DELHI - BY ASIA INSIDER - Apr 13,2024

Following the 2023 BRICS summit in Johannesburg, South Africa, a landmark decision was made to expand the BRICS consortium of emerging economies. Chinese President hailed this move as 'historic,' marking the addition of five new members: Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates, into the fold from January 2024. Argentina was also extended an invitation, which was declined by its newly elected President Javier Milei.

The BRICS acronym, initially coined by Jim O’Neill in 2001, officially became a cohesive group with the collaboration of Brazil, Russia, India, and China in 2009, and South Africa's inclusion in 2010.

This expansion not only enhances the group's economic footprint, which already accounts for 26% of the global GDP and over 40% of the world's population, but also strengthens its pursuit of creating a more equitable and reformed global order.

 

The addition of the new members is set to bolster the BRICS economies significantly, adding an estimated $2.6 trillion to their collective GDP. This amplifies the group's share of the global economy to 28.1%.

Despite the G7's dominant economic position, holding 43.2% of global GDP, the BRICS nations, especially with their new members, are poised for substantial growth.

Notably, Egypt and Ethiopia are projected to see their economies expand by 635% and 1,170% respectively by 2050.

 

In terms of resources and strategic capabilities, the enlarged BRICS bloc will now command over 43% of the world’s oil production and 25% of global exports.

The group's dominance in rare earth minerals is also significant, with the original BRIC nations controlling a vast majority of these crucial resources, vital for a range of technologies from consumer electronics to advanced military equipment.

The demographic shift towards an increasing global middle class, particularly in China, India, Brazil, and Egypt, underscores the growing economic and strategic significance of the BRICS nations.

 

Beyond economics, the BRICS aim to leverage their collective influence to challenge the Western-centric global order.

Initiatives like the New Development Bank, established to fund infrastructure and sustainable development projects, underscore their commitment to fostering a more balanced global power dynamic.

This bank has already financed numerous projects, demonstrating a clear alternative to Western-led financial institutions.

 

The annual BRICS summit serves as a platform for these nations to assert their agenda on the global stage, signaling a shift from Western-dominated economic and political paradigms.

However, aspirations to reform the international monetary system and reduce reliance on the US dollar face significant challenges.

Despite the dominance of the US dollar in global transactions and reserves, the BRICS nations are exploring the use of local currencies for bilateral trade to mitigate foreign exchange volatility.

 

Despite their growing economic clout and strategic initiatives, the BRICS consortium faces internal and geopolitical challenges. China's outsized role within the group and its complex relationship with India highlight the difficulties in achieving cohesive action.

Furthermore, geopolitical tensions and domestic economic challenges, particularly within China, pose risks to the group's ambitions.

The inclusion of new members with their own regional conflicts and controversies, such as Iran and Saudi Arabia, adds to the complexity of navigating a unified stance on global governance.

 

In essence, while the BRICS' expansion strengthens its economic base, the group's geopolitical influence remains constrained by internal divergences and external challenges.

The diverse political and economic systems within the BRICS, ranging from democracies to authoritarian regimes, illustrate the inherent difficulties in forming a coherent alternative to the current global order.

Despite these hurdles, the BRICS' efforts to reshape global governance reflect a significant endeavor towards a more balanced international power distribution.