What Is BRICS And Why It Matters To The World Order?

The BRICS alliance, comprising Brazil, Russia, India, China, and South Africa, has emerged as a formidable force especially now in 2024. The concept of BRICS, originally coined as “BRIC” in 2001 by Goldman Sachs economist Jim O’Neill, highlighted the economic potential of these emerging markets. O’Neill’s analysis projected that these economies, if their growth trajectory continued, could potentially dominate the global economy by 2050.

The acronym gained traction and in 2006, the foreign ministers of the initial BRIC countries met on the sidelines of the United Nations General Assembly, marking the beginning of a series of high-level meetings. The first formal BRIC summit took place in Yekaterinburg, Russia, in 2009, with South Africa joining the following year, leading to the renaming of the group as BRICS.

The alliance functions as a multilateral framework, facilitating cooperation in various areas like trade, finance, security, and cultural exchange. Regular summits, ministerial meetings, and working groups serve as platforms for collaboration and coordination among member states. Of late, BRICS has expanded its agenda to include issues like climate change, sustainable development, and global health, demonstrating its commitment to addressing global challenges collaboratively.

According to Al Jazeera, the bloc expanded its membership to include Egypt, Ethiopia, Iran and the United Arab Emirates (UAE) last January 2024.

Balancing the world order 

The way I see it, BRICS is challenging the Western hegemony via three pillars—economic power, geopolitical influence, and cultural/soft power. Economically, BRICS boasts a combined GDP that rivals that of the G7, and its trade volumes are substantial. The establishment of the New Development Bank (NDB) back in 2014 further solidified BRICS’ economic clout, providing an alternative to Western-dominated financial institutions like the World Bank and IMF. BRICS is also actively promoting alternative currencies and financial systems which are ‘almost there now’, challenging the dominance of the US dollar. This challenge is further accentuated by the weakening of the dollar, fueled in part by the expiration of the petrodollar ‘agreement’ between the USA and Saudi Arabia, which historically bolstered the dollar’s global supremacy.

BRICS’ economic threat and G7 hypocrisy

According to some, the rise of BRICS poses a significant economic threat to the G7 nations. The BRICS economies are growing at a faster rate than their G7 counterparts, and their share of global GDP is steadily increasing. This economic power is translating into greater political influence, as BRICS nations leverage their economic strength to secure favourable trade deals and shape global economic policies. Moreover, the creation of alternative financial institutions like the NDB, the de-dollarisation initiatives and the potential for new BRICS-led trading blocs could further undermine the economic dominance of the G7.

At the same time, this economic threat also exposes the hypocrisy of the existing world order, dominated by G7 nations. The Ukraine-Russia war and the Palestine invasion by Israel made it obvious. These countries have long championed free trade and globalisation, yet they often resort to protectionist measures and economic sanctions when their own interests are threatened. The BRICS alliance, on the other hand, is advocating for a more equitable and inclusive global economic system, one that provides greater opportunities for developing nations and challenges the entrenched privileges of the West. This commitment to a fairer system is evident in BRICS’ recent announcement of developing its own independent payment system, free from political pressure, abuse, and external interference. This move aims to reduce reliance on Western-controlled financial infrastructure and provide a secure and reliable alternative for international transactions.

While BRICS’ rise presents a challenge to the traditional Western-led order, it’s important to acknowledge the significant contributions of G7 nations in shaping the world as we know it. The G7 has played a crucial role in promoting democracy, human rights, and free markets globally—although some of these can definitely be better. Its member countries have been at the forefront of technological innovation, scientific research, and cultural development. They have also contributed significantly to humanitarian aid and disaster relief efforts worldwide.

BRICS’ growing influence in Asia and Africa

The influence of BRICS is particularly pronounced in Asia and Africa. With China and India as members, BRICS already holds significant sway in Asia, both economically and politically. BRICS’ focus on infrastructure development and South-South cooperation aligns with the needs and aspirations of many Asian nations. Additionally, the bloc’s growing economic clout and alternative development model offer attractive options to countries seeking to diversify their partnerships and reduce dependence on Western powers.

In Africa, BRICS’ impact is also evident. China’s Belt and Road Initiative, for example, has funded numerous infrastructure projects across the continent, while India’s historical ties and growing economic presence are strengthening its engagement with African nations. The NDB is also playing a crucial role in financing development projects in Africa, contributing to the continent’s economic growth and integration into global markets.

As BRICS expands its influence, the geopolitical landscape of Asia and Africa is shifting. Traditional alliances and allegiances are being re-evaluated, as countries seek to balance their relationships with both Western powers and BRICS nations. The growing appeal of BRICS’ model of development, based on non-interference, mutual respect, and win-win cooperation, is attracting countries that are seeking a more equitable and independent path to prosperity.

BRICS and its positioning

The rise of BRICS has sparked hope among many countries, especially in the Global South and Africa. These nations, often marginalised in the traditional Western-led global order, see BRICS as a platform for amplifying their voices, accessing development finance, and pursuing economic growth on their own terms. The New Development Bank, for instance, is providing much-needed funding for infrastructure projects in developing countries, without the stringent conditions often attached to loans from Western institutions. BRICS’ advocacy for a more equitable global governance system also resonates with many in the Global South who feel their interests have been neglected in traditional forums.

In the conflicts like in Syria, Ukraine and Palestine, BRICS has often taken a different political stance from Western powers, advocating for peaceful resolutions and respecting national sovereignty. This approach is seen by some as a challenge to the interventionist policies often pursued by Western nations. The bloc is often seen actively involved in mediating conflicts and promoting dialogue unlike G7. This diplomatic engagement somewhat challenges the traditional role of Western powers as the primary mediators in international conflicts.

BRICS’ recent announcement to develop its own independent payment system is a direct challenge to the SWIFT system, which is often used as a tool of economic coercion by Western powers. This new payment system could enhance the financial autonomy of BRICS nations and their partners. This will be further complemented by the creation of NDB. The bank is providing an alternative source of financing for development projects, reducing the dependence of developing countries on Western-led institutions. This helps to boost cooperation between its bloc members in the energy sector, exploring joint ventures in oil and gas exploration, renewable energy development, and energy efficiency. Again, this cooperation could reduce their dependence on Western energy sources and strengthen their energy security.

The obstacles

Economic sanctions, political pressure and military alliances could be among the areas the BRICS countries may face challenges from. And, this could be significant. From the internal side, the member nations have diverse political systems, economic structures, and national interests, making consensus difficult to achieve. These could be some of the main challenges BRICS, as a bloc of sovereign countries, must navigate these challenges carefully to maintain its unity and effectiveness.

The future

I am not good at predicting the future. No one is. Yet it is good to see that we are balancing the world order with G7 on the other end. The way I look at BRICS today, the bloc could expand to include new members like Turkey, Indonesia, Saudi Arabia or Mexico, further enhancing its influence. It could deepen cooperation in areas like trade, technology, and defense, creating a more integrated bloc. There will be challenges among the countries that could trigger something unproductive or external pressure that might weaken its cohesion, however BRICS will definitely continue to refine its narratives for a better future for the people.

Regardless of the specific trajectory, BRICS’ rise has significant implications for the global order. It is contributing to a more multipolar world, where power is less concentrated in the hands of Western nations. It is fostering greater South-South cooperation, providing an alternative model of development and challenging Western dominance in international institutions. It could also lead to new conflicts and power struggles as BRICS asserts its influence on the global stage.

In short, the BRICS alliance is more than just an economic bloc; it is a geopolitical force that is reshaping the world order. The rise of BRICS signifies a shift in global power dynamics, with the potential for a more diverse and representative international landscape. While the G7’s contributions to global development cannot be discounted, the BRICS alliance offers a promising alternative model for the future.