Among the topics on the table for the upcoming BRICS Summit in South Africa in late August, we could highlight the prominent topics related to the use of national currencies for intra-BRICS (Brazil, Russia, India, China and South Africa) trade relations and the expansion of the grouping. However, a third topic deserves greater attention: cooperation in digital infrastructure for developing digital economies and governance.

While the proposal to have a common BRICS currency is currently out of the question, the proposal that aims to expand agreements to finance bilateral trade in their national currencies has gained strength among the five countries. The risks to economic sovereignty arising from excessive dependence on the U.S. currency and the need to reduce transaction costs in intra-BRICS trade relations make this agenda item a priority.

The process of the de-dollarization of the global economy will be slow. Still, it seems irreversible and partly driven by China’s dedicated diplomatic effort to promote the yuan in its relations with its partner countries. Most trade deals between Russia and China are already being conducted with the Russian ruble and the yuan. The agreement between China and Brazil to facilitate the direct transaction between the Brazilian real and the yuan in bilateral commercial operations was well received and accepted in Brazil, signaling that Brazilian economic actors are on board with this measure.

Delicate issue

The same cannot be said for the expansion of BRICS. That is a delicate issue due to the change in international geopolitics that the expansion of the group could bring. Since it proposed BRICS Plus in 2017, China has already been signaling that it wants to expand the BRICS grouping. For its part, Brazil understood that outreach dialogues with countries invited to participate in the summits were sufficient.

But recently, the proposed expansion of the BRICS grouping gained new impetus due to an “external stimulus.” More than 40 countries have expressed interest in definitively joining the grouping. What is the reason for this growing interest in the BRICS grouping, which, in its early years, was viewed with a certain skepticism by the international community, especially Western powers? The search for inclusive and results-oriented multilateralism may be one of the answers to this question.

However, some analysts argue that expanding the BRICS grouping could weaken it by making decision-making more difficult. Others point to the risk of the BRICS grouping being seen by the international community as a Group of 20 (G20) of developing countries or a smaller-scale version of the Group of 77 (G77), the largest intergovernmental organization of developing countries in the UN with 134 members. Some believe accepting the membership requests made by Iran, Saudi Arabia, Nicaragua, Afghanistan and the United Arab Emirates would form an?“anti-democratic bloc” or a bloc with an anti-Western profile. Some say that the expansion of the BRICS grouping is in China’s exclusive interest.

Even though it may serve the Chinese national interest (and all countries seek to defend their national interests), the expansion of the BRICS grouping could dilute rather than concentrate Chinese power. It is true that the increase in the number of countries is a challenge for the grouping, but this fact can only stifle its effectiveness if there are no well-established objectives and work methods. The lack of institutionalization, in this case, is a problem.

BRICS would not become a new G20 or a version of the G77, either. The reformist global governance agenda for inclusive multilateralism is a hallmark of the BRICS grouping. This defines and sets it apart from the G20 or the G77. The BRICS grouping is also not a bloc that configures itself as “anti-anything”—just carefully read the declarations of all the summits. If it is not a bloc dedicated to promoting democracy in the domestic sphere of each country, neither is it a bloc that is against a democratic regime. The focus of the BRICS grouping at the domestic level of each of its members is on the socioeconomic development of its people.

Brazil and India are reticent about the expansion of BRICS. They understand that it is necessary to define the criteria for accepting new members. Brazilian President Luiz Inácio Lula da Silva showed sympathy for the entry of Venezuela, which did not even ask to join the grouping, but the same emphasis is not seen when it comes to supporting Argentina’s request. Criteria are missing. The possibility of Argentina joining BRICS does not seem to please a part of the Brazilian Government, and Brazil’s Ministry of Foreign Affairs fears that Brazil will see its influence reduced in its relationship with other BRICS countries.

For Brazil, Argentina’s entry into BRICS would need to be inserted into a framework that meets the interests of Brazilian foreign policy. The problem is that the Lula administration has not yet defined this framework. The administration’s support for Argentina’s entry into the New Development Bank does not resolve this question, but points to a direction.

Need for institutionalization

We know that BRICS is not an international organization. In this sense, there are no preset rules regarding the accession of new members. The accession process became, for this reason, too open and eminently political. This is the moment to propose the institutionalization of BRICS, that is, to make it an international organization, albeit with a simplified institutional structure. The discussion about the criteria for joining new members is typical for the constitutive agreement of an international organization and would provide greater legal and political security for all. Furthermore, effective institutionalization creates the conditions for more transparent management, less dependence on one country or another, and more protection for the grouping against external interference.

Better than focusing on the discussion about who joins BRICS and who does not, is to focus on “putting the house in order” and giving it the structure it deserves to guarantee it an even better future.

Finally, the BRICS countries must take advantage of their potential for intense cooperation to develop their agendas connected to new technologies and promote the creation of a digital infrastructure.

This is the future for BRICS. This theme is associated with its institutionalization, which could benefit from technological advances for a more effective, simplified and easily accessible institutional structure for the people of all BRICS countries.

In addition to expanding the BRICS grouping, it is also necessary to expand its reach within the societies of its member countries. A gradual and comprehensive expansion will allow its members to make use of their full potential. BRICS is not just a question of the government but of the people involved. This will give BRICS a reinforcement of legitimacy to face the challenges of today’s world.

The author is a professor at and head of the Center for Brazil-China Studies at FGV Law School in Rio de Janeiro, Brazil.