Indonesia has officially become the newest full member of the BRICS group, marking a significant milestone in the alliance’s expansion. Brazil's government made the announcement on Monday, confirming Indonesia's long-anticipated entry into the coalition of emerging economies. This addition brings BRICS' total membership to 11 countries, including Brazil, Russia, India, China, South Africa, and newer members such as Egypt, Ethiopia, Iran, the UAE, and Saudi Arabia.
Indonesia's Strategic Move to Join BRICS
Indonesia had been eyeing BRICS for years, eager to align itself with the group’s mission to challenge Western-dominated global systems and amplify the voice of the Global South. The approval for Indonesia’s membership came during the BRICS summit in Johannesburg in 2023. However, Indonesia delayed formalizing its membership, waiting for political stability after its presidential elections. With President Prabowo Subianto now in charge since October 2023, the timing was right for Indonesia to officially join the bloc.
BRICS Grows Stronger with Indonesia's Membership
BRICS continues its expansion, and Indonesia’s inclusion strengthens the bloc’s global presence. Collectively, BRICS countries represent a staggering 37.3% of global GDP (purchasing power parity) and house more than 3.3 billion people, nearly half of the world’s population.
Indonesia’s economy is valued at over $1 trillion, positioning it as a valuable member within BRICS. The nation plays a critical role in global trade, manufacturing, and natural resources, which adds considerable economic weight to the coalition. Moreover, Indonesia has voiced strong support for BRICS' agenda of reforming global governance, further enhancing its relevance in the group.
As stated by Brazil, Indonesia’s addition "contributes positively to the deepening of cooperation in the Global South," underscoring the nation’s alignment with BRICS’ broader goals.
BRICS and the Push for De-Dollarization
A key agenda for BRICS is de-dollarization, seeking to reduce reliance on the U.S. dollar for trade and financial transactions. A crucial component of this effort is the development of the "BRICS Bridge," a blockchain-powered payment system designed as an alternative to SWIFT. The BRICS Bridge aims to enable member countries to settle trade in their own currencies and Central Bank Digital Currencies (CBDCs), circumventing the dollar.
In line with this, BRICS is exploring the creation of a new reserve currency, tentatively called the "Unit," which could be backed by a basket of member currencies and potentially gold. India has already led the way in signing trade agreements with 22 countries, allowing bilateral trade to occur in local currencies instead of the U.S. dollar, a strategy that has gained traction as countries like Russia seek financial alternatives in the wake of sanctions.
Challenges Ahead for BRICS and De-Dollarization
Despite these ambitious plans, critics argue that the dollar’s dominance in global finance will not collapse quickly. Economic disparities among BRICS members, fluctuating currencies, and logistical hurdles could slow down the process of de-dollarization. However, the bloc remains undeterred and continues to push forward with its initiatives, reflecting its commitment to reshaping the global economic order.
The Trump-Putin Dynamic: Implications for BRICS
The evolving political dynamics, particularly with Donald Trump’s potential return to the U.S. presidency, add another layer of complexity to BRICS’ future. Trump’s relationship with Russia has been unpredictable, and his stance on economic sanctions could significantly impact Russia’s position within BRICS and its broader strategy.
If Trump’s administration intensifies sanctions against Russia, it could further isolate Moscow from Western financial systems, strengthening the case for BRICS' efforts toward financial independence and de-dollarization. This would likely accelerate the push for alternative payment systems and new reserve currencies within BRICS.
On the other hand, if Trump seeks to ease tensions with Russia, it could provide the bloc with more space to focus on long-term goals without the immediate pressure of heightened sanctions. Either scenario underscores the complex relationship between geopolitical dynamics and the success of BRICS' financial initiatives.
Russia’s Role in BRICS Amid Economic Struggles
Russia’s economy has faced significant challenges, with inflation soaring and the ruble’s value plummeting. Oil revenue has sharply decreased, and the country has lost billions in gas transit fees due to the war in Ukraine. Despite these economic setbacks, Russia has doubled down on its commitment to BRICS, viewing the coalition as a crucial counterbalance to Western influence and a vital lifeline for its economy.
For BRICS as a whole, Russia’s struggle with sanctions and economic isolation is a key factor in shaping the group’s future direction. A tighter grip on Russia could accelerate the bloc’s plans to build alternative financial systems, whereas a shift in U.S. policy could give the group more breathing room to focus on broader objectives.
Conclusion: A Stronger BRICS Moving Forward
Indonesia’s formal entry into BRICS marks a pivotal moment for the coalition, further solidifying its position as a powerful force in global geopolitics. As BRICS continues to expand, with a focus on de-dollarization, reforming global governance, and strengthening economic ties, its influence is poised to grow. Indonesia’s support for these goals, along with the bloc’s growing political and economic clout, signals a shift towards a more multipolar world order—one in which emerging economies are increasingly shaping the future of global trade and finance.
January 2025, Cryptoniteuae