BRICS will include four Islamic countries: how much its strength will grow with the addition of Saudi Arabia

BRICS currency has the potential to become a viable alternative to the US dollar. The evening of August 24, Johannesburg, South Africa’s capital

The addition of six more countries to the world’s third most powerful economic organisation, BRICS, has been announced. Four of these six countries are Islamic.

India has also decided to admit these nations to the BRICS organisation. Prime Minister Modi stated that we have a long history with these countries. Joining the organisation of six countries, including Saudi Arabia and the United Arab Emirates, is associated with its expanding strength.

Will this actually help the BRICS? How much will this benefit India and other member countries?

There are now no Islamic countries in the BRICS, according to Professor Rajan Kumar, the author of the book “Locating Bricks in Global Order,” which is about this organisation. The Muslim faith is practised by a sizable portion of the Indian population. An effort has been made in this circumstance to eliminate the type of imbalance that occurred within this organisation. This is the rationale for the decision to invite four Islamic nations to join this organisation. Saudi Arabia, the United Arab Emirates (UAE), Iran, and Egypt are among them.

Due to these three factors, joining this group of nations will make BRICS stronger globally than countries like Saudi Arabia and the United Arab Emirates…

1. Nations like Saudi Arabia and the United Arab Emirates have exceptionally high per capita incomes. In addition to this, he also possesses a sizable amount of cash in foreign reserves. If these nations join BRICS under this situation, the group will gain economic strength.

As an alternative to the World Bank and the IMF, the New Development Bank of the BRICS can be founded with their participation. Members of BRICS feel that receiving an IMF loan is similar to choking for any nation.

For BRICS NDBs to properly aid poor nations, additional funding is required.

2. Saudi Arabia is lessening the reliance of its economy on oil. It has a very high investment capacity right now. This nation will contribute to the BRICS organization’s projects. The member nations will gain from this.

3. The two largest oil-producing nations in the world, Saudi Arabia and Russia, will now join the BRICS.

From India’s perspective, Saudi Arabia and the United Arab Emirates joining BRICS is advantageous for the nation. The positive relations between Saudi Arabia and India are the cause of this. However, the percentage of Indians in the UAE’s overall population is merely 30%.

The BRICS nations made about 26% of the global GDP up until this point. which, after the inclusion of six additional nations, will now be around 33%. While the GDP of the most dominant economic organisation at the moment is only 30% of the G7.

Three significant problems will arise for BRICS as a result of these nations’ membership.

1. A lot of coordination issues arise when an organisation grows. Member nations might need to coordinate their efforts better.

2. Russia and Iran are subject to far too many limitations imposed by Western nations. How to handle those limitations will be the difficulty this organisation faces in such a scenario.

3. Previously, this organisation only had two competitor nations—China and India—but now two more will join Saudi Arabia and Iran. The operation of the organisation may be impacted in such a circumstance.

Will joining the BRICS have any effect on the United States and the European Union?

America or the European Union are not the target of BRICS. Because it is not a military alliance, this organisation has no animosity towards any nation or other organisation. It functions as both a political and economic entity. India and America enjoy excellent connections.

Jake Sullivan, the national security adviser for America, has stated that the US does not view the BRICS as an anti-American alliance. One explanation for this is the fact that this organisation counts some of our friendly nations as powerful members.

Undoubtedly, BRICS opposes the dominance of western nations, but this group supports the international rule of law, the international order, and the norms established by major international organisations. It is not directed at them.

What will happen to the dollar if the BRICS introduce their own currency?

Cyril Ramaphosa, the president of South Africa, which will host the BRICS Summit in 2023, gave a press conference on the final day of the gathering. Speaking of the BRICS currency, he stated that the Reserve Bank and finance ministers from every nation have been urged to take it into consideration. This subject will be discussed in the coming year. Ramaphosa’s remarks made it apparent that the debate over the BRICS currency will go on even though there isn’t an agreement among the member nations.

These members of the group support the BRICS currency

1) Lula de Silva, the president of Brazil, speaks about the BRICS currency the most. He thinks that nations shouldn’t be forced to use the dollar exclusively for commerce. The opportunity to pay for member nation exports will rise with the introduction of the BRICS currency. As a result, those helpless nations in the globe with small dollar reserves will benefit.

2) On the final day of the meeting, Russian President Putin spoke briefly but made sure to bring up the BRICS currency. The sanctions against Russia as a result of the conflict in Ukraine are to blame for this. Dollars cannot be used in Russia. In this case, it falls under the category of BRICS nations that are the largest backers of the regional currency.

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India and South Africa aren’t particularly vocal supporters of the BRICS currency. There is no idea about the BRICS currency, said S. Jaishankar, minister of external affairs, in July. Both of these nations are adamant about encouraging the use of national currencies among the members rather than the BRICS currency.

President Xi Jinping of China said nothing about the currency. However, it is undisputed that adjustments to the international financial and monetary system are required.

Will the dollar actually be threatened by the BRICS currency?

There hasn’t been any significant change to the BRICS currency. The Times of India reported that the introduction of a BRICS currency might upend the standing of the dollar in the global economy.

The BRICS organization’s robust economy is the cause of this. Two of these nations, China and India, which rank among the top 5 economies in the world, are members of the organisation. Its position will be directly impacted if they decrease commerce in dollars.

Saudi Arabia has recently joined the group. which is one of the biggest oil exporters in the world. China and India continued to purchase their oil using dollars. Since they would be using BRICS money, it only seems sense that the dollar will decline.