Introduction to BRICS

BRICS is the acronym for the emergent economies of the world: Brazil, Russia, India, China and, since 2010, South Africa. This term was created by James O’Neill, an economist from The Goldman Sachs Group, Inc in 2001, in a Global Economic Paper titled “Dreaming with BRIC” (referring to these countries). There, O’Neill talked about them as the solution for the 2000s crisis due to all the resources they had. Although we cannot consider it an organization, this acronym had so much acceptation that the forming countries decided to held a brief meeting in 2008 and, the year after, they celebrated their first summit, where they discussed issues including the global financial crisis, the international situation and the future direction of BRIC dialogue and cooperation.

According to James O’Neill, most global institutions were designed in the era when the West dominated the world. He believes that the US and Europe are over-represented in the IMF and the World Bank and together with Japan, they control most regional development banks as well. This imbalance has been especially clear during the recent global financial crisis when the need for participation by non-G7 countries became evident. This Western part of the world is formed basically by Europe and North America. On the contrary, the BRICS are located in South America, Asia and Africa, continents that were not normally represented in international institutions. Together, these days, the BRICS is more than a quarter of Earth's land area, accounting for over 40% of world population. There are strong indications that the BRIC can become a "political club" or an "alliance", thus converting its growing economic power in a greater geopolitical influence in the near future.

                                                                             Forming countries of the BRICS (1)

These five countries are not homogeneous in interests, values, and policy preferences, but they do have a common interest in checking US/Western power and influence through collaboration with non-Western powers. They vary considerably but all are ahead of other developing countries on population, military power, economic weight, geopolitical clout, and global reach and engagement. For this reason, the BRICS can likely serve as a good example of a group of countries that can take leading economic positions with regard to some indices (overtaking other countries which are traditionally referred to as developed ones). This is because of some dynamic changes in the modern world which very often lead to situations where distinct dividing lines between developed and developing countries disappear. (Danil V. Vinnitskiy, 2015).

Despite the great importance BRICS have in the global economy nowadays, they have not yet managed to get their act together. For instance they have not been able to speak with one voice about the most important global economic and financial challenges – co-ordination of monetary and fiscal policies, macro-prudential regulation, development aid etc. That is because the forming countries are very different — both in terms of their resources and in terms of their values and goals. The only thing they all have in common is membership of BRICS. Brazil and India are democratic, China and Russia are not. Brazil and Russia export hydrocarbons, China and India are net importers. China and Russia are permanent members of the UN Security Council, the others are not. Structure of financial systems, levels of income, education, inequality, health challenges also differ substantially within BRICS. We can see all of the comparisons explained in the other sections of the blog.

Taking in account all of the above we must say that during the last decade, the BRICS have contributed over a third of world GDP growth and grown from one-sixth of the world economy to almost a quarter (in PPP terms). Looking forward to the coming decade, the economists from The Goldman Sachs Group have said they expect this trend to continue and become even more pronounced. To learn more about the forming countries and the importance of the group keep looking through the other sections. 

1. Nguyen Tung, H. Ediçoes Universidade-Empresa. Os Blocos Economicos e o Fomento do Comercio Global. https://editora.ctue.com.br/blocos-economicos-e-comercio-global/  620 x 403 jpg. September 13, 2016.  [Image]