TURKISH CENTER  for ASIA PACIFIC STUDIES

Twenty-three years ago, the idea of creating an economic block was proposed. Accordingly, four emerging economies of the world, namely Brazil, Russia, India, and China, were grouped into the BRIC economic block. Later, South Africa joined the BRIC, and the block became known as the BRICS countries. Today, BRICS nations have been contributing significantly to the growth and development of the global economy. The stakes are higher now than ever because emerging economies are more central to the global economy. The purpose of creating the block was to help accelerate the world’s economic growth and to fill the gap left by the West.

As of today, the block accounts for nearly 35 per cent of the global GDP and 50 per cent on a purchasing power parity (PPP) basis. BRICS nations make up 40 per cent of the world population, and in terms of the nominal Gross Domestic Product, BRICS stands at US $16 trillion.

The BRICS economies are on their way to increasing relations with less developed countries through South-South cooperation, especially the roles of China and India in the socio-economic development of the African continent.

The creation of the BRICS Bank is the most significant contribution of the economic block, and it is believed to be an alternative to the IBRD or World Bank and Asian Development Bank in the long run. Similarly, establishing the AIIB is another milestone in the history of the alternative monetary system. The latest accomplishment of the BRICS block is setting up a “foreign exchange reserves pool” of US$ 100 billion, which will help member countries with dollar liquidity in times of crisis. These initiatives by the BRICS nations are considered significant contributions to accelerating economic growth and development of the global economy and developing economies. They may compel multilateral institutions to bring a balanced approach and make necessary reforms for which the BRICS economies are insisting.

The BRICS plus format has a chance to become a new model of global relations, which are above the dividing “east-west” or “north-south” lines. The members respect national specifics, do not interfere with each other’s domestic affairs, and want to live peacefully. There is a saying that “coming together is the beginning, staying together is progress, and working together is success”. BRICS will likely remain an effective and efficient multilateral forum in the multi-polar global order.

The newly initiated “BRICS plus” strategy is one of the most prominent phenomena of the year and even the middle-term period, with strategic global implications. The “BRICS plus” strategy could provide needed political support, the economic framework and mechanisms for South-South cooperation, and a geopolitical shift towards a multipolar global order. The enlarged BRICS, starting from the first day of 2024, represents a powerful and united group of developing nations that can more effectively represent and realize the interests of the Global South on global agendas.

At the 15th BRICS summit in Johannesburg, South Africa, over 40 countries expressed interest in joining BRICS, and 23 formally applied to join. The expansion they chose to make has geo-economic, geostrategic, and geopolitical logic and effect. Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates were invited to join as full members starting January 1, 2024. Beyond that, several strategic shifts were made. One was the creation of more opportunities to trade with each other using national currencies and avoiding using US$. When selecting new members, the original BRICS members wanted the bloc to be more potent on energy security terms. The new members' choice proved BRICS’s intention to provide energy security for the block and become an important player in that field, able to avoid sanctions and other volatilities of the global market. By financially and politically empowering the New Development Bank (“BRICS bank”), the group proved its mission as an additional and substantial financier of the Global South.

The enlarged BRICS will have even more potential to require global governance institutions and framework reforms towards their transformation into ones that serve the interests of the vast majority and the whole Global South. In that sense, empowered by new members and a long list of potential ones, BRICS sends a crucial message to the Global North and its institutions.

The block has a diversified set of goals. Brazil emphasizes collaborating in shaping the Asian century, despite its geographical location. Russia sees BRICS as a geopolitical counterweight to the eastward expansion of the Atlantic system. India considers BRICS as a useful bridge between its increasing status as a rising and leading power. China sees the block as an important vehicle for needed governance. South Africa views the block as a means to legitimize its role as a gateway to and powerhouse of the African region.

During its early years of existence, BRICS was considered an effective and efficient platform for promoting the required cooperation in the field of financial and investment areas. The creation of the New Development Bank and Contingent Reserve Arrangement were two significant realities that are playing a vital role in rebuilding the economies of the block. Today, it has emerged as one of the strategic and vital platforms for increasing multilateral cooperation among member countries as well as other developing economies.

BRICS summits are playing a significant role in enhancing the existing potential and opportunities for the member countries and developing countries in general. These summits are efficient, effective, and vital instruments for promoting speedy growth and development in emerging economies. These meetings are also serving as a mechanism for the settlement of emerging disputed issues of the member countries. The upcoming summit to be organized by Russia, in the coming October 22-24, 2024 at Kazan, Russia, will create new dimensions for the BRICS countries, which will go a long way in improving the performance of the BRICS countries.

Issues for concern for member countries:

The BRICS, which is 23 years old, has been facing major differences, hampering its role and contribution in respect to poverty and sustainable development, which is the need of the hour. There have been many gray areas which require concerted efforts by the governments of the member nations on a war footing. These areas are as follows:

1. Economic Disparity
2. Political Differences
3. Trade Imbalances
4. Lack of a Unified Voice
5. Sustainability and Environmental Concerns
6. Geopolitical Conflicts
7. Institutional Weaknesses
8. Social Inequalities

Agenda for 2024 and Beyond:

The following issues should be the focal issues in years to come.

1. Creation and promotion of new quality production forces across member countries;

2. Initiation of policies for the needed green electricity for accelerating the pace of economic and social development among BRICS nations;

3. Concerted and integrated efforts in respect of low-carbon technologies;

4. Speeding up steps for accelerating the pace of digitalization of operations in the economies,

5. Greater emphasis on financial inclusion which had much affected during COVID-19.

6. Innovative policies for eradication of poverty among BRICS countries in bad shape.

Addressing these challenges requires strong political will, effective diplomacy, and a commitment to multilateral cooperation. Despite these issues, the BRICS bloc has the potential to play a significant role in shaping the global economic and political landscape.


References:

Asian Issues; Belgrade; Special Issue [Editor’s Word] on BRICS; Vol. 9; No.1; 2023

The BRICS in Global Governance: Can the BRICS fill the global leadership gap?

​The Turkish Center for Asia Pacific Studies - September 21, 2024

Professor Badar Alam Iqbal
APAC Non-resident Distinguished Fellow, e-mail: badar.iqbal@fulbrightmail.org 

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