Thailand Embarks on BRICS Membership Journey, Signals Shift in Economic Strategy
Recent developments reveal that Thailand has officially applied for membership in the BRICS consortium, as reported by Reuters. This strategic move occurs alongside Thailand’s involvement in the mBridge cross-border central bank digital currency (CBDC) project initiated in collaboration with Hong Kong and other BRICS nations such as China, the UAE, and Saudi Arabia.
Though Hong Kong is a special administrative region of China, it remains distinct in its economic operations. The mBridge initiative, managed under the Hong Kong BIS Innovation Hub, recently unveiled a minimum viable product (MVP) aimed at enhancing cross-border digital currency transactions.
“We hope to receive positive feedback and be accepted as a BRICS member at the next summit in Russia,” stated Thai Foreign Ministry spokesperson Nikorndej Balankura. This comes as Malaysia also declared its intentions to apply for membership soon. In February, South Africa disclosed that 34 countries had shown interest in joining BRICS, suggesting a burgeoning queue for membership.
BRICS recently expanded its membership from its original five nations—Brazil, Russia, India, China, and South Africa—to include Iran, Saudi Arabia, the UAE, Ethiopia, and Egypt, effectively doubling its size.
Promoting Local Currency Settlement for Trade
A key BRICS objective is to enhance the use of local currencies in international trade. Discussions about establishing a BRICS Bridge digital currency platform highlight this focus. Malaysia’s Prime Minister Anwar Ibrahim, in an interview with Chinese news outlet Guancha, noted the increased adoption of local currencies in trade agreements.
"Trade with China in local currency has reached 18% to 20%, and similar trends are observed with Indonesia and Thailand. It’s a promising start, but we have significant room to expand this cooperation and attract more participants,” Anwar stated.
While acknowledging the persistent role of the US dollar, Anwar emphasized that leveraging local currencies could substantially mitigate the dollar’s impact on regional economies. He also revived the idea of an Asian Monetary Fund to further this goal. "People may worry about China dominating, but we should aim for an independent, professionally-run institution where China’s participation is crucial for success," he added.
However, the proposal has met with mixed reactions in the region. Indonesia, for instance, has expressed concerns about the financial feasibility of such a fund, advocating for intensified efforts in local currency settlement instead. In a past interview, Indonesia’s Economic Minister Airlangga Hartarto pointed out that Chinese enterprises investing in Asia frequently still transact in US dollars.
Despite a collective desire to lessen dependence on the dollar, it appears that this transition will take time and persistent effort.
Sources:
- Reuters: Thailand applies for BRICS membership
- Ledger Insights: mBridge cross-border CBDC project
- CNN: 34 countries express interest in BRICS membership
- Guancha: Interview with Anwar Ibrahim
