BRICS does often act more as a geopolitical entity than an economic one, and the addition of newer members would aid in countering the Western clout
Published Date – 11:45 PM, Wed – 25 October 23
By Rosemary Kurian, Dr Karamala Areesh Kumar
BRICS has emerged as a key strategic grouping in recent years, showing promise in its ability to potentially counter the Global North. While it might have not fully succeeded economically, owing to stagnant economies and failure to establish its clout in Western-led international financial organisations, it has reoriented itself into a dynamic grouping that can be economic, geopolitical and strategic. With renewed agendas in the form of its own financial institutions and currency, BRICS is capable of rising as a formidable representative of the Global South, especially with newer strategic memberships.
After years of failing to find its place in international relations amid hundreds of other regional and transnational organisations and groupings, BRICS started making headlines again with discussions over the inclusion of newer members to expand the group’s scope. With such renewed potential, the strategic grouping of the Global South, which comprises over 40% of the global population and 31% of its GDP as per the World Factbook, seems to be a formidable counterforce to the global order as designed by the Global North.
Finding its footing in a Goldman Sachs paper by chief economist Jim O’Neill, the leaders of the four rising powers of the developing world – Brazil, Russia, India and China – came together as a strategic grouping under the banner of BRIC (later including South Africa in 2010), (Saudi Arabia-Argentina-Iran, Ethiopia-Egypt-UAE members from 2024) often being compared to the G7 – a group comprising the world’s most developed countries. Jim O’Neill predicted in his paper in 2003 that the four rising economies had growth rates faster than those of the G7 economies and would soon overtake their GDPs by 2040.
Based on countercurrents.org, the BRICS economies did surpass the GDP of the G7 economies based on PPP, with a contribution of 31.5% over the G7’s 30.7% of the global GDP. O’Neill, however, reflected on the failure of the grouping after two decades of the idea’s conception.
The Motive
While BRICS might have surpassed the G7 in terms of GDP, his prediction that the first four countries would emerge as a global force in changing the economic order failed to stand. Further, the growth of BRICS is largely heralded by China’s growing GDP, and to some extent, that of India, while Brazil and Russia struggle with stagnant economies fully dependent on resource exports.
While the 2008 economic crisis affected all these countries, China and India recuperated, while Brazil and Russia failed to show promises of growth. For Brazil, many predicted it to be due to its unfavourable business and entrepreneurial environment, tax system and government intervention (or lack thereof), while Russia faced consequences of flawed government plans post the 2008 crisis, followed by the pandemic and Ukraine conflict.
The question remains as to why O’Neill chose these four countries, when Indonesia, the Philippines, Taiwan and several others were rising economies too. The motive was merely to create an investment model. He hoped for them to be a formidable economic force, a prediction they failed to live up to, especially since the greater representation of the developing world in the IMF and World Bank never became a reality. However, that does not mean that BRICS has failed. Its proof lies in the several ambitious plans that the grouping has set forth, with the potential of changing economic attention to the Global South.
Banking on Growth
Contrary to the Western-oriented demands of the World Bank and the IMF, BRICS successfully introduced the New Development Bank (NDB) in 2015, with an authorised capital of $100 billion, to be loaned to developing countries to promote economic growth and multilateral development in the Global South. This is supported by the BRICS Contingent Reserve Arrangement, which provides support to countries facing short-term balance of payment pressures through liquidity and security instruments, much like the IMF.
With alternative financial structures like the NDB, and the Asian Infrastructure Investment Bank (AIIB), which are multilateral economic institutions countering the IMF and World Bank, the developing world would face reduced pressures in the future to align with American principles induced by debt or bailout pressures. The Russian-led initiative to introduce a BRICS currency to replace the need for trading in dollars in the region is another sign of efforts to counterbalance American economic hegemony.
This, when put into effect, can bring significant changes in the economic dynamics of international politics. So, while nothing except their economic growth holds the BRICS countries together, they have the potential to become a larger group representing the developed world, increasing in global GDP contribution with each added member, to create a counterbalance to Western economic hegemony and change the regional world order.
Platform for Voice
Another intention for countries wishing to join the BRICS might be due to the Cold War-like environment induced by the US-China rivalry focused on the Global South. BRICS gives them a platform to focus on their developmental goals and voice their opinions, and while China might be a member of it, it hasn’t yet indicated any such agenda to divert the politics of the grouping to one favourable to its hegemonic wishes.
However, keeping in mind the potential political rivalry, BRICS does often act more as a geopolitical entity than an economic one, and the addition of newer members, who’ve demanded admission, including Indonesia, Saudi Arabia, Iran, Argentina, Egypt, Bahrain and Algeria, would aid in the members’ agenda to counter the Western clout in global organisations, including the United Nations.
While everything works favourably for the BRICS to emerge as a rising group transforming the regional world order and potentially the dynamics of international relations through its multilateralism and focus on the Global South, the strategic admission of states plays a key role in determining the future of the grouping. As long as admission is not limited to agendas favouring particular states – a point of contention in current discussions among foreign ministers of BRICS countries – BRICS seems to be on a path favouring the fulfilment of its dynamic agenda in creating a multilateral world order with the extension of its membership.
