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The BRICS intergovernmental organisation, its name an acronym for its founding members: Brazil, Russia, India, and China, as well as its earliest addition, South Africa, held its first summit on the 16th June 2009 in Yekaterinburg, Russia. The economist Jim O’Neill created the term BRIC in 2001 with the belief that these economies would dominate global economic growth by 2050. Between 2000 and 2009, the pace of growth of emerging economies outpaced that of developed countries for the first time. A 2001 Goldman Sachs Economic Research Report ‘Building Better Economies BRICS’, authored by Jim O’Neill, focused on Brazil, Russia, India, and China as key drivers for future economic growth. This, so far, is appearing to have much truth behind it.
BRICS is seen to rival the G7. It stands in contrast to the Western Sphere of economic power and aims to counter the traditionally Western-led global order. Representing emerging and developing economies, the organisation aims to boost its nations’ influence around the world. Rather than relying on Western economies, BRICS nations depend on each other for economic stability, seeking to establish deeper economic and political ties between member states. Trade is at the forefront of means to accomplish this.
Egypt, Ethiopia, Iran, UAE, and Saudi Arabia are also member states as of 1st January 2024. The BRICS organisation represents over 40% of the world’s population, encompassing 3.5 billion people, and conducts roughly 20% of world exports, with four member states featuring in the top 10 ISA country power rankings. Bearing these statistics in mind, BRICS can be clearly considered a formidable and core force in the world economy, controlling many of the natural resources so many states are dependent upon. Moreover, G7 states Japan, Italy, and the UK have significantly struggled with economic growth in recent years, positing the possibility that BRICS is re-balancing the world economic order. The ambition of China’s unprecedented Belt and Road Initiative and India’s desire to become the third largest economy at the end of the decade only furthers this notion.
However, it isn’t all smooth sailing for BRICS. One big issue is the dominance of the US dollar. It is the most widely used reserve currency, making up more than 60% of the central bank currency reserves. Moreover, commodities such as crude oil are priced in dollars, often regarded as the most important commodity in the world. This is problematic for BRICS states such as Russia, Saudi Arabia, and the UAE, all of which hold a significant portion of the world’s oil reserves and whose economies rely on the exportation of this much prized resource. If China or India conducted significant financial reforms to achieve the goal of being less reliant on the dollar, their currencies would certainly be more widely used. However, simply complaining about the dollar and dreaming of a shared BRICS currency is not going to achieve much.
Notably, the BRICS group could be more effective if key member states were serious about pursuing shared goals. But, given China and India’s tendency to disagree along with Russia’s historic rebellious nature on the international stage, the group may never be as effective as it could be. More specifically, member states have been less than enthusiastic about other members gaining more influence in key global institutions and the world economy as a whole. Unless, of course, there is equal balance, which is close to impossible.
Since its establishment, BRICS has certainly challenged the Western-dominated economic order that characterized the 20th century, with the development of China and its position as foil to the USA being a big part of this. Moreover, it has been symbolic in representing the Global South and emerging economies. With G7 states slowing in economic growth, it is a great opportunity for BRICS to seize the wheel and steer the world economy in a new direction. But, the dominance of the US on the world stage is going to be extremely difficult to rival, especially if BRICS member states do not work as a unified front. For now, at least though, we are witnessing some level of re-balancing in the world economic order.
Image: Kremlin.ru ‘Participants of the Meeting of the BRICS Leaders with the Heads of Delegations of the Invited States‘, 2018 // CC BY 4.0
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