BRICS

BRICS is a grouping of Brazil, Russia, India, China, and South Africa formed by the 2010 addition of South Africa to the predecessor BRIC. The original acronym "BRIC", or "the BRICs", was coined in 2001 by Goldman Sachs economist Jim O'Neill to describe fast-growing economies that he predicted would collectively dominate the global economy by 2050.
The BRICS nations encompass about 27% of the world's land surface and 42% of the global population. Brazil, Russia, India, and China are among the world's ten largest countries by population, area, and GDP (PPP), and are considered to be current superpowers, or potential emerging superpowers. All five states are members of the G20, with a combined nominal GDP of US$28 trillion (about 27% of the gross world product), a total GDP (PPP) of around US$57 trillion (33% of global GDP PPP), and an estimated US$4.5 trillion in combined foreign reserves (as of 2018).
The BRICS were originally identified for the purpose of highlighting investment opportunities and had not been a formal intergovernmental organization. Since 2009, they have increasingly formed into a more cohesive geopolitical bloc, with their governments meeting annually at formal summits and coordinating multilateral policies. Bilateral relations among BRICS are conducted mainly on the basis of non-interference, equality, and mutual benefit.
The BRICS nations are considered the foremost geopolitical rival to the G7 bloc of leading advanced economies, announcing competing initiatives such as the New Development Bank, the BRICS Contingent Reserve Arrangement, the BRICS payment system, the BRICS Joint Statistical Publication and the BRICS basket reserve currency. Since 2022, the group has sought to expand membership, with several developing countries expressing interest in joining. BRICS has received both praise and criticism from numerous commentators.
In August 2023, at the 15th BRICS Summit, South African President Cyril Ramaphosa announced that Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates had been invited to join the bloc. Full membership is scheduled to take effect on 1 January 2024.
History
The BRIC
The term BRIC was originally developed in the context of foreign investment strategies. It was introduced in the 2001 publication, Building Better Global Economic BRICs by then-chairman of Goldman Sachs Asset Management, Jim O'Neill.
The foreign ministers of the initial four BRIC General states (Brazil, Russia, India, and China) met in New York City in September 2006 at the margins of the General Debate of the UN Assembly, beginning a series of high-level meetings. A full-scale diplomatic meeting was held in Yekaterinburg, Russia, on 16 June 2009.
The BRIC grouping's 1st formal summit, also held in Yekaterinburg, commenced on 16 June 2009, with Luiz Inácio Lula da Silva, Dmitry Medvedev, Manmohan Singh, and Hu Jintao, the respective leaders of Brazil, Russia, India, and China, all attending. The summit's focus was on improving the global economic situation and reforming financial institutions, and discussed how the four countries could better co-operate in the future. There was further discussion of ways that developing countries, such as 3/4 of the BRIC members, could become more involved in global affairs.
In the aftermath of the 2009 Yekaterinburg summit, the BRIC nations announced the need for a new global reserve currency, which would have to be "diverse, stable and predictable." Although the statement that was released did not directly criticize the perceived "dominance" of the US dollar – something that Russia had criticized in the past – it did spark a fall in the value of the dollar against other major currencies.
The BRICS: Entry of South Africa
In 2010, South Africa began efforts to join the BRIC grouping, and the process for its formal admission began in August of that year. South Africa officially became a member nation on 24 December 2010, after being formally invited by China to join and subsequently accepted by other BRIC countries. The group was renamed BRICS – with the "S" standing for South Africa – to reflect the group's expanded membership. In April 2011, the President of South Africa, Jacob Zuma, attended the 2011 BRICS summit in Sanya, China, as a full member.
New Development Bank
In June 2012, the BRICS nations pledged $75 billion to boost the lending power of the International Monetary Fund (IMF). However, this loan was conditional on IMF voting reforms. In March 2013, during the fifth BRICS summit in Durban, the member countries agreed to create a global financial institution to cooperate with the western-dominated IMF and World Bank. They planned to set up this New Development Bank by 2014. However, disputes relating to burden sharing and location slowed down the agreements.
At the BRICS leaders meeting in St Petersburg in September 2013, China committed $41 billion towards the pool; Brazil, India, and Russia $18 billion each; and South Africa $5 billion. China, who held the world's largest foreign exchange reserves and contributes the bulk of the currency pool, wanted a more significant managing role. China also wanted to be the location of the reserve. In October 2013, Russia's Finance Minister Anton Siluanov said that creating a $100 billion in funds designated to steady currency markets would be taken in early 2014. The Brazilian finance minister, Guido Mantega, confirmed that the fund would be created by March 2014. However, by April 2014, the currency reserve pool and development bank had yet to be set up, and the date was rescheduled to 2015. One driver for the BRICS development bank is that the existing institutions primarily benefit extra-BRICS corporations, and the political significance is notable because it allows BRICS member states "to promote their interests abroad... and can highlight the strengthening positions of countries whose opinion is frequently ignored by their developed American and European colleagues."
In July 2014, during the sixth BRICS summit in Fortaleza, the BRICS signed the document to create the US$100 billion New Development Bank (formerly known as the "BRICS Development Bank") and a reserve currency pool worth over another US$100 billion. Documents on cooperation between BRICS export credit agencies and an agreement of cooperation on innovation were also inked. The Fortaleza summit was followed by a BRICS meeting with the Union of South American Nations presidents in Brasilia.
Other initiatives
Since 2011, the National Institutes of Statistics of the BRICS group of countries (IBGE, Rosstat, the National Bureau of Statistics of China, the Central Statistics Office (India) and Statistics South Africa) produce an annual joint statistical publication in order to put statistical production in perspective, compare adopted methodologies and statistical results. The publication serves as single data platform for the mutual benefit of participating countries.
Since 2012, the BRICS group of countries have been planning an optical fibre submarine communications cable system to carry telecommunications between the BRICS countries, known as the BRICS Cable. Part of the motivation for the project was the spying of the U.S. National Security Agency on all telecommunications that flowed in and out of United States territory. As of 2023, construction of the proposed cable network has not started.
After the 2015 summit, the respective communications ministers, under a Russian proposal, had a first summit for their ministries in Moscow in October where the host minister, Nikolai Nikiforov, proposed an initiative to further tighten their information technology sectors and challenge the monopoly of the United States in the sector.
In August 2019, the communications ministers of the BRICS countries signed a letter of intent to cooperate in the Information and Communication Technology sector. This agreement was signed in the fifth edition of meeting of communication ministers of countries member of the group held in Brasília, Brazil.
The New Development Bank plans on giving out $15 billion to member nations to help their struggling economies. Member countries are hoping for a smooth comeback and a continuation of economic trade pre-COVID-19. The 2020 BRICS summit was held virtually in St. Petersburg, Russia and discussed how to handle the COVID-19 pandemic and how to fix the multilateral system via reforms. During the 13th BRICS summit, in 2021, Indian Prime Minister Narendra Modi called for a transparent investigation into the origins of COVID-19 under the World Health Organization with the full cooperation of "all countries", and Chinese leader Xi Jinping spoke directly afterwards, calling on BRICS countries to "oppose politicisation" of the process.
In May 2023, South Africa announced that they would be giving diplomatic immunity to Vladimir Putin and other Russian officials so that they could attend the 15th BRICS Summit despite the ICC arrest warrant for Putin. In July 2023, the Russian president announced that he will not personally attend the BRICS summit in Johannesburg on 22–24 August despite good relations with the South African nation. Russian news channels noted that Putin will remotely participate online in all BRICS leaders’ sessions, including its Business Forum, and also deliver his remarks virtually.
2024 expansion
In August 2023, at the 15th BRICS Summit, South African President Cyril Ramaphosa announced that six emerging market group countries (Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates) had been invited to join the bloc. Full membership is scheduled to take effect on 1 January 2024.
The aim of latest expansion is touted as part of plan to build a "multipolar" world order that puts weight to hitherto subdued voices of the Global South and brings them to the centre of the world agenda.
Summits
The grouping has held annual summits since 2009, with member countries taking turns to host. Prior to South Africa's admission, two BRIC summits were held, in 2009 and 2010. The first five-member BRICS summit was held in 2011. The most recent BRICS leaders' summit took place virtually on 23 June 2022 hosted by China. India hosted the BRICS 2021 summit in New Delhi and, amid tensions with China, Chinese leader Xi Jinping had made a soft move by supporting India's Chairmanship in 2021.
BRICS countries
Current members
Bangladesh, Egypt, the United Arab Emirates and Uruguay are members of BRICS New Development Bank.
Application process
Discussions about the expansion and entry of new member countries were little addressed until the early 2020s, after this date, leaders and top ranking diplomats of the founding nations began discussions for the expansion of the group.
There is no formal application process as such to join BRICS, but any hopeful government must receive unanimous backing from all existing BRICS members—Brazil, Russia, India, China, and South Africa—to receive an invitation.
New members
A total of six countries are scheduled to join BRICS on 1 January 2024:
Argentina (opposed by a main opposition presidential candidate)
Egypt
Ethiopia
Iran
Saudi Arabia
United Arab Emirates
Countries that have applied for membership
A total of 14 countries have formally applied to join BRICS, listed as follows:
(applied in 2022) (Expected to join in next expansion)
(applied in 2023)
(applied in 2023)
(applied in 2023)
(applied in 2023)
(applied in 2023)
(applied in 2023)
(applied in 2023)
(applied in 2023)
(applied in 2023)
(applied in 2023)
(applied in 2023)
Potential further expansion
In addition, Afghanistan, Angola, Comoros, DR Congo, Gabon, Guinea-Bissau, Myanmar, Nicaragua, North Korea, Pakistan, Sudan, Syria, Tunisia, Turkey, Uganda, and Zimbabwe have expressed interest in membership of BRICS. Morocco was alleged to have joined but denied that it had applied.
Financial architecture
The financial architecture of BRICS is made of the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA). These components were signed into treaty in 2014 and became active in 2015.
New Development Bank
The New Development Bank (NDB), formally referred to as the BRICS Development Bank, is a multilateral development bank operated by the five BRICS states. The bank's primary focus of lending is infrastructure projects with authorized lending of up to $34 billion annually. South Africa hosts the African headquarters of the bank. The bank has a starting capital of $50 billion, with wealth increased to $100 billion over time. Brazil, Russia, India, China, and South Africa initially contributed $10 billion each to bring the total to $50 billion. As of 2020, it had 53 projects under way worth around $15 billion.
In 2021, Bangladesh, Egypt, the United Arab Emirates and Uruguay joined the NDB.
BRICS Contingent Reserve Arrangement
The BRICS Contingent Reserve Arrangement (CRA) is a framework for providing protection against global liquidity pressures. This includes currency issues where members' national currencies are being adversely affected by global financial pressures. Emerging economies that experienced rapid economic liberalization went through increased economic volatility, bringing an uncertain macroeconomic environment. The CRA competes with the International Monetary Fund (IMF). Along with the New Development Bank, it is an example of increasing South-South cooperation. It was established in 2015 by the BRICS countries. The legal basis is formed by the Treaty for the Establishment of a BRICS Contingent Reserve Arrangement, signed in Fortaleza in July 2014. With its inaugural meetings of the BRICS CRA Governing Council and Standing Committee, held on 4 September 2015, in Ankara, Turkey it entered into force upon ratification by all BRICS states, announced at the 7th BRICS summit in July 2015.
BRICS payment system
At the 2015 BRICS summit in Russia, ministers from BRICS nations initiated consultations for a payment system that would be an alternative to the SWIFT system. The stated goal was to move to settlements in national currencies. The Central Bank of Russia highlighted the main benefits as backup and redundancy in case there were disruptions to the SWIFT system.
China also launched its own alternative to SWIFT: the Cross-Border Interbank Payment System, which enables financial institutions worldwide to send and receive information about financial transactions. India also has its alternative Structured Financial Messaging System (SFMS), as do Russia SPFS and Brazil Pix.
Potential common currency
BRICS countries committed to study the feasibility of a new common currency or similar, at the 2023 BRICS summit in South Africa. Fair and easier international trade as well as a major reduction in costs of transactions would be some of the reasons why the countries could forge a currency union.
Reception
In 2012, Hu Jintao, the then General Secretary of the Chinese Communist Party and President of China, described the BRICS countries as defenders and promoters of developing countries and a force for world peace. Western analysts have highlighted potential divisions and weaknesses in the grouping, including significant economic instabilities, disagreements among the members over the UN Security Council reform, and India and China's disputes over territorial issues.
On 9 April 2013, Isobel Coleman, director of the Civil Society, Markets, and Democracy Program at the Council on Foreign Relations, claimed that the BRICS members share a lack of consensus. They uphold drastically different political systems, from a vibrant democracy in Brazil to entrenched oligarchy in Russia, and their economies are little integrated and are different in size by orders of magnitude. She also claimed that the significant difference in GDP influences the reserves: China accounts for over 41% of the contribution, which in turn leads to its bigger political say within the association.
In 2014, the Indian Marxist author Vijay Prashad raised the limitations of the BRICS as a political and economic "locomotive of the South" because they follow neoliberal policies. They have established neither new counter-balancing institutions nor come up with an alternative ideology. Furthermore, the BRICS project, argues Prashad, has no ability to challenge the primacy of the United States and NATO.
After the 2023 BRICS Summit, Con Coughlin, defence and foreign affairs editor at The Daily Telegraph, claimed "the challenge BRICS presents to the established world order seems destined to failure" and accused the organization of being used by China as a vehicle for expanding its global influence. Coughlin also noted the contradictions within the organization, such as the border dispute between China and India, and called for greater Western engagement with India as part of a new strategic alliance.
A multi-year study at Tufts University found that the "common portrayal of BRICS as a China-dominated group primarily pursuing anti-U.S. agendas is misplaced ... The BRICS countries connect around common development interests and a quest for a multipolar world order in which no single power dominates. Yet BRICS consolidation has turned the group into a potent negotiation force that now challenges Washington's geopolitical and economic goals".
BRICS Pro Tempore Presidency
The group at each summit elects one of the heads of state of the component countries to serve as President Pro Tempore of the BRICS. In 2019, the pro tempore presidency was held by the president of Brazil.
The theme of the 11th BRICS summit was "BRICS: economic growth for an innovative future", and the priorities of the Brazilian Pro Tempore Presidency for 2019 are the following – Strengthening of the cooperation in Science, technology and innovation; Enhancement of the cooperation on digital economy; Invigoration of the cooperation on the fight against transnational crime, especially against organized crime, money laundering and drug trafficking; Encouragement to the rapprochement between the New Development Bank (NDB) and the BRICS Business Council. Currently the new President Pro Tempore is Russia and their goals are: investing into BRICS countries in order to strengthen everyone's economies, cooperating in the energy and environmental industries, helping with young children and coming up with resolutions on migration and peacekeeping.
Current leaders
See also
BRICS Games
Emerging and growth-leading economies
Emerging power
List of BRICS summit attendees
List of country groupings
List of multilateral free-trade agreements
MIKTA
Potential superpowers
Shanghai Cooperation Organisation
Notes
References
External links
BRICS information portal
BRICS India 2021
BRICS China 2022
BRICS South Africa 2023
Learn about BRICS - Institute of Applied Economic Research
2000s neologisms
2009 in international relations
Organizations established in 2009
Economic country classifications
International political organizations
International economic organizations
Multilateral relations of Brazil
Multilateral relations of China
Multilateral relations of India
Multilateral relations of Russia
Multilateral relations of South Africa
Brazil–China relations
Brazil–India relations
Brazil–Russia relations
Brazil–South Africa relations
China–India relations
China–Russia relations
China–South Africa relations
India–Russia relations
India–South Africa relations
Russia–South Africa relations