What is BRICS?

BRICS is a group of five major emerging countries – Brazil, Russia, India, China and South Africa. These countries are all at a similar stage of newly advanced economic development. They are known for their large, fast-growing economies and significant influence on regional affairs. BRICS also refers to the informal yearly summit between these nations.

The grouping began in 2001 with just four countries: Brazil, Russia, India, and China (BRIC). 2010, South Africa joined, adding the “S” to BRICS.

Why was BRICS created?

The countries wanted to solve common problems and form a political alliance. Their goal is greater participation in global economics and politics. As a group, their voice is louder and carries more weight.

Like the United States, BRICS countries felt that developed Western economies unfairly dominated the global economic system. Coming together gives them more power to promote their interests.

Each BRICS country is unique, but they share some traits:

• Large populations
• Rapidly growing economies
• The desire for more representation in global institutions like the United Nations, World Bank, and IMF

BRICS summits

Leaders from the BRICS countries meet every year at informal summits. The location rotates between the five member states. Major global issues are discussed. Recent summit topics have included:

• Economic cooperation
• Global development
• Anti-terrorism efforts
• International conflicts
• Climate change

The group aims to promote peace, security, development and cooperation. No binding decisions are made. But the summits help align policies and build consensus.

New Development Bank

At the 2014 BRICS summit, the five nations created the New Development Bank (NDB). The bank aims to fund infrastructure and sustainable development projects in BRICS and other emerging economies.

The NDB’s initial authorized capital is $100 billion. It’s headquartered in Shanghai, China. All five BRICS members have equal shares and voting rights in the bank. This structure aims for a more equitable balance of power compared to Western-led institutions.

The bank is seen as an alternative to the World Bank and International Monetary Fund (IMF). BRICS felt these bodies were too dominated by developed countries and served their interests.

Importance of BRICS countries

The five BRICS countries are home to over 40% of the world’s population. As of 2021, they accounted for:

• Nearly a quarter of global GDP
• 16% of world trade
• Around 40% of foreign exchange reserves

Their rapid economic growth has increased their weight in the global economy. China and India are now two of the world’s largest economies. The group’s rising clout gives it more say on the international stage.

Varied strengths

Each BRICS country has different strengths that benefit the group:

• Brazil is rich in natural resources like oil, metals and timber
• Russia is a top energy exporter with vast oil and gas reserves
• India is a fast-growing tech hub with a large young workforce
• China is the world’s biggest manufacturer and exporter
• South Africa has abundant mineral resources like gold and platinum

These diverse assets mean BRICS countries can be valuable trading partners for each other. They depend less on Western markets, making them more resilient to global shocks.

Challenges facing BRICS

The BRICS countries also face some common challenges:

• Large income inequality gaps
• Infrastructure and development needs
• Managing environmental issues alongside rapid growth
• Ensuring growth benefits all citizens, not just elites

The group tries to work together on solutions and policy coordination. But domestic politics can complicate this. The countries have quite different political systems, from India’s democracy to China’s one-party state.

There are also economic differences. China’s economy is far larger than the other four. This imbalance makes it hard to find common ground at times.

Competition between members

While BRICS countries aim to work together, there is also competition between them. They can clash over influence in their regions and access to resources. Examples include:

• Brazil and India compete in trade, like the steel sector
• China and India have border disputes and vie for regional dominance
• Russia and China can be economic rivals but also need each other
• South Africa faces cheap imports from China which threaten local industries

Balancing cooperation and competition isn’t always easy for BRICS. Different national interests can pull them in opposing directions. But shared goals like development and multipolarity tend to bring them back together.

Outlook for BRICS

Most analysts believe BRICS will continue to gain global influence in the coming years. Their shares of world GDP, trade and investment are forecast to keep rising.

The BRICS economies were hit by the COVID-19 pandemic like everyone else. But they are expected to rebound faster than many developed economies. China and India could see especially rapid recoveries.

As engines of global growth, BRICS countries will play a key role in the post-pandemic economy. Their large domestic markets and ties to other emerging economies could help drive a worldwide recovery.

Growing voice in global governance

BRICS is also seeking a greater voice in international organizations and global rulemaking. It sees the current system as outdated and unrepresentative. For example, the group wants reforms to give developing nations more voting rights in the IMF.

BRICS could potentially reshape some global institutions to be more inclusive of emerging powers. Whether the West accepts this is another matter. Expect continued efforts by BRICS to boost its clout in bodies like the UN, WTO and G20.

The group stresses it wants to reform, not overturn, the international system. It sees a constructive role for itself in building a more multipolar, balanced world order. How this vision plays out in practice remains to be seen.

The relationships built between BRICS countries will be key to watch. If they can settle differences and stay united, their collective standing will grow. But economic rivalry or political disputes could undermine the group’s cohesion and global aims.

However BRICS evolves, its voice in world affairs is set to get louder still. The West will need to adapt to a global order shaped increasingly by the ‘rising rest’.