The BRICS nations were supposed to have the fastest-growing economy, but that hasn't quite happened. Instead, the alliance is now providing a diplomatic venue and finance for growth, outside of the mainstream of the West.
The initials of the acronym came to stand for what at the time were the world's fastest-growing economies. However, the BRICS countries—Brazil, Russia, India, China, and South Africa—are now positioning themselves as rivals to the current global financial and political platforms.
"According to Günther Maihold, deputy director of the German Institute for International and Security Affairs, or SWP, "the foundation myth of the developing economies has vanished." The geopolitical time for the BRICS nations is now.
As "an alternative paradigm to the G7," Brazil, Russia, India, China, and South Africa are attempting to establish themselves as representatives of the Global South.
The G7 was established in 1975 as an "informal forum" of the heads of state from the seven most developed nations. Along with the EU, members include Germany, France, the United Kingdom, Italy, Japan, Canada, and the United States.
The acronym BRIC, which initially stood for Brazil, Russia, India and China, was coined by Jim O'Neill in 2001 when he was chief economist of the multinational investment bank, Goldman Sachs. At the time, the four countries had sustained rates of high economic growth and the BRIC label stood for economic optimism about the future of those nations. Opponents of the label said the countries were too diverse to be grouped together like this and that it was really just a Goldman Sachs marketing ploy.
However, what may have begun as a marketing gimmick to entice investors has developed into a forum for intergovernmental collaboration akin to the G7. The four countries came together in Yekaterinburg, Russia, for their inaugural summit in 2009. South Africa was asked to join in 2010, giving BRICS an "S."
putting the World Bank model to the test
The BRICS countries established the New Development Bank in 2014 as a rival to the World Bank and the International Monetary Fund with $50 billion (about €46 billion) in seed funding. To assist members having trouble making payments, they also developed a liquidity mechanism called the Contingent Reserve Arrangement.
These offers were not only attractive to the BRICS nations themselves but also to many other developing and emerging economies that had had painful experiences with the IMF's structural adjustment programs and austerity measures. This is why many countries said they might be interested in joining the BRICS group.
The BRICS bank is open to new members. In 2021, Egypt, the United Arab Emirates, Uruguay and Bangladesh took up shares. However, these were much lower than the respective $10 billion investments made by the bank's founding members.
ready to grow
According to South African Foreign Minister Naledi Pandor, there is "massive" interest in the BRICS nations.
She revealed to television journalists at the beginning of March that she had 12 letters on her desk from interested nations.
One of them, she noted, is Saudi Arabia. "United Arab Emirates, Egypt, Algeria, Argentina, Mexico, and Nigeria," he added.
She noted that the issue would be placed on the agenda for the upcoming August summit in South Africa and added, "Once we've set the criteria [for loan], we will then make a choice."
The foundational illusions upon which the BRICS group was created have little bearing on the most recent economic developments in BRICS member states. Only China has shown consistent and significant growth among the five countries since that time.
Brazil, South Africa, and Russia's economies all experienced economic stagnation as China's gross domestic product increased from $6 trillion in 2010 to approximately $18 trillion in 2021. India's GDP increased from $1.7 trillion to $3.1 trillion, while China's expansion exceeded it.
There are none against Russia.
The BRICS nations have become more apart from the so-called West since the beginning of the Russian war in Ukraine. India, Brazil, South Africa, and China do not participate in the sanctions imposed on Russia. The near-historic levels of trade between India and Russia or Brazil's reliance on Russian fertilizer have made this more obvious.
Political scientist Matthew Bishop from the University of Sheffield wrote for the Economics Observatory late last year that "diplomatically, the war in Ukraine looks to have formed a strong dividing line between an eastern-backed Russia and the West." As a result, some US and European politicians are concerned that the BRICS may diverge from their original purpose of being an economic club of emerging nations striving to influence global growth and development.
German Institute for International and Security Affairs' Maihold concurs. According to him, the BRICS alliance is more of a venue for expanded sovereign and autonomous thought than it is a direct challenge to the West. He thinks South Africa, India, and Brazil are "vying for better terms" in a bipolar world.
Maihold continued by citing Beijing's offers to mediate the conflict in Ukraine and the combined military drills it performed with Russia in South Africa as evidence that China, on the other hand, is exploiting the platform for its international political goals.
Maihold thinks that the West is attempting to reverse this shift in strategy after noticing it. They are closely scrutinizing, he said. "They made a point during the G7 conference in Germany in 2022.
The translation of this article is from German.
Note from the editor: In the article's previous top picture, Jair Bolsonaro, the former president of Brazil, was pictured holding a virtual meeting with other BRICS leaders. It was replaced with an image of Brazil's current president, Lula da Silva, on March 29, 2023.