BRICS is shaking up global trade and challenging old power structures. This group of nations has become a strong advocate for emerging economies, prioritizing growth, collaboration, and reducing dependence on traditional Western systems.
So how did it all begin, and what has BRICS accomplished? From ambitious development projects to plans for a fairer global economy, this alliance is making waves. In this article, we’ll explore everything you need to know about BRICS and how it’s effecting the world.
What Does BRICS Stand For?
BRICS stands for a bloc of five nations: Brazil, Russia, India, China, and South Africa. A bloc is a group of countries that work together to achieve shared goals, often in trade or politics. In this case, BRICS members focus on growing their economies and supporting each other’s development. Each country plays a key role as a regional power, bringing unique strengths to the alliance.
This bloc works to reduce its dependence on Western markets and financial systems. For example, members invest in trade and infrastructure projects that connect their economies. By collaborating, they aim to create opportunities for growth in their regions.
The History of BRICS
BRICS began in 2006 as BRIC, a coalition of four major emerging economies: Brazil, Russia, India, and China. These nations were identified as having significant potential to influence global trade and finance. The group held its first formal meeting in 2009 to discuss ways to work together on development and financial stability. This gathering highlighted their shared dissatisfaction with global institutions heavily dominated by Western powers.
In 2010, South Africa joined the group, transforming BRIC into BRICS. South Africa’s inclusion added representation from the African continent, aligning with the group’s vision of promoting global inclusivity. This strategic move aimed to strengthen collaboration across regions, positioning BRICS as a more balanced and diverse coalition on the world stage.
What has BRICS achieved
| Year | Event/Initiative | Description |
|---|---|---|
| 2006 | Formation of BRIC | Brazil, Russia, India, and China form BRIC, focusing on collaboration among major emerging economies. |
| 2009 | First BRIC Summit | Held in Yekaterinburg, Russia, discussing economic cooperation and reforms in global financial institutions like the IMF and World Bank. |
| 2010 | South Africa Joins BRIC | South Africa becomes a member, making it BRICS and bringing African representation to the group. |
| 2014 | New Development Bank (NDB) Launched | Established to fund infrastructure and sustainable development projects in BRICS and other emerging economies, with an initial capital of $50 billion. |
| 2015 | Contingent Reserve Arrangement (CRA) | Created a $100 billion reserve pool to help member countries address short-term liquidity pressures and currency crises. |
| 2018 | BRICS Partnership on New Industrial Revolution (PartNIR) | Launched to foster innovation, industrial cooperation, and the digital economy among member states. |
| 2020 | Collaboration During COVID-19 Pandemic | Coordinated efforts to share medical supplies, technologies, and best practices to combat the global health crisis. |
| 2021 | Support for Vaccine Equity | Advocated for fair distribution of COVID-19 vaccines globally and emphasized the importance of affordable healthcare access in multilateral forums. |
| 2022 | Push for De-dollarization | Increased trade in local currencies, reducing reliance on the US Dollar in international transactions. |
| 2023 | Expansion of BRICS Membership | Announced plans to include new members, enhancing the group’s global influence and furthering inclusivity. |
| 2024 | Formal Inclusion of New Members | Egypt, Ethiopia, Iran, and the United Arab Emirates officially joined BRICS, expanding the group’s representation and influence. |
| 2024 | Introduction of BRICS Pay | Launched a payment system to facilitate transactions and financial information exchange among central banks, serving as an alternative to SWIFT. |
| 2024 | Adoption of the Kazan Declaration | BRICS nations endorsed UN reforms, supported Palestine’s full participation in the UN, and agreed to explore creating an autonomous cross-border settlement system. |
| 2024 | Establishment of Partner Countries | Thirteen nations, including Algeria, Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Nigeria, Thailand, Turkey, Uganda, Uzbekistan, and Vietnam, were added as partner countries. |
The Purpose of BRICS
BRICS was formed to boost the economic power of its member nations—Brazil, Russia, India, China, and South Africa. The group focuses on collaboration to drive growth, enhance trade, and share technology. By working together, they aim to reduce reliance on Western markets and financial systems like the SWIFT payments system. A key example is their push to create trade deals in their own currencies, bypassing the US Dollar. This reduces their exposure to currency fluctuations and financial sanctions.
Beyond economics, BRICS tackles global challenges collectively. They address issues like food security, climate change, and energy access by pooling resources and sharing ideas. These joint efforts not only aim to solve pressing problems but also give BRICS countries a stronger voice in shaping global decisions, increasing their influence in the world economy.
Challenging the IMF and Western-Dominated Systems
The International Monetary Fund (IMF) plays a significant role in global financial stability. It provides financial aid to countries in crisis, advises on policies like inflation control and trade improvements, and oversees a special reserve currency called Special Drawing Rights (SDRs) to assist nations during economic challenges. However, the IMF has faced criticism for favoring wealthier nations in its decision-making process.
One key issue is the IMF’s voting system. Voting power is tied to financial contributions, giving wealthy countries, like the U.S., disproportionate influence. For example, the U.S. holds 16.5% of total votes, enough to veto major decisions. BRICS has been vocal about how this system unfairly limits the representation of developing nations, even as their economies grow and play a larger role in global trade.
By advocating for reforms, BRICS seeks to create a more balanced system that gives emerging economies the recognition and influence they deserve.
Impact of BRICS on Global Trade
Shifting Trade Patterns
The group prioritizes boosting trade between emerging economies, without involving Western markets. For instance, trade deals between Brazil, India, and China have grown significantly. These partnerships help members bypass traditional Western trading hubs. By encouraging direct trade routes and agreements, the group creates more opportunities for developing regions.
New Development Bank (NDB)
The NDB funds infrastructure projects that connect member nations. Ports, railways, and digital networks are some of its focus areas. These developments make trade faster and cheaper for BRICS nations. For instance, the NDB has funded green energy projects that power industries in member countries. These initiatives create better conditions for global trade and growth.
Trade in Local Currencies
BRICS is reducing reliance on the US Dollar in global trade. Members are encouraged to use their own currencies for transactions. This change shields them from currency fluctuations and sanctions. For example, Russia and China have strengthened trade using the yuan and ruble. These moves promote financial independence and reduce the influence of Western monetary systems.
How Many Countries Are in BRICS?
BRICS Member Countries (As of November 2024)
- 🇧🇷 Brazil
- 🇷🇺 Russia
- 🇮🇳 India
- 🇨🇳 China
- 🇿🇦 South Africa
- 🇪🇬 Egypt
- 🇪🇹 Ethiopia
- 🇮🇷 Iran
- 🇦🇪 United Arab Emirates
Countries Expressing Interest in Joining BRICS or Invited as Partners
- 🇹🇷 Turkey
- 🇮🇩 Indonesia
- 🇩🇿 Algeria
- 🇸🇦 Saudi Arabia
Countries Invited as Partner Nations (October 2024)
- 🇩🇿 Algeria
- 🇧🇾 Belarus
- 🇧🇴 Bolivia
- 🇨🇺 Cuba
- 🇮🇩 Indonesia
- 🇰🇿 Kazakhstan
- 🇲🇾 Malaysia
- 🇳🇬 Nigeria
- 🇹🇭 Thailand
- 🇹🇷 Turkey
- 🇺🇬 Uganda
- 🇺🇿 Uzbekistan
- 🇻🇳 Vietnam
What is the BRICS Currency?
The idea of a unified BRICS currency has been a topic of discussion for years, but as of November 2024, no concrete plans have materialized. Instead, the group is exploring the use of digital currencies to facilitate trade and investment, aiming to strengthen economic ties among member nations.
One major driver of these discussions is the desire to move away from reliance on the US Dollar. Dependence on the Dollar exposes BRICS economies to risks like currency fluctuations and sanctions. An alternative currency could provide greater control over trade and reduce the financial pressures associated with the Dollar’s global dominance. However, creating such a system is challenging due to the diverse economic structures, varying development levels, and exchange rate complexities among BRICS members.
Despite these obstacles, a gradual shift is already underway. BRICS countries are increasingly conducting trade in their local currencies. For instance, China and Brazil have agreed to settle trades in yuan and real, while India and Russia are exploring transactions in rupees and rubles. These steps aim to reduce Dollar dependency and strengthen trade partnerships within the bloc
The Future of BRICS
BRICS is expanding, aiming to include more countries from Africa, Southeast Asia, and South America. This growth reflects its ambition to represent the Global South and amplify these regions’ influence on the global stage.
While balancing economic and political differences among its members remains a challenge, BRICS’ growing membership and focus on practical solutions position it as a rising force in global governance.
