BRICS

BRICS is an intergovernmental organization comprising Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates. Originally identified to highlight investment opportunities, the grouping evolved into an actual geopolitical bloc, with their governments meeting annually at formal summits and coordinating multilateral policies since 2009. Bilateral relations among BRICS are conducted mainly on the basis of non-interference, equality, and mutual benefit.

The founding countries of Brazil, Russia, India, and China held the first summit in Yekaterinburg in 2009, with South Africa joining the bloc a year later. Iran, Egypt, Ethiopia, and the United Arab Emirates joined the organization on 1 January 2024.

Combined, the BRICS members encompass about 30% of the world's land surface and 45% of the global population. Brazil, Russia, India, and China are among the world's ten largest countries by population, area, and gross domestic product (GDP) nominal and by purchasing power parity. All five initial member states are members of the G20, with a combined nominal GDP of US$28 trillion (about 27% of the gross world product), a total GDP (PPP) of around US$57 trillion (33% of global GDP PPP), and an estimated US$4.5 trillion in combined foreign reserves (as of 2018).

The BRICS countries are considered the foremost geopolitical rival to the G7 bloc of leading advanced economies, implementing competing initiatives such as the New Development Bank, the BRICS Contingent Reserve Arrangement, the BRICS pay, the BRICS Joint Statistical Publication and the BRICS basket reserve currency.

BRICS has received both praise and criticism  from numerous commentators.

Founding
The term BRIC was originally developed in the context of foreign investment strategies. It was introduced in the 2001 publication, Building Better Global Economic BRICs by then-chairman of Goldman Sachs Asset Management, Jim O'Neill.

The foreign ministers of the initial four BRIC General states (Brazil, Russia, India, and China) met in New York City in September 2006 at the margins of the General Debate of the UN Assembly, beginning a series of high-level meetings. A full-scale diplomatic meeting was held in Yekaterinburg, Russia, on 16 June 2009.

The BRIC grouping's 1st formal summit, also held in Yekaterinburg, commenced on 16 June 2009, with Luiz Inácio Lula da Silva, Dmitry Medvedev, Manmohan Singh, and Hu Jintao, the respective leaders of Brazil, Russia, India, and China, all attending. The summit's focus was on improving the global economic situation and reforming financial institutions, and discussed how the 4 countries could better co-operate in the future. There was further discussion of ways that developing countries, such as 3/4 of the BRIC members, could become more involved in global affairs.

In the aftermath of the 2009 Yekaterinburg summit, the BRIC nations announced the need for a new global reserve currency, which would have to be "diverse, stable and predictable." Although the statement that was released did not directly criticize the perceived "dominance" of the US dollar – something that Russia had criticized in the past – it did spark a fall in the value of the dollar against other major currencies.

2010 expansion
In 2010, South Africa began efforts to join the BRIC grouping, and the process for its formal admission began in August of that year. South Africa officially became a member nation on 24 December 2010, after being formally invited by China to join and subsequently accepted by other BRIC countries. The group was renamed BRICS – with the "S" standing for South Africa – to reflect the group's expanded membership. In April 2011, the President of South Africa, Jacob Zuma, attended the 2011 BRICS summit in Sanya, China, as a full member.

New Development Bank


In June 2012, the BRICS nations pledged $75 billion to boost the lending power of the International Monetary Fund (IMF). However, this loan was conditional on IMF voting reforms. In March 2013, during the fifth BRICS summit in Durban, the member countries agreed to create a global financial institution to cooperate with the western-dominated IMF and World Bank. They planned to set up this New Development Bank by 2014.



At the BRICS leaders meeting in St Petersburg in September 2013, China committed $41 billion towards the pool; Brazil, India, and Russia $18 billion each; and South Africa $5 billion. China, who held the world's largest foreign exchange reserves and contributes the bulk of the currency pool, wanted a more significant managing role. China also wanted to be the location of the reserve. In October 2013, Russia's Finance Minister Anton Siluanov said that creating a $100 billion in funds designated to steady currency markets would be taken in early 2014. The Brazilian finance minister, Guido Mantega, confirmed that the fund would be created by March 2014. However, by April 2014, the currency reserve pool and development bank had yet to be set up, and the date was rescheduled to 2015.



In July 2014, during the sixth BRICS summit in Fortaleza, the BRICS signed the document to create the US$100 billion New Development Bank (formerly known as the "BRICS Development Bank") and a reserve currency pool worth over another US$100 billion. Documents on cooperation between BRICS export credit agencies and an agreement of cooperation on innovation were also signed. The Fortaleza summit was followed by a BRICS meeting with the Union of South American Nations presidents in Brasilia.

Other initiatives
Since 2011, the National Institutes of Statistics of the BRICS group of countries (IBGE, Rosstat, the National Bureau of Statistics of China, the Central Statistics Office (India) and Statistics South Africa) produce an annual joint statistical publication in order to put statistical production in perspective, compare adopted methodologies and statistical results. The publication serves as single data platform for the mutual benefit of participating countries.

Since 2012, the BRICS group of countries have been planning an optical fibre submarine communications cable system to carry telecommunications between the BRICS countries, known as the BRICS Cable. Part of the motivation for the project was the spying of the U.S. National Security Agency on all telecommunications that flowed in and out of United States territory. As of 2023, construction of the proposed cable network had not started.

In August 2019, the communications ministers of the BRICS countries signed a letter of intent to cooperate in the Information and Communication Technology sector. This agreement was signed in the fifth edition of meeting of communication ministers of countries member of the group held in Brasília, Brazil.

The New Development Bank plans on giving out $15 billion to member states to help their struggling economies. Member countries are hoping for a smooth comeback and a continuation of economic trade pre-COVID-19. The 2020 BRICS summit was held virtually in St. Petersburg, Russia and discussed how to handle the COVID-19 pandemic and how to fix the multilateral system via reforms. During the 13th BRICS summit, in 2021, Indian Prime Minister Narendra Modi called for a transparent investigation into the origins of COVID-19 under the World Health Organization with the full cooperation of "all countries", and Chinese leader Xi Jinping spoke directly afterwards, calling on BRICS countries to "oppose politicisation" of the process.

In May 2023, South Africa announced that they would be giving diplomatic immunity to Vladimir Putin and other Russian officials so that they could attend the 15th BRICS Summit despite the ICC arrest warrant for Putin. In July 2023, the Russian president announced that he will not personally attend the BRICS summit in Johannesburg on 22–24 August despite good relations with the South African government. Russian news channels noted that Putin will remotely participate online in all BRICS leaders' sessions, including its Business Forum, and also deliver his remarks virtually.

2024 expansion
In August 2023, at the 15th BRICS Summit, South African President Cyril Ramaphosa announced that 6 emerging market group countries (Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates) had been invited to join the bloc. Full membership was scheduled to take effect on 1 January 2024. However, the Argentine general election in November 2023 led to a change in president to Javier Milei, who had committed to withdraw the country's membership application. On 30 November 2023, incoming Foreign Minister of Argentina Diana Mondino confirmed that Argentina would not join the BRICS. On 29 December 2023 the Government of Argentina sent a letter to all BRICS leaders to officially announce its withdrawal from the application process.

Saudi Arabia did not join BRICS at the start of 2024 as it had been planned, and they announced in mid January that they were still considering on the matter. As of April 2024, the matter is still under consideration. The aim of latest expansion is touted as part of a plan to build a multipolar world order that puts weight to hitherto subdued voices of the Global South and brings them to the centre of the world agenda. There are more developing countries that are interested in joining the BRICS after the expansion in 2024.

Summits
The grouping has held annual summits since 2009, with member countries taking turns to host. Prior to South Africa's admission, two BRIC summits were held, in 2009 and 2010. The first five-member BRICS summit was held in 2011. The most recent BRICS leaders' summit took place virtually on 23 June 2022 hosted by China. India hosted the BRICS 2021 summit in New Delhi and, amid tensions with China, Chinese leader Xi Jinping had made a soft move by supporting India's Chairmanship in 2021.

Application and expansion process
While there is currently no formal application process to join BRICS, any hopeful government must receive the unanimous backing of all member states to receive an invitation. It was not until the early 2020s that discussions regarding allowing new states to join the club were widely held. Leaders and senior diplomats from the participating members began to discuss the prospect of adding additional members to the organization at that point.

In August 2023, at the 15th BRICS Summit, South African President Cyril Ramaphosa announced that Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates had been invited to join the organisation on 1 January 2024.

On 30 December 2023, the new government of Argentina, which formally submitted an application for BRICS membership under Alberto Fernández's government in 2022, officially declined the offer to join the bloc due to the new government's different foreign policy.

On 1 January 2024, Egypt, Ethiopia, Iran and the United Arab Emirates officially joined the bloc.

Potential candidates for future membership
The following countries have either expressed interest in joining BRICS or have already applied for membership:

1 - Officially applied for membership 2 - Officially invited to join, but have yet to make a formal decision

Financial architecture


The financial architecture of BRICS is made of the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA). These components were signed into treaty in 2014 and became active in 2015.

New Development Bank
The New Development Bank (NDB), formally referred to as the BRICS Development Bank, is a multilateral development bank operated by the five BRICS states. The bank's primary focus of lending is infrastructure projects with authorized lending of up to $34 billion annually. South Africa hosts the African headquarters of the bank. The bank has a starting capital of $50 billion, with wealth increased to $100 billion over time. Brazil, Russia, India, China, and South Africa initially contributed $10 billion each to bring the total to $50 billion. As of 2020, it had 53 projects under way worth around $15 billion.

In 2021, Bangladesh, Egypt, the United Arab Emirates and Uruguay joined the NDB.

BRICS Contingent Reserve Arrangement
The BRICS Contingent Reserve Arrangement (CRA) is a framework for providing protection against global liquidity pressures. This includes currency issues where members' national currencies are being adversely affected by global financial pressures. Emerging economies that experienced rapid economic liberalization went through increased economic volatility, bringing an uncertain macroeconomic environment. The CRA competes with the International Monetary Fund (IMF). Along with the New Development Bank, it is an example of increasing South-South cooperation. It was established in 2015 by the BRICS countries. The legal basis is formed by the Treaty for the Establishment of a BRICS Contingent Reserve Arrangement, signed in Fortaleza in July 2014. With its inaugural meetings of the BRICS CRA Governing Council and Standing Committee, held on 4 September 2015, in Ankara, Turkey it entered into force upon ratification by all BRICS states, announced at the 7th BRICS summit in July 2015.

BRICS payment system
At the 2015 BRICS summit in Russia, ministers from the BRICS states initiated consultations for a payment system that would be an alternative to the SWIFT system. The stated goal was to initially move to settlements in national currencies. The Central Bank of Russia highlighted the main benefits as backup and redundancy in case there were disruptions to the SWIFT system.

China also launched its own alternative to SWIFT: the Cross-Border Interbank Payment System, which enables financial institutions worldwide to send and receive information about financial transactions. India also has its alternative Structured Financial Messaging System (SFMS), as do Russia SPFS and Brazil Pix.

Potential common currency
BRICS countries committed to study the feasibility of a new common currency or similar, at the 2023 BRICS summit in South Africa. Fair and easier international trade as well as a major reduction in costs of transactions would be some of the reasons why the countries could forge a currency union.

Reception


In 2012, Hu Jintao, the then General Secretary of the Chinese Communist Party and President of China, described the BRICS countries as defenders and promoters of developing countries and a force for world peace. Western analysts have highlighted potential divisions and weaknesses in the grouping, including significant economic instabilities,   disagreements among the members over the UN Security Council reform, and India and China's disputes over territorial issues.

On 9 April 2013, Isobel Coleman, director of the Civil Society, Markets, and Democracy Program at the American think tank Council on Foreign Relations, and later U.S. representative to the UN, claimed that the BRICS members share a lack of consensus. They uphold drastically different political systems, from a vibrant democracy in Brazil to entrenched oligarchy in Russia, and their economies are little integrated and are different in size by orders of magnitude. She also claimed that the significant difference in GDP influences the reserves: China accounts for over 41% of the contribution, which in turn leads to its bigger political say within the association.

In 2014, the Indian Marxist author Vijay Prashad raised the limitations of the BRICS as a political and economic "locomotive of the South" because they follow neoliberal policies. They have established neither new counter-balancing institutions nor come up with an alternative ideology. Furthermore, the BRICS project, argues Prashad, has no ability to challenge the primacy of the United States and NATO.

A multi-year study at Tufts University published in July 2023 found that the "common portrayal of BRICS as a China-dominated group primarily pursuing anti-U.S. agendas" was misplaced. The study asserted: "The BRICS countries connect around common development interests and a quest for a multipolar world order in which no single power dominates. Yet BRICS consolidation has turned the group into a potent negotiation force that now challenges Washington's geopolitical and economic goals".

After the August 2023 BRICS Summit, Con Coughlin—defence and foreign affairs editor at The Daily Telegraph—claimed "the challenge BRICS presents to the established world order seems destined to failure" and accused the organization of being used by China as a vehicle for expanding its global influence. Coughlin also noted the contradictions within the organization, such as the border dispute between China and India, and called for greater Western engagement with India as part of a new strategic alliance.

According to the Atlantic Council's Thomas Hill in December 2023, the de-dollarization efforts within BRICS, particularly in North Africa, present a significant challenge to US interests. The inclusion of Egypt and the enthusiasm in Algiers and Tunis suggest that North African states may actively support BRICS's priority of de-dollarization. This poses a threat to the US, as a coordinated de-dollarization effort in the region could diminish American influence and impact existing trade agreements. The expansion of BRICS raises concerns for US policymakers, given the group's commitment to global de-dollarization, which aims to replace the dollar with the "R5" or "the renminbi, ruble, rupee, real, and rand", or with other multilateral central bank digital currency (CBDC) as the new global currency. This shift could limit the US ability to run deficits and maintain low interest rates. Moreover, de-dollarization would undermine the effectiveness of US sanctions, relying on the SWIFT system, as BRICS seeks alternative financial systems, potentially making SWIFT obsolete.

According to a Gallup International poll conducted between October and December 2023, almost a third of people around the world had never heard of BRICS but Western countries were much more negative towards the alliance than elsewhere. The most negative attitudes were found in Sweden (45%), Spain (30%), USA (30%), Portugal (29%) and Ukraine (29%) while the most positive net attitudes were in Russia (38%), Iran (37%), Nigeria (36%), Saudi Arabia (33%) and Malaysia (32%). In India, 36% had a positive view of BRICS while 29% had a negative view.

BRICS Pro Tempore Presidency
The group at each summit elects one of the heads of state of the component countries to serve as President Pro Tempore of the BRICS. In 2019, the pro tempore presidency was held by the president of Brazil.

The theme of the 11th BRICS summit was "BRICS: economic growth for an innovative future", and the priorities of the Brazilian Pro Tempore Presidency for 2019 are the following – Strengthening of the cooperation in Science, technology and innovation; Enhancement of the cooperation on digital economy; Invigoration of the cooperation on the fight against transnational crime, especially against organized crime, money laundering and drug trafficking; Encouragement to the rapprochement between the New Development Bank (NDB) and the BRICS Business Council. Currently the new President Pro Tempore is Russia and their goals are: investing into BRICS countries in order to strengthen everyone's economies, cooperating in the energy and environmental industries, helping with young children and coming up with resolutions on migration and peacekeeping.

Current leaders
Current leading highest state representatives: