The odd assortment of nations—Brazil, Russia, India, China and South Africa—don’t have much in common. And the bloc has rarely been taken seriously unlike the more prosperous G20. But many are wondering—and worried—if that’s going to change.
Umm, wtf is BRICS?
Origin story: It all started with a 2001 paper by Goldman Sachs chief economist Jim O'Neill. He coined the acronym to capture the collective clout of four of the largest developing countries: Brazil, Russia, India and China (hence, BRIC). But in 2009, the four countries decided to make O’Neill’s somewhat arbitrary grouping a reality. The first summit was held in Russia—which was the main driver of the initiative. Moscow wanted to create a bloc that would challenge a US-dominated world order. In 2011, South Africa joined the party—changing the acronym to BRICS.
An unremarkable history: Ever since its institution, the bloc has pottered along—meeting every year but to little effect. The only significant achievement of BRICS: setting up the New Development Bank—the first global financial institution not dominated by the West. Since 2015, it has lent $33 billion to more than 96 development projects in the BRICS nations—and expanded its membership to include the United Arab Emirates, Egypt and Bangladesh. Recent reports suggest Saudi Arabia wants to come on board as well.
But, but, but: The countries collectively account for more than 40% of the world population and a quarter of the global economy. If BRICS nations did act together, they would be impossible to ignore.
So why is BRICS suddenly important now?
Because of the emerging cold war between the US-led Western allies and the growing Russia-China alliance. Both Beijing and Moscow are pushing to turn BRICS into a powerful global institution. And there is a real opportunity to do so at the current summit in Johannesburg.
Expanding BRICS: 23 nations have formally applied to become members. These include everyone from Iran to Saudi Arabia, Argentina, and Indonesia. The key reason:
They view BRICS as an alternative to global bodies viewed as dominated by the traditional Western powers and hope membership will unlock benefits including development finance, and increased trade and investment. Dissatisfaction with the global order among developing nations was exacerbated by the COVID-19 pandemic when life-saving vaccines were hoarded by the rich countries.
Potential members include extremely wealthy oil-producing nations in the Middle East and elsewhere. Their entry would certainly transform BRICS into a serious counter-force to the West.
All in favour: South Africa has invited more than 60 heads of state and government to the summit—in a bid for expansion. But the biggest proponent of expansion is Beijing—and Xi is in Johannesburg to make the case in person. At BRICS’ birth, Russia was the most keen to establish a counterforce to the US. This time around it has company in China. The Chinese view: “If we expand BRICS to account for a similar portion of world GDP as the G7, then our collective voice in the world will grow stronger.”
China experts say BRICS is just a stepping stone toward a far more ambitious goal:
Xi Jinping is not trying to out-compete America in the existing liberal international order dominated by the US. His long-term goal is to change the world order into a Sino-centric one. it makes sense for China to engage with the Global South, (which is) much more numerous than Western democracies and mostly authoritarian in governance structure.
Odd thing to note: Despite Xi’s enthusiasm, he did not personally deliver his speech. His Commerce Minister Wang Wentao read it out instead. No one knows why.
Also a no-show: Vladimir Putin—who is the only member of BRICS who could not attend the forum in person. The reason: an arrest warrant from the International Criminal Court for war crimes in Ukraine. But in his virtual remarks, he echoed Beijing’s line—telling members BRICS “should become a trading bloc representing the ‘global majority’.”
What does India think about any of this?
New Delhi has little interest in expanding membership—or creating an anti-Western bloc:
But in the run-up to the summit New Delhi has clashed with Beijing over the expansion. Tensions are mounting over whether the BRICS should be a non-aligned club for the economic interests of developing countries, or a political force that openly challenges the West, said people briefed on India and China’s positions.
That’s because any expansion would favour China—which has double the GDP of other states—and an isolated Russia entirely dependent on its favours. New Delhi has an entirely different worldview:
For India, BRICS has been an important forum to seek its vision of a “multipolar” world order. Equality between the members has been a fundamental characteristic of the bloc, and an expansion could threaten to disrupt this balance by pitting New Delhi against Beijing.
Also this: “India, which is slowly but surely pivoting to the West, has no real desire to get caught in the geopolitical cross-fire between China and the United States.”
In India’s corner: Brazil—which has no interest in losing its clout in the five-nation bloc either.
What would a bigger BRICS do?
There is a lot of ambitious talk—especially about creating a BRICS currency—to counter the US dollar. It would be backed by gold and prevent Washington from using its currency as a weapon to punish countries—as it has with Moscow. While this plan seems to be unfeasible for now, it is likely that member nations will set up non-dollar trade agreements. As Brazilian President Lula asked: “Why does Brazil need the dollar to trade with China or Argentina? We can trade in our currency.” New Delhi—which had been buying Russian oil in rupees—would certainly like that.
Quote to note: Experts aren’t sure what this summit will achieve, but they have no doubts about its seriousness:
This is probably the first serious meeting; the first meeting where issues of making BRICS into a more effective organisation will be addressed. I think there is now much more serious effort on the part of the countries to make BRICS into something kind of more substantial and to make it into a group that can actually cooperate between each other and can represent the interests of each other.
The bottomline: There is no doubt that the power balance is shifting away from the West. A bigger and more assertive BRICS will be part of that turning tide:
For the BRICS to remain viable and make an increasing impact, it is not necessary that its core members be close friends but that they see a common interest. Forming a coalition with Russia and China gives Global South states leverage in their dealings with the US-led West. It also helps generate a more multipolar world, long a goal of the South’s middle powers.
Reading list
Reuters and Deutsche Welle have excellent guides to BRICS. You can read the original O’Neill paper coining the acronym here. Washington Post has the best overview of the current summit. Lowy Institute lays out all the reasons why India is not keen on expansion. CNN has more on the stakes for Xi. Both Indian Express and Times of India have good columns on why India shouldn’t bet on BRICS—but both are paywalled. Two counterviews on the potential of a BRICS currency: Daniel Moss in Bloomberg News calls it a pipe dream. Michael Roach at the Lowy Institute thinks de-dollarization is inevitable. Al Jazeera looks at what BRICS could mean for the Global South.
