The end of August this year was marked by the 15th summit of BRICS nations. The event was surrounded by controversies, but its outcome, namely the addition of new members, drew even more attention to the organization. The announcement spurred debates about the BRICS’s role in the future of the global economy and how it might change the global political landscape.
Today we invite you
to take a closer look at BRICS. We will discuss what it is, how it has
developed over the years, and its achievements and failures. We will also
specifically focus on what role the alliance might have in the shifting of the
current world order.
What is BRICS?
The acronym BRIC was
coined in 2001 by then Goldman Sachs chief economist Jim O'Neill. He wrote a
research paper that underlined the growth potential of the world’s emerging
economies – Brazil, Russia, India, and China – but did not include South
Africa.
The bloc was founded
by Russia in 2009 as an informal club, and from the start, its aim was to
challenge a world order dominated by the USA and its western allies. A year
later, the group was joined by South Africa and became BRICS.
BRICS is not a formal
organization like the UNO or the EU; however, it accounts for more than 40% of
the world population. The original BRICS members are expected to have a
combined GDP of $27.6 trillion in 2023, which is a little more than a quarter
of the world’s total.
BRICS achievements and
failures over the years
In 2021, the 20th anniversary of the term BRIC, its author Jim O’Neill wrote an article for Project Syndicate in which he summed up the group’s progress over two decades. He didn’t have too many good things to say.
Although the 2010s,
in O’Neill’s words, were a roaring success for BRIC countries, the next decade
turned out less than great for Russia and Brazil. By 2021, their shares of
global GDP fell back to where they had been at the beginning of the 2000s. Only
China’s – and in part India’s – economic growth allowed the alliance to retain
its influence in the global arena.
Overall, the
cooperation between the club countries has been undermined by disputes,
diverging interests, and their indecision in taking pragmatic steps in order to
reach shared geopolitical goals. Russia’s annexation of Crimea and further war
with Ukraine, India’s and China’s border disputes, and the damage done by
Brazil’s former president Jair Bolsonaro to Brazil-China diplomatic relations
have undermined the alliance’s mutual cooperation.
As a result, there
aren’t many BRICS achievements to name thus far. The two major ones are the
setting up of the Contingent Reserve Arrangement (CRA) that countries can tap
for financial support and the establishment of the New Development Bank, which
finances infrastructure and development projects in BRICS countries.
Otherwise, BRICS has
largely failed to counter the power of the West or bring any systemic change to
the existing world order. According to the academic and author Vijay Prashad, economic
growth in BRICS countries has come at the expense of ordinary working people
and the environment, and the BRICS elites are not seeking to overturn the
existing system of global governance but merely to join it.
However, some experts
still defend BRICS as an informal club that serves to manage tensions between
its members while promoting mutual cooperation. And definitely, not all is lost
for BRICS if we count the results of the recent BRICS summit.
The outcome of the 15th
BRICS summit
Despite glaring
problems within the club, it remains appealing for other developing economies.
Over 40 countries have expressed interest in joining the forum, according to
2023 summit chair South Africa. These countries still see the bloc as an alternative
to global bodies dominated by the West and hope to increase trade and
investment with BRICS.
As a result of this year’s summit, six countries were officially invited to join the club: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates. Their membership will take effect on January 1, 2024.
Western media largely regard the expansion of BRICS as a clear sign of the lack of progress in relations inside the club. The choice of the new members also reflects the desire of individual BRICS countries to bring allies into the group. However, nobody actually forced any of these countries to join the bloc, which means their leaders either see future benefits for their states or would like to make a geopolitical statement.
The future of BRICS
Experts suggest that
the addition of new members won’t help to solve contradictions inside the
alliance and might even do more harm than good. For example, Saudi Arabia and
Iran have a history of troubled relations and might end up not engaging in any
coherent cooperation within BRICS.
Nonetheless, the new
club members will strengthen BRICS’s presence in Africa, South America, and the
Middle East. Its GDP is expected to climb to $30.8 trillion, and its share of
oil production will grow from 20.4% to 43.1%.
Although BRICS
members’ plans to create a common currency for trade purposes and dethrone the
US dollar remain unfulfilled, they have been consistently increasing trade
operations in national currencies. This can eventually lead to the global shift
the BRICS countries are aiming for.
At the moment, it’s
hard to say what lies ahead for BRICS. Bigger doesn’t always mean better, and
in this case, the expansion of the bloc can either pose new diplomatic
challenges or inhale new life into the otherwise stagnant alliance. However,
the ongoing war between Russia and Ukraine, Russia’s standoff with NATO, and
China’s tensions with the US bring the world closer to a conflict of global
proportions that no economic alliance can survive.
What are your thoughts for the future of BRICS? Tell us in the comments.
