The emergence of the BRICS ( Brazil, Russia, India, China, and South Africa) bloc has marked a significant shift in the global economic and political landscape. This coalition, representing diverse regions and cultures, has become a formidable force challenging the traditional dominance of Western powers.
The acronym BRIC was coined by economist jim O’Neil to classify the top 4 countries which he believed had the ability to challenge the G7 coalition in terms of global economic, political and militaristic dominance, in the foreseeable future.
BRIC formally came into existence in 2009, recognizing the shared economic interests and concerns of its member nations. While individually these countries have unique historical backgrounds, the alliance is rooted in a common aspiration for a more balanced and inclusive global order.
South africa, under the leadership of former President Jacob Zuma, expressed interests in joining the BRIC coalition in 2009 , because their interests were similar to those outlined by BRIC.
They later made this move in 2010. Hence,BRIC became BRICS with the addition of south africa.
The rise of BRICS reflects a desire to break away from historical imbalances and create a multipolar world where diverse voices are heard.
Also, the US Federal Reserve has raised interest rates in recent years. As a result of this, developing countries have widely suffered from paying higher interests on their dollar debt and are battling the exchange rate impact from a strong dollar. The interest to borrow in local currencies or other currencies is strongly motivated by economic considerations, and this has made many countries consider aligning themselves with BRICS
Together, the BRICS coalition has a nominal G.D.P of $26.03trillion, which is a bout 23.12% of the world GDP.
BRICS hopes to challenge the dominance of the G7 bloc through three major pathways:
1. Political and security collaboration: BRICS Ministers of Foreign Affairs and International Relations also usually meet twice a year – once for a standalone meeting and again on the margins of the UN General Assembly. BRICS national security advisers meet to coordinate a BRICS approach to peace and security matters.[1]
2. Financial and Economic Collaboration:The New Development Bank (NDB) was established in 2015 with a AAA and AA+ credit rating to play a catalytic role in providing financial support to emerging markets and developing countries for infrastructure gap, sustainable development and equity in power-sharing.[2]
3. Cultural and People to people Collaboration:BRICS cooperation provides tangible benefits for its member countries through research and innovation, energy, health and education. More than 100 multilateral BRICS research projects have been funded under the BRICS Framework Programme. The BRICS partnership involves a strong commitment to joint ownership and shared responsibility, the real and open sharing of experience, expertise and resources; and a determination to contribute BRICS respective, comparative scientific and technological strengths for the advancement of the global good.[3]
While the BRICS coalition has taken steps to achieve some of their goals through effective collaborations, there are still some challenges that they are yet to surmount.
Some of these challenges are:
selection of common currency for international trading within the BLOC:
There have been many white paper proposals on the creation of a new common currency for trading. Some countries also proposed the use of their currency as a local currency for trading amongst each other. Many countries are against the use of other countries’ currency as a common legal tender because “he who pays the piper, calls the tune”.
Volatile changes in economic interests amongst BRICS+ Countries:
There are speculations that most countries are using BRICS as a means to ‘get back’ at the United States. If relationships between these countries and the United States improve, they might reconsider their positions in the BRIC alliance.
Only the future can tell whether BRICS can successfully meet their objectives, which silently include: dedollarization of the world economy.
REFERENCES:
[1][2][3] BRICS (2023). BRICS and Africa: Partnership for Mutually Accelerated Growth,
Sustainable Development and Inclusive Multilateralism. Retrieved from https://brics2023.gov.za/three-pillars-of-cooperation/#:~:text=Financial%20and%20Economic%20Cooperation,of%20food%20and%20energy%20insecurity
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