Goldman Sachs estimates that in 2050, the Asia GDP will reach 90.6 Trillion USD (except developing markets) and the World total GDP will be 227.9 Trillion USD. In the similar vein, the World Economic Outlook (IMF, 2023), estimates that in 2028, the BRICS GDP (PPP) will reach 33.65% and the G7 GDP will represent 27.77% of world GDP.
Therefore, it seems the near future will be driven by Asian economic development, and within five years, BRICS will become a leading economic force. In the context of this future scenario, BRICS announced its transformation into BRICS+, expanding its membership from 4 (2009) to 5 (2011) and again to 11 (2023): Brazil, Russia, India, China, South Africa, Saudi Arabia, Egypt, United Arab Emirates, Argentina, Iran and Ethiopia. What shall the international community read from these recent developments? The answer develops within three lines of reasoning.
Firstly, recognition
The BRICS mechanism began with the meeting of the BRIC Ministers of Foreign Affairs on the sidelines of the UN General Assembly in 2006. In 2009, it was upgraded to summit level to be hosted once a year. By 2023, the BRICS leaders have convened 15 high level formal meetings.
In 2009, the 1st BRICs Summit was held in Yekaterinburg – Russia, meaning that the pure investment idea was then converted into a multilateral cooperation mechanism. In April 2010, the BRIC leaders convened the 2nd BRICs Summit in Brasilia – Brazil. The agenda items covered the international situation, international and regional hotspot issues, the international financial crisis, BRIC cooperation, G20 affairs, climate change and UN reform. In April 2011, South Africa participated, for the first time, in the 3rd BRICS Summit held in Sanya – China.
The theme is “Broad Vision, Shared Prosperity”, and the agenda items covered the international situation, international economy and finance, development issues and BRICS cooperation. Therefore, “BRICs” with a small letter “s” thus changed into “BRICS” with a capital letter “S”. In March 2012, the BRICS leaders convened the 4th BRICS Summit in New Delhi – India, under the theme of “BRICS Partnership for Global Stability, Security and Prosperity”, with agenda items including global governance and sustainable development.
In March 2013, the BRICS leaders convened the 5th BRICS Summit in Durban – South Africa, under the theme of “BRICS and Africa: Partnership for Development, Integration and Industrialization”. This summit also opened a new door for a dialogue between the BRICS leaders and the African leaders.
In July 2014, the BRICS leaders convened the 6th BRICS Summit in Fortaleza – Brazil, under the theme of “Inclusive Growth: Sustainable Solutions”, with agenda items covering political coordination, sustainable development and inclusive growth.
In July 2015, the BRICS leaders convened the 7th BRICS Summit in Ufa – Russia, under the theme of “BRICS Partnership–a Powerful Factor of Global Development”, with agenda items including international political and economic issues and BRICS cooperation. In October 2016, the group convened the 8th BRICS Summit in Goa – India, under the theme of “Building Responsive, Inclusive, and Collective Solutions”.
The agenda items covered the international political and economic situation, global governance, agriculture and BRICS internal cooperation. On the sidelines of the summit, the BRICS leaders had a dialogue with the member state leaders of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC).
In September 2017, the group convened the 9th BRICS Summit in Xiamen – China, under the theme of “BRICS: Stronger Partnership for a Brighter Future”. The agenda items covered international political and economic situation, global governance, and sustainable development and BRICS cooperation.
In July 2018, the 10th BRICS Summit took place in Johannesburg – South Africa, under the theme of “BRICS in Africa: Collaboration for Inclusive Growth and Shared Prosperity in the Fourth Industrial Revolution”.
In November 2019, the 11th BRICS Summit was organized in Brasilia – Brazil, under the theme of “BRICS: Economic Growth for an Innovative Future”. During the summit, BRICS leaders jointly attended the closing ceremony of the Business Forum and held closed-door meetings, open meetings and dialogue sessions with the Business Council and the New Development Bank. In November 2020, the 12th BRICS Summit took place via live video link and was organized by Russia. The central theme was “BRICS Partnership for Global Stability, Shared Security, and Innovative Growth”. The agenda items covered BRICS cooperation in combating COVID-19, international and regional situations, and global economic governance.
In September 2021, the 13th BRICS Summit was organized by India via video link under the theme of “ BRICS@15: Intra BRICS cooperation for continuity, consolidation, and consensus”. The agenda items covered further cooperation in combating COVID-19, promoting pragmatic cooperation and addressing global and regional hotspot issues. In 2022, the 14th BRICS Summit, chaired by China, has capitalized on the continuous expansion of the working areas, putting again in the center of the South-South debate the fight against poverty and the innovation for sustainability, in the context of the SDG and the United Nations 2030 Agenda for Sustainable Development.
Finally, in August 2023, hosted by South Africa, the 15th BRICS Summit, chaired by President Ramaphosa, was committed to Africa: Partnership for Mutually Accelerated Growth, Sustainable Development and Inclusive Multilateralism. A perfect occasion to announce the enlargement to Saudi Arabia, Egypt, United Arab Emirates, Argentina, Iran, and Ethiopia.
This sequence of events, culminating with the accession of six new sovereign states from Africa, South America, Middle East and Central Asia, demonstrates consistency, sense of purpose, political commitment and external recognition. Furthermore, it also demonstrates that the international community has validated the existence of BRICS, as an alternative platform for new patterns of South-South cooperation, as well as a balancing mechanism, in the context of the construction of a fair economic global order.
Secondly, equilibrium
According to the report prepared at the request of the BRICS Trade and Investment Working Group under the China Presidency in 2022, BRICS is the world’s most important economic bloc, representing more than one quarter of global GDP, and 42 % of the world’s population.
In 2022, BRICS represented 23% of the global economic flows, 18% of the global trade in goods, 25% in foreign investment and their GDP surpassed G7 (Table 1). In 2014, the BRICS established the New Development Bank (NDB) and the Contingent Reserve Arrangement, designed to provide financing support for infrastructure building and sustainable development – These institutions are supporting a number of projects namely, renewable energy projects in Brazil, railway network upgrade programs in India and new toll roads in Russia. The New Development Bank has approved over 80 projects and disbursed approximately 30 billion U.S. dollars in loans. The NDB is funded by the five BRICS member states in an equal manner, and all five members have an equal voting right and there is no one-vote veto.
The enlargement will bring new solutions for continuity but the differences between the new member states, might be leading to other forms of decision-making. The NDB does not impose harsh conditions while providing infrastructure financing to the member states and other emerging market economies and developing countries. Internally, the NDB is a platform for a better integration of the resources of the BRICS countries, enlarging the effect of investments. Externally, the NDB brings the member states and other developing countries closer, and enables mutual development. At the same time, the NDB may become a complement to those present international financial institutions under the Bretton Woods system, thus, is possible to increase the voice of the BRICS in global governance.
The background of the BRICS cooperation was the 2007-2008 global financial crisis. The crisis showed the major problem of the existing global governance practice – the insufficient voice and representation of developing countries on the global stage.
The BRICS is seen as an attempt by emerging developing economies to participate in global governance. For example, all the BRICS countries are members of the G20. The BRICS leaders have formed an unofficial practice of meeting up right before the G20 Summit, so as to achieve convergence in major issues. They try to stand on a common ground in the G20 Summit, and fight for rights of the developing countries against the developed countries.
Since its inception, the BRICS worked on sectoral cooperation in many areas, namely – science and technology, trade promotion and facilitation, banking, investment, energy, health, education, health, innovation, agriculture, and fight against transnational crime.
Currently, sectoral cooperation accounts for more than 30 subject areas – In all these areas, the organization has adopted a global vision. Among these cooperation areas, the Brazilian President Lula da Silva has insisted, again in Johannesburg, to create a single currency.
What we will witness in the near future, probably won’t be a creation of a new international currency, but the reinforcement of the de-dollarization, in particular in what regards bilateral and multilateral trade agreements in non-dollar currencies. BRICS had been very clear standing against dollar hegemony, taking advantage of their balance of trade payments surplus (in 2022, BRICS as a whole, ran a trade surplus of 387 billion).
President Xi addressing the summit has clearly pointed out the direction for the new areas of cooperation, namely digital economy, green economy, supply chain (…) innovation (…) artificial intelligence, education, and people-to-people cooperation.
Nevertheless, BRICS is continuously extending their areas of cooperation, and security is one of them. In 2011, all the five BRICS countries were members, either permanent or non-permanent, of the United Nation Security Council (UNSC). They expressed their opinion on international security through their votes in the UNSC.
BRICS countries questioned about the proposition of “the Responsibility to Protect”, and showed their opposition to military intervention in international affairs. In Johannesburg the dominant security concern has been to build the basis of peace in the case of Ukraine armed conflict.
It is true that the developed countries are still dominant in global governance. However, the BRICS countries have successfully made the world realize the fact that, the voice of developing countries can no longer be ignored.
These enlargement is reinforcing that idea. All these reasons allow us to anticipate that BRICS would not exist without China and its existence as well as this latest enlargement holds the potential to steering global development and seeking a new Era of equilibrium, particularly in whole global financial architecture.
Lastly, inclusive multilateralism
The five member states are dispersed geographically and the 11 members will continue to be. Their 11 economies are in different development stages and they often disclosed discrepancies in ideology and in a number of bilateral matters. However, what the recent enlargement demonstrates is clear: despite all differences and all challenges that the constitution of an economic block of this kind implies, BRICS opened the door to six new sovereign states, without preconditions, in relation to their political systems or economic resilience.
Their differences have been mitigated to continuously promote new possibilities, innovative approaches and turning in-depth and diversified over time. BRICS is reinforcing its political appeal, attracting more states, expanding markets, and promoting South-South cooperation.
Its internal mechanisms and external interactions with other states and international organizations has become an inspiration to endorse higher levels of multilateral cooperation at regional and global spheres. Table 2, depicts precisely the comparative perspective of global initiatives led by China and US. In the case of China initiatives, all are multilateral, without preconditions.
The United Nations Secretary-General, addressing the BRICS Submit, stated: “I have come to the BRICS summit with a simple message: In a fracturing world overwhelmed by crises, there is simply no alternative to cooperation” (Guterres, UN, 2023). Indeed, cooperation among dissimilar political units, and enlargement to more political units, not sharing the same political and economic characteristics, is probably risky, but it is certainly, token of their willingness to advance higher levels of inclusive multilateralism. BRICS+ is asserting a new level of political and economic influence, in ways that have caught many skeptics off guard.
Restrain from intervening other members’ internal affairs, and seeking to find the “greatest common factor” among them, seems to be key elements for success. They walk together on a mutually beneficial and win-win pathway. Nevertheless, this greatest common factor, is probably the leading cause of a sort of economic decolonization, as it is the first time in history, that an initiative is developing itself as an alternative to Bretton Woods and at the same time pushing for reforms at the International Monetary Fund, World Trade Organization and World Bank. This new pattern of international and multilateral relationship is worth to be further investigated.
Finally, when in 2001, Goldman Sachs’ Global Investment Research Division published: “Build Better Global Economic BRICs,” and coined the acronym for the four countries (BRIC), they could not imagine that this organization would reshape the world economy.
In 2003, another BRICs-oriented research followed from Goldman Sachs. This time (2003), “Dreaming with BRICs: The Path to 2050,” (Global Economics Paper No: 99), Goldman Sachs (page 2) stated: “The results are startling. If things go right, in less than 40 years, the BRICs economies together could be larger than the G6 (France, Germany, Italy, Poland, Spain, and the United Kingdom) in US dollar terms. By 2025 they could account for over half the size of the G6. Currently (2003), they are worth less than 15% (…)”. Indeed, they did not get the number right, but they certainly anticipated correctly the importance of BRICS in terms of global economy and the transformational impact of their existence. As President Xi mentioned in his address to XV BRICS Summit, “Victory is ensured when people pool their strength; success is ensured when people put their heads together” (Chinese adage).
Francisco José Leandro, Associate Professor, University of Macau
