Introduction to BRICS
The managers of the rapidly growing economies of the world are gathering in Rio de Janeiro, Brazil, to strengthen trade and technology exchange in the block, amidst the tariff threat of US President Donald Trump. Brazilian President Luiz Inacio Lula da Silva will organize the three-day conversations, which will be attended by Indian Prime Minister Narendra Modi and Chinese Prime Minister Li Qiang.
History of BRICS
The term BRICS was coined by Goldman Sachs Economist Jim O’Neill in 2001 to identify Brazil, Russia, India, and China as rapidly growing economies that would become global business powers by 2050. The term highlighted their increasing gross domestic product (GDP), large populations, and growing global influence. Despite diverse political ideologies and social structures, the political decision-makers in these countries took up the idea and initially held informal discussions between external ministers to create the basics for cooperation.
Development of BRICS
The first summit of the BRICS leaders took place in 2009 in Russia’s Yekaterinburg. A year later, South Africa was invited to join the emerging block, and an "S" was added to the BRIC acronym. Since then, BRICS has created an alternative to the World Bank, financing infrastructure and development projects, as well as a new mechanism to ensure financial support for economic crises, partly replacing the role of the International Monetary Fund (IMF). The block has also endeavored to start its own currency to challenge the US dollar, the global reserve currency, but progress has been slow.
Current Status of BRICS
BRICS now comprises 10 countries, including the original five, as well as Egypt, Ethiopia, Iran, the United Arab Emirates, and Indonesia, which joined at the beginning of this year. Although it remains an informal block, BRICS has become an important geopolitical and economic power on paper. The block corresponds to more than 40% of the world population and more than a third of global economic growth, based on purchasing power parity, exceeding that of the G7 group of industrialized countries.
Expansion and Future Plans
BRICS is set for explosive growth, with 44 nations either applying for membership or taking exploratory steps towards accession. This year alone, Belarus, Bolivia, Cuba, Kazakhstan, Malaysia, Thailand, Vietnam, Uganda, and Uzbekistan became partner countries, a prelude to formal membership. Other nations that have expressed interest in joining include Azerbaijan, Bahrain, Bangladesh, Burkina Faso, Cambodia, Chad, Colombia, and many others. The plan is for BRICS to continue to challenge Western global institutions, while also promoting economic cooperation and reducing dependence on Western markets.
Challenges and Concerns
Despite the potential for growth and expansion, BRICS faces several challenges and concerns. Internal divisions and competing national interests could hinder progress, and the rivalries between member countries could drive the block apart. The role of the US currency in global trade and the use of Chinese Yuan in international trade could also hinder the push for dedollarization. Additionally, economic differences between members, such as China’s GDP far exceeding that of South Africa or newer members, could lead to the displacement of priorities in favor of Beijing’s interests. There are also growing concerns about how democracies like India and Brazil can coexist with autocracies like China, Iran, and Russia.
