Brief history of BRICs (when, why and for what)

The term BRICs was used (and created) for the first time in 2001, when the economist Jim O’Neill wrote “Building Better Global Economic BRICs”, a paper that discussed the “state of the world economy as we approach year-end, with particular emphasis on the relationship between the G7 and some of the larger emerging market economies”, as the author marked.

BRICs, an economic-commercial association, stands for Brazil, Russia, India, China and South-Africa, the five more powerful countries if we talk in terms of emergent markets, and the five economies that are supposed to become the dominants of the world in the year 2050. 

The main objectives  and aims of the BRICs are:

1. To facilitate market interlinkages
2. “To promote mutual trade and investment and create a business-friendly environment for investors and entrepreneurs in all BRICs countries” (Quora, U.Community)
3. To be a valid alternative to the G8
4. To contribute in the improvement of human security, education, human development, communication, eradication of terrorism and technological development

http://www.statssa.gov.za/?p=11355

Although O’Neill started to talk about this five countries in the early 2000s, it’s not until 2009, when the fateful European crisis occurred, that the BRICs really started to be notable in the global economy, moment when they assumed the idea of the BRICs officially. It is also the year when the first BRICs summit took place, in Russia, on June 16. But, how did the BRICs come about?

After 9/11, the globalization of the world was a matter of fact, and no one could said the opposite. Globalization would not stop, it was going to evolve in a more complex way, one that would involve not just America, but the whole world. Even though one of the first critiques that was addressed to the BRICs was that they were not defining a new way of capitalism development ( and that they were following the American model), things are changing. China with 1.394.570.000 habitants, India with 1.338.140.000, Brazil with 209.702.000 and Russia with 146.877.088 are the 40.36% of the total world population, and if these countries embrace productivity changes that go with global trade and globalization, they are likely to become big. The BRICs have more things in common: 

1. A huge territory, nearly 38.5 millions of km2, fact that proportionates them contintenal strategies
2. A big bunch of natural ressources and a cheap workforce. Goldman and Sachs predicted that Brasil and Rusia will be able to be suppliers of raw materials, and that China and India will be the global suppliers of technology and services.
3. A middle class in process of expansion, even thought India and China have huge populations of poor people.
4. A really big growth of their GDP, that could become bigger that the one from the G7 (the aggregate size of the BRICs was about 23.3% of world GDP at the end of 2000, somewhat higher than both Euroland and Japan)

But, like everything in this world, BRICs have also their differences:

1. Brazil and India are democratic countries, China and Russia are not
2. Brazil and Russia export hydrocarbons, China and India are net importers.
3. China and Russia are permanent members of the UN Security Council, the others are not.

http://english.gov.cn/policies/infographics/2015/07/10/content_281475144078033.htm

Taking into consideration their similarities and their differences, we can constat that the BRICs have achieved some important points, leads by China, the clear leader of the association. And why China? Because  it has the larger GDP of the group, and thanks to its leadership, the foundation of the New Development Bank has been possible.

And no, we are not forgetting about the last letter of the acronym, the “s” from South Africa. The BRICs had one problem: no African countries were included. And it was quite a big problem, because if we think about the group’s claim to speak for the emerging world, Africa (that it’s not only good for providing raw materials to the rest) was seen as an irrelevance economic power.

That’s why when in 2011 South Africa entered to the group, the BRICs obtained  automatically a more global structure. Even thought South Africa has a little population in comparaison with the other members of the group, an economy who is value with 286.000 millions of dollars and a growing of just a 3% per year, the bet of China to the African country has been seen as a way to narrow bonds with the African continent.