GeoShift Insights | Podcast Ep. 1: SCO Summit Highlights and BRICS Expansion - June and Early July 2024 Developments

Steven Despard -
GeoShift Insights | Ep 1: SCO Summit Highlights and BRICS Expansion June and Early July 2024 Developments
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Complete Episode Text:

Welcome to GeoShift Insights, an AI-assisted podcast delivering concise briefings on BRICS and the Shanghai Cooperation Organization, from their economic and business developments to their growing global influence. I'm Cameron.

And I'm Lauren. In today's episode, we're highlighting key developments shaping these groups in June and early July 2024. From landmark summits to emerging membership bids, these developments reflect significant shifts in the global landscape.

But first, for those who are new to the topic of our podcast, we'll provide a brief overview of what these groups are and how they have evolved, starting with BRICS.

BRICS is the name for an economic cooperation group of non-Western countries, representing a diverse range of economies. As of 2023, the BRICS nations collectively represented approximately 32 percent of global GDP when measured by purchasing power parity. This significant figure surpasses the G7 countries' share of about 30 percent.

In 2023, the BRICS countries had an estimated combined population of three and a quarter billion people, which is more than 40 percent of the world's population. The majority of the BRICS population lives in China and India, which each have more than 1.4 billion people.[1-3]

The acronym BRICS was coined originally in 2001 by Goldman Sachs economist Jim O'Neill. He initially used "BRIC" to stand for four large emerging economies – Brazil, Russia, India and China. O'Neill believed these countries would play an increasingly important role in the global economy. In June 2009, these four nations held their first formal summit in Yekaterinburg, Russia, transforming the "BRIC" concept into an actual cooperative group.

South Africa formally joined the group in 2011, expanding it to five nations and creating the current BRICS acronym. Since then, BRICS has evolved into a more structured association and expanded its cooperation mechanisms and global influence, while maintaining its informal nature.[4-8]

Recently, the BRICS group has expanded to nine confirmed members. In August 2023, BRICS invited six new countries to join: Egypt, Ethiopia, Iran, Saudi Arabia, the United Arab Emirates, and Argentina. In early January 2024, four of them – Egypt, Ethiopia, Iran, and the United Arab Emirates – formally joined the original five members.

Argentina declined to accept the invitation to join BRICS under the new presidency of Javier Milei. As of July 19, 2024, despite conflicting reports, Saudi Arabia does not appear to have announced a final decision on the invitation. Given its status as a major oil producer, any future decision by the kingdom regarding BRICS membership could significantly impact the group's global economic influence.[9-14]

The Shanghai Cooperation Organization, or SCO, is a Eurasian intergovernmental organization, comprising 10 member states including China, Russia, India, Pakistan, Kazakhstan, as well as Iran, which joined in 2023. Additionally, about 16 countries have a status within the SCO as either observer states or dialogue partners, including Afghanistan, Turkey, Saudi Arabia, Egypt, and Cambodia.[15-16]

The SCO was founded in 2001. Initially, it focused on addressing regional security challenges in Central Asia. These included issues such as terrorism, separatism, and extremism. However, the SCO is not structured as a military organization or alliance, and over the years, the group has broadened its scope. While security issues remain an important component, the SCO's attention has shifted toward economics and development. The organization is now involved in facilitating cooperation in trade, energy, and transportation infrastructure development among its member states.[17-23]

Let's begin our first segment with the recent Shanghai Cooperation Organization summit, which took place in Kazakhstan, in early July 2024.

This high-profile gathering brought together SCO member state leaders, including Chinese President Xi Jinping and Russian President Vladimir Putin. The summit marked an important moment in the organization's history, as the SCO officially welcomed Belarus as its 10th full member.[24-26]

One of the key themes emerging from the summit was a call for greater independence from external influences. President Xi Jinping called on SCO countries to resist external interference and firmly control the future and destiny of their countries and put regional development and peace in their own hands. This call underscores the SCO's growing emphasis on self-reliance and regional cooperation.[27-29]

President Putin echoed these sentiments. He emphasized the emergence of what he termed a multipolar world. Putin also noted the strengthening of what he called "new centers of power and economic development." His statements underscore Russia's and the SCO's ambition to play a larger role in shaping global affairs and offer an alternative to Western-dominated international structures.[30]

Moving on to our second segment, let's examine the joint declaration issued by SCO members at the summit and some of the economic developments highlighted at the summit.

The joint declaration pointed to what were described as "tectonic shifts in global politics" and called for an enhanced role for the SCO in global and regional security matters. This language signals the organization's intent to take on a more prominent role in international affairs, and indicates the group aims to begin rivaling other global, Western-dominated organizational bodies.[31-34]

On the economic front, President Putin presented compelling statistics comparing 2023's economic performance to the previous year. He reported that in 2023, the average GDP growth in SCO member states was 5.2 percent, with industrial growth at 4.5 percent and the inflation rate at 2.4 percent. Putin also noted that Russia's trade with SCO countries rose almost 25 percent in 2023. This robust growth in trade likely indicates increasing economic interdependence among SCO nations and suggests additional shifts in global trade patterns lie ahead.[35-38]

Perhaps most notably, Putin revealed that the share of SCO member countries' national currencies in Russia's transactions with these countries exceeded 92 percent in the first four months of 2024. And he reiterated a proposal Russia made in 2023 to establish a payment and settlement system within the SCO.[39-41]

Now, let's turn our attention to the third and perhaps most dynamic topic of our discussion: recent developments that point towards further expansion of BRICS. We'll begin our exploration of this evolving situation in Southeast Asia.

In June 2024, Thailand took a crucial step toward becoming the first Southeast Asian member of BRICS, a move it views as aligned with its economic interests and ambitions to boost its role on the international stage. During the BRICS Foreign Ministers' meeting held in Nizhny Novgorod, Russia in early June 2024, Thailand's Foreign Minister delivered an official letter to the Russian Foreign Minister Sergey Lavrov expressing Thailand's interest in becoming a full member of BRICS. This action followed the Thai cabinet's approval of the letter in late May 2024.[42-45]

Thailand's admission would require unanimous approval from existing members before the country could be officially invited to join. Thailand hopes to receive a positive response to its application at the upcoming BRICS summit scheduled for the 22nd through the 24th in October 2024, in Kazan, Russia.[46-48]

Thailand is not the only Southeast Asian nation eyeing BRICS membership. Its neighbor Malaysia also seems intent on joining. In a mid-June 2024 interview with Chinese media outlet Guancha, Malaysia's Prime Minister Anwar Ibrahim confirmed his country's aspiration to join BRICS, stating, "We have made a decision. We are placing the formal procedures soon."[49]

Elaborating on what soon means, the Malaysian Foreign Minister revealed in late June 2024 that his country plans to pursue BRICS membership in 2025. This timing aligns strategically with Malaysia's chairmanship of ASEAN (the Association of Southeast Asian Nations) and Brazil's assumption of the BRICS leadership in the same year, demonstrating Malaysia's careful efforts to advance its economic interests while navigating the current complex geopolitical situation.[50-53]

As Malaysia and Thailand pursue BRICS membership, interest in joining the bloc has been growing in other regions as well, including Central Asia and South America.

Kazakhstan, a major player in Central Asian geopolitics and economics, has been making a strong effort to join BRICS. In early July 2024, during the Shanghai Cooperation Organization summit in Kazakhstan, Chinese President Xi Jinping expressed support for Kazakhstan's bid to join BRICS. This expression of support came in a joint statement issued following a meeting between Xi and the President of Kazakhstan. Shortly after, Kazakhstan's Deputy Foreign Minister emphasized that joining BRICS aligns with the nation's foreign policy objective of reaching out "to all partners including the West."[54-56]

Meanwhile, in South America, Venezuela has aggressively pursued BRICS membership since it submitted a formal intention to join around early August 2023. President Nicolás Maduro has publicly emphasized Venezuela's potential to contribute to the BRICS group, citing the country's vast oil reserves, its rich minerals deposits, including iron and gold, and its experience gained in adapting to the challenges posed by US sanctions.[57-60]

Despite not being invited to join in the first phase of BRICS expansion in January 2024, Venezuela appears to have strong support from key BRICS members. In February 2024, Russian Foreign Minister Lavrov expressed support for Venezuela's bid during a visit to Caracas. Later, in June 2024, Venezuela's Foreign Minister confirmed receiving "very strong" support from Beijing during his visit to China in the same month. He also noted that Brazilian President Luiz Inacio Lula da Silva, better known as Lula, has publicly backed Venezuela's entry into BRICS.[61-73]

Bolivia, another South American nation, has been actively pursuing BRICS membership since at least early August 2023, when the Bolivian Embassy in Moscow submitted a note to the Russian side expressing the country's desire to join the bloc. At the St. Petersburg International Economic Forum in June 2024, President Luis Arce reiterated the country's ongoing aspiration to join BRICS, stating that Bolivia seeks to join the group as soon as possible. During a speech at the forum, President Arce said that, from Bolivia's perspective, potential membership in BRICS is seen as a great opportunity to sustain the country's ongoing economic transformation and industrialization efforts.[74-79]

Like Kazakhstan and Venezuela, Bolivia also appears to have obtained some crucial support it will need from BRICS members for joining. In a press statement in early July 2024 that followed a bilateral meeting with President Arce, Brazilian President Lula acknowledged Bolivia's interest in joining BRICS, stating that Brazil views the inclusion of Bolivia and other countries in the region as "very positive." Earlier in April 2024, Russian Foreign Minister Lavrov communicated Moscow's support for Bolivia's membership aspirations during a press conference in Moscow with Bolivia's Foreign Minister.[80-84]

For our final segment, we'll focus on the upcoming BRICS Summit scheduled for October 2024 in Kazan, Russia. This summit could be crucial for the numerous countries aspiring to become BRICS members, including those we've discussed in this episode.

A report from the Business Standard, an India-based newspaper, published in late June 2024, offers insights into what aspiring countries might expect regarding their prospects for joining BRICS and the processes involved.

According to the report, Russia, as the 2024 BRICS chair, is developing a "partner-country model" as a mechanism for additional nations to join BRICS. Russia is reportedly developing this model, along with a list of prospective partner countries, to fulfill a task set during South Africa's 2023 chairmanship. This task directed the development of the partner-country model and a candidate list before the Russian Summit in October.

The Business Standard report further says that Moscow has proposed adding 10 partner countries to BRICS. According to the report, under the Russian proposal each current member would nominate 10 candidates from over 30 interested countries. BRICS would select new partner countries from those appearing on all members' lists. The Business Standard report speculates that this "partner-country" status could be a new category distinct from full membership that allows participation in some projects and initiatives but potentially not in decision-making voting.[85-90]

Consistent with the Business Standard's reporting, recent statements by Russian Foreign Minister Lavrov suggest that defining and implementing this partner-country concept may be the primary way BRICS expands in 2024, rather than admitting new full members. In late June 2024, he stated that BRICS voted to temporarily suspend admitting new members, explaining that the group needed time to integrate the recent additions that have nearly doubled its membership size. Concurrently, the Foreign Minister acknowledged ongoing work to create categories of partner countries, which aligns with the information reported in the Business Standard. Importantly, the Foreign Minister further specified that partner-country categories would serve as potential stages to full membership.[91-93]

This partner-country concept is already gaining traction among aspiring BRICS members, at least in one case – Malaysia. In mid-July 2024, Malaysia's Ambassador to Russia stated that his country is determined to join BRICS, as a new partner-country. The Ambassador's statement aligns with the June 2024 Malaysian Foreign Minister's statement – which we previously reported on in this episode – that indicated Malaysia would wait until 2025 to seek full membership.[94-95]

As countries consider the partner-country model, the upcoming BRICS summit in Kazan probably will significantly address any uncertainty they perceive in terms of prospects for joining the group.

We anticipate that before the Kazan summit concludes, the current BRICS members likely will clarify their expansion approach and define the distinctions between full membership and this potential partner-country status. They may also delineate the criteria for becoming a partner-country and then progressing to being a full member. It's possible that some countries, despite current indications, will still be invited this year to become full members.

We'll include any clarifications in future episodes, whether they emerge before or during the summit.

As we wrap up today's episode, it's clear that both the SCO and BRICS groups are making significant strides in reshaping global dynamics.

The SCO summit in Kazakhstan demonstrated the organization's ambition to play a larger role in international affairs, while also fostering closer economic ties among its members. Meanwhile, BRICS continues to attract interest from emerging and developing economies, and will likely further expand its reach and influence across multiple regions this year and the next.

These developments reflect a shifting worldwide economic landscape, with BRICS and SCO countries increasingly influencing international trade, financial systems, and economic developments.

For audiences worldwide, it's crucial to understand how the shifting landscape may impact global commerce, investment opportunities, and economic policies. We aim to provide timely updates and insights to help you navigate this evolving environment and understand its far-reaching implications for businesses and economies across the world.

Thank you for listening to GeoShift Insights. We'll be back soon with our next episode, bringing more information on these emerging and increasingly influential groups. Until then, keep an eye on the future. We'll see you there.

P.S. I used ElevenLabs to produce the audio for this post. Their text-to-speech technology is impressively natural and customizable. If you'd like to try it out for yourself, you can get started with ElevenLabs here. By using this link, you'll be supporting my blog at no extra cost to you. Thanks for reading (and listening)!

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