deliberations and will deliver statements reflecting on BRICS economic relations.
The Summit will end with the eGoli Declaration which will express BRICS views on contemporary regional and global political, financial and economic issues, reflect on the outcomes of mutually beneficial areas of cooperation during the year and the key outcomes of South Africa's Chairship.