What began as a Goldman Sachs analyst’s acronym has become a significant force in international politics—and perhaps the most visible symbol of the emerging multipolar order. BRICS—originally comprising Brazil, Russia, India, China, and South Africa, with expansion to include additional members in 2024—represents a grouping of major emerging economies that together account for roughly 45% of the world’s population, over 35% of global GDP (measured at purchasing power parity), and a substantial share of global commodity production. The bloc has evolved from an investment category into a platform for challenging Western institutional dominance and articulating alternative visions of world order.
Origins and Evolution¶
The BRIC concept emerged in November 2001 when Goldman Sachs economist Jim O’Neill published a paper titled “Building Better Global Economic BRICs.” The idea was purely analytical rather than political: Brazil, Russia, India, and China shared high growth rates, large populations, and expanding economic weight, making them attractive investment destinations that would reshape the global economy by 2050. O’Neill was not predicting political alignment; he was advising investors.
The numbers were compelling. In 2001, the four BRIC economies together accounted for approximately 8% of global GDP at market exchange rates. O’Neill projected they would reach 14% by 2011—a prediction that proved conservative. The acronym entered financial vocabulary as shorthand for “emerging market growth.”
Formalization began in 2006 when the four countries’ foreign ministers met on the margins of the UN General Assembly in New York—transforming an investment category into a diplomatic forum. The first full summit occurred in Yekaterinburg, Russia, in June 2009, producing a declaration calling for a “more democratic and just multipolar world order.”
South Africa joined in 2010, adding the “S” and giving the grouping a foothold in Africa—the continent that would be central to 21st-century growth. South Africa was smaller than the founding members but represented African voice and added geographic breadth.
Institutional development followed, giving BRICS concrete form beyond summits:
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New Development Bank (NDB): Established in 2014 and headquartered in Shanghai, the NDB provides development financing as an alternative to the World Bank. Initial capital of $50 billion (with $100 billion authorized), equally subscribed by the five founding members. The bank has since admitted new members including Bangladesh, UAE, Egypt, and Uruguay.
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Contingent Reserve Arrangement (CRA): A $100 billion pool providing emergency liquidity support outside the IMF. China contributes $41 billion, Russia, Brazil, and India $18 billion each, South Africa $5 billion—reflecting economic weight. The CRA has not yet been activated at scale but provides insurance against dollar-denominated financial crises.
The 2024 expansion marked a transformative phase. At the 2023 Johannesburg summit, BRICS announced that six countries had been invited to join: Iran, Egypt, Ethiopia, Saudi Arabia, UAE, and Argentina. Argentina’s newly elected president withdrew the invitation; Saudi Arabia deferred but participates as a “partner.” On January 1, 2024, Iran, Egypt, Ethiopia, and the UAE formally joined, expanding BRICS to nine members. Additional countries—including Algeria, Indonesia, Thailand, Vietnam, Nigeria, and others—have expressed interest or received “partner” status. Over 40 countries have formally inquired about membership.
This growth reflects both BRICS’ increased attractiveness as a forum outside Western control and its ambition to represent the Global South more broadly. The expanded bloc accounts for approximately 46% of world population, 29% of global GDP (market rates), and controls significant shares of global oil production (the addition of Iran and UAE substantially increased this), mineral resources, and agricultural output.
What BRICS Is—and Isn’t¶
Understanding BRICS requires recognizing what the grouping does and does not represent—a distinction often lost in both Western alarm and BRICS boosterism:
BRICS is a platform, not an alliance. There is no mutual defense commitment, no integrated command structure, no binding treaty obligations. Members pursue independent foreign policies and often have sharply conflicting interests: - India and China contested border territory in the Himalayas with fatal skirmishes in June 2020 (the Galwan Valley clash killed 20 Indian and an estimated 40 Chinese soldiers) and continue to mass forces along the Line of Actual Control - Russia’s Ukraine invasion has complicated relations with all partners—India and China have maintained economic ties but avoid explicit endorsement; Brazil and South Africa have tried to remain neutral - China and India compete for influence in Southeast Asia, the Indian Ocean, and Africa - Brazil’s foreign policy shifts with its government (Bolsonaro versus Lula)
BRICS is a challenge to Western hegemony, not a unified alternative. Members agree on what they oppose: the post-1945 international order dominated by the united-states and Europe, voting weights in the IMF and World Bank that reflect 1944 rather than 2024, the dollar’s role as global reserve currency, Western control of SWIFT and financial messaging systems, and what they perceive as selective application of “rules-based order” to constrain non-Western powers while the West violates norms when convenient.
They disagree profoundly about what should replace the current order: - China seeks a sphere of influence in Asia and global recognition as a great power equal to the United States - India resists Chinese dominance and hedges through relationships with the united-states, Japan, and Australia (the Quad) - Russia wants to break Western unity and establish a multipolar world where it can dominate its near abroad - Brazil seeks recognition and voice without confrontation; South Africa pursues African leadership
BRICS offers a venue for coordination without binding commitments. Annual summits produce declarations, joint statements, and initiatives, but implementation depends on members’ individual choices. This flexibility is both strength (allowing diverse countries to participate) and weakness (limiting concrete achievement). The grouping enables consultation, signals shared direction to the West, and provides legitimacy for members’ individual positions without the constraints of formal alliance.
The De-dollarization Agenda¶
Perhaps BRICS’ most significant and controversial initiative concerns currency and finance—the effort to reduce dependence on the US dollar and Western-controlled financial infrastructure:
Dollar dominance creates both benefits and vulnerabilities. The dollar accounts for approximately: - 58% of global foreign exchange reserves - 88% of foreign exchange transactions (one side of the trade) - 40-50% of international trade invoicing (far exceeding the US share of world trade) - Near-total dominance in commodity pricing (oil, gold, grains)
For countries subject to American sanctions or concerned about American financial surveillance, this dominance creates vulnerability. Dollar-denominated transactions flow through American-regulated correspondent banks (primarily in New York) and can be blocked by sanctions. The SWIFT messaging system, while nominally international, responds to American pressure. This gives Washington unique leverage—what scholars call weaponized-interdependence—to punish adversaries through financial exclusion.
Alternative payment systems aim to reduce this dependence: - China’s CIPS (Cross-Border Interbank Payment System): Launched in 2015, processes yuan-denominated transactions. By 2023, CIPS handled approximately $14 trillion in transactions annually with over 1,400 participant banks—still tiny compared to dollar volumes but growing rapidly. - Russia’s SPFS: Created after 2014 sanctions, processes domestic ruble transactions and some international trade. Used extensively since Russia was partially excluded from SWIFT in 2022. - BRICS payment discussions: Each summit produces statements on developing “BRICS Bridge” or similar mechanisms for trade settlement. Progress has been slow but persistent.
Local currency trade between BRICS members reduces dollar transactions: - Russia-China trade increasingly settles in yuan and rubles—by 2023, over 90% of bilateral trade used local currencies, up from negligible levels a decade earlier - India-Russia trade explores rupee-based settlement for oil imports, though practical difficulties (India’s trade deficit with Russia) complicate implementation - China’s yuan has become the most-traded currency in Russia, displacing the dollar - Belt and Road financing increasingly denominates in yuan
These arrangements are growing but remain small relative to dollar-based global commerce. The dollar’s network effects—everyone uses it because everyone uses it—are difficult to overcome.
A BRICS currency has been discussed at every summit but faces fundamental obstacles: - A common currency requires economic convergence (BRICS members range from high inflation to deflation, from commodity exporters to importers) - Supranational institutions with authority over monetary policy (unacceptable to members who prize sovereignty) - Political integration that members show no interest in pursuing - Trust in a common institution when members do not fully trust each other
More realistic are trade settlement mechanisms that allow bilateral exchange without dollar intermediation—not a BRICS dollar but a network of bilateral and multilateral arrangements that collectively reduce dollar dependence.
The significance of these efforts lies not in imminent dollar displacement—the dollar will remain dominant for decades—but in the gradual development of alternatives that reduce American financial leverage over time. Each new bilateral currency arrangement, each expansion of CIPS, each BRICS trade deal settled outside the dollar system chips away at American structural power.
The New Development Bank¶
The NDB—sometimes called the “BRICS Bank”—embodies the grouping’s institutional ambition and represents its most concrete achievement. Headquartered in a gleaming tower in Shanghai’s Pudong district, the bank provides development financing as an alternative to the World Bank and regional development banks.
Governance structure deliberately departed from Bretton Woods models: - Each founding member holds equal voting shares (20% each)—unlike the IMF and World Bank where voting reflects economic weight and the US holds effective veto power - No single country has veto power; decisions require simple or supermajority approval depending on the issue - Leadership rotates among members on five-year terms; the first president was Indian (K.V. Kamath), succeeded by a Brazilian (Marcos Troyjo) and then a Brazilian-nominated president (Dilma Rousseff, former president of Brazil) - Regional offices established in South Africa, Brazil, and Russia
Lending capacity and activity: - Authorized capital of $100 billion; subscribed capital of $50 billion - By 2023, the bank had approved approximately $33 billion in loans for over 100 projects - Average loan size of $300-400 million, focusing on infrastructure, transport, clean energy, and water - Major projects include wind farms in Brazil, metro systems in India, highway construction in Russia, and renewable energy installations across member countries
Lending priorities focus on infrastructure and sustainable development: - Approximately 40% of financing targets clean energy and environmental sustainability - The NDB has positioned itself as a “green bank,” issuing green bonds and prioritizing climate-related projects - This focus differentiates the NDB from Chinese bilateral lending, which has faced criticism for financing coal projects
Local currency lending allows borrowing in member countries’ currencies rather than dollars alone: - Loans available in yuan, rand, rupees, and other member currencies - Reduces exchange rate risk for borrowers - Supports development of domestic capital markets - Green bonds issued in yuan, dollars, euros, and member currencies
Membership expansion has extended the bank’s reach: - Bangladesh (2021), UAE (2021), Egypt (2023), Uruguay (2023) admitted as members - Algeria and others have applied - Expansion creates new lending opportunities but complicates governance
Challenges have emerged: - Capital constraints: The $33 billion disbursed represents just two-thirds of authorized lending capacity, but demand exceeds available capital - Geopolitical complications: Russia’s suspension from new lending decisions (though not expulsion) following the Ukraine invasion reflected Western pressure on other members and the difficulty of maintaining “non-political” operations - Competition with China: The NDB operates alongside the Asian Infrastructure Investment Bank (AIIB), Belt and Road financing, and Chinese bilateral lending—sometimes complementing, sometimes competing - Institutional coherence: As membership expands, maintaining the founding vision becomes more difficult
Internal Tensions¶
BRICS’ diversity is both strength and weakness—providing legitimacy through breadth while limiting depth of cooperation:
China dominates economically to a degree that creates structural imbalance: - Chinese GDP (approximately $18 trillion at market rates) exceeds the other four original members combined - China accounts for over 70% of total BRICS economic output - Chinese trade with BRICS partners dwarfs intra-BRICS trade excluding China - Belt and Road financing and infrastructure creates dependency relationships
Other members seek a platform for their own voices, not a Chinese-led bloc. India particularly resists arrangements that formalize Chinese preeminence. The question “Is BRICS a Chinese instrument?” haunts the organization, and other members work to ensure it is not.
Russia’s pariah status following the 2022 Ukraine invasion complicates BRICS positioning: - Western sanctions against Russia test members’ willingness to provide alternatives - Solidarity with Moscow risks secondary sanctions, reputational costs, and alienation from Western markets - Most BRICS members have avoided explicit endorsement of the invasion while quietly maintaining (and expanding) economic ties - Russia sees BRICS as a lifeline—proof it is not isolated; other members see association with Russia as a potential liability - The NDB’s effective suspension of Russian lending demonstrated limits to solidarity
India-China rivalry persists despite BRICS cooperation: - The 2020 Galwan Valley clash killed soldiers on both sides; military buildup along the disputed border continues - Competition for influence in Southeast Asia, the Indian Ocean, and Africa - Competing infrastructure projects: Belt and Road versus India’s connectivity initiatives - India’s participation in the Quad (with the united-states, Japan, and Australia) explicitly aims to counter Chinese power - At BRICS summits, Indian and Chinese leaders meet; outside BRICS, their militaries face each other across contested territory
Democratic divergence complicates any values-based identity: - Brazil and South Africa are democracies with functioning elections, free press, and civil society - China and Russia are authoritarian states with no meaningful political competition - India, the world’s largest democracy, has seen erosion of democratic norms under Modi - This divergence prevents BRICS from positioning itself as an alternative model—it has no shared political vision beyond rejecting Western dominance
Economic complementarity is limited: - China competes with Brazil in manufacturing, agriculture, and African markets - Russia competes with other energy exporters (and now, post-sanctions, desperately needs buyers) - India and China vie for similar investment, technology, and export markets - Trade barriers persist among members; BRICS has no free trade agreement - BRICS members sometimes have more in common economically with Western trading partners than with each other
Geopolitical Significance¶
BRICS’ importance lies in several dimensions that together represent a meaningful challenge to the post-1945 Western-dominated order:
Voice aggregation allows emerging economies to coordinate positions at the G20, in UN forums, and in global negotiations. A common front—even an imperfect one—carries more weight than individual advocacy: - BRICS joint statements on IMF reform, climate finance, and development policy amplify member positions - Coordination on UN Security Council issues (though this is limited given that only China and Russia are permanent members) - Common positions on trade negotiations and WTO reform
Alternative institutional development gradually creates options outside Western-dominated systems: - The NDB and CRA provide development finance and emergency liquidity outside Bretton Woods institutions - BRICS payment discussions, local currency trade, and CIPS expansion build financial infrastructure - The Shanghai Cooperation Organisation (overlapping membership with BRICS) provides security cooperation - Each new institution, each new arrangement, reduces Western leverage
Signal to the West demonstrates that American and European dominance of international institutions is contestable: - The expansion of BRICS membership—and the queue of countries seeking to join—indicates shifting perceptions of where power lies - Over 40 countries have expressed interest in membership; many more attend summits as observers - Western media attention to BRICS (even when dismissive) validates its significance - The bloc’s survival and growth despite predictions of collapse demonstrates resilience
Platform for middle powers provides countries like India, Brazil, and South Africa with a grouping where they are principals rather than junior partners to Western powers: - At G7/G20, these countries are guests or appendages; at BRICS, they are founding members - BRICS provides legitimacy for independent foreign policies—India can balance between the United States and China while citing BRICS membership as proof of multilateral engagement - For smaller new members (Ethiopia, Egypt), BRICS provides access to great powers and development finance
Global South representation: The 2024 expansion positioned BRICS as a platform for the Global South—the developing world seeking voice in a system created by and for the West. Whether BRICS can deliver for Global South interests (rather than just Chinese and Russian interests) remains to be seen, but the positioning has resonance.
The Expanded BRICS¶
The 2024 enlargement fundamentally changes BRICS’ character—expanding its reach while potentially diluting its coherence:
Geographic reach now spans major regions: - Latin America: Brazil remains the anchor (Argentina’s withdrawal notwithstanding) - Africa: South Africa, Egypt (the largest Arab country by population), Ethiopia (second-most populous African nation) - Middle East: Iran (under comprehensive Western sanctions), UAE (Gulf financial hub) - Asia: China, India, Russia spanning from the Pacific to Europe
This breadth supports claims to represent the Global South. BRICS now includes countries from every major developing region, with a combined population exceeding 3.5 billion—nearly half of humanity.
Economic weight increases substantially: - Combined GDP exceeds $30 trillion (PPP-adjusted), approximately 37% of world total - Combined GDP at market rates approximately 26% of global output - Oil production: The addition of Iran (4+ million barrels/day capacity) and UAE (3+ million barrels/day) makes BRICS a major oil bloc - The original BRICS produced roughly 20% of global oil; expanded BRICS approaches 40% - Saudi Arabia’s potential future participation (currently as “partner”) would make BRICS dominant in global energy
Coherence challenges multiply with diversity: - The original five already struggled to find common ground; nine members (with more coming) complicates consensus - Iran’s anti-Western radicalism differs from UAE’s global business model - Egypt and Ethiopia contest Nile water rights - India and China remain rivals despite shared membership - New members bring their own agendas, conflicts, and expectations
Institutional strain: Summit logistics, decision-making processes, and the NDB’s governance all face pressure from expansion. How do you make decisions among nine members with radically different interests? How do you maintain institutional focus when membership keeps growing?
Western concern grows as BRICS expands: - A grouping that coordinates positions on sanctions, currency, and institutional reform challenges American and European influence - The interest of over 40 countries in membership suggests shifting perceptions of global power - BRICS expansion occurs as Western institutions (G7, NATO) also expand—a pattern of competitive bloc-building - Even skeptics who dismiss BRICS as ineffective must explain why so many countries want to join
Future Trajectory¶
Several scenarios might unfold as BRICS navigates the tensions between ambition and diversity:
Deepening institutionalization could see: - The NDB expand lending capacity (possibly to $100 billion+ annually by 2030) - BRICS payment mechanisms and local currency trade mature into a meaningful alternative to dollar-based commerce - Coordination mechanisms strengthen on trade, technology, and development policy - A BRICS free trade agreement or customs cooperation (though this seems distant) - Gradual creation of meaningful alternatives to Western-dominated systems
This scenario requires managing internal tensions and maintaining focus despite expansion.
Fragmentation might result from: - India-China rivalry escalating beyond management (a border war would likely end meaningful cooperation) - Divergent responses to Russian pariah status if Western pressure intensifies - Chinese overreach that alienates other members seeking a platform, not a patron - New member conflicts (Egypt-Ethiopia, Iran-UAE) that paralyze decision-making - BRICS becoming a hollow shell, hosting summits that produce declarations but little action
This scenario is possible but has been predicted for years without materializing.
Selective cooperation represents the middle path and the most likely trajectory: - Useful coordination on some issues (IMF reform, development finance, sanctions resistance) while managing disagreement on others - The NDB and CRA function effectively within their mandates without transforming global finance - De-dollarization proceeds gradually through bilateral arrangements rather than a dramatic currency shift - BRICS provides diplomatic cover and legitimacy for members’ independent policies - The grouping remains significant without becoming a coherent bloc
Wild cards could accelerate or derail any trajectory: - A major financial crisis that discredits Western institutions and validates BRICS alternatives - Technological disruption (blockchain-based payment systems, digital currencies) that enables new financial infrastructure - A China-Taiwan conflict that forces BRICS members to choose sides - An India-China rapprochement that transforms the grouping’s potential - American accommodation of BRICS demands on institutional reform, reducing grievances that drive cooperation
Conclusion¶
BRICS reflects a world where American hegemony is contested, emerging economies demand voice, and alternatives to Western-dominated institutions are being built—slowly, imperfectly, but persistently. The grouping has survived and grown despite predictions of collapse, internal contradictions, and the immense challenge of coordinating diverse nations with competing interests.
Whether BRICS becomes a pillar of new world order—a genuine counterweight to Western institutions—or remains a talking shop that provides diplomatic cover without delivering transformation remains to be determined. The answer depends partly on BRICS members’ choices and partly on whether Western institutions adapt to give emerging powers the voice they seek.
What is already clear: BRICS matters. The attention it receives from both advocates and critics, the queue of countries seeking membership, and the persistent efforts to build alternative financial infrastructure all indicate that the grouping represents something real about shifting global power. Jim O’Neill’s investment acronym has become a geopolitical phenomenon—not because BRICS has replaced Western dominance, but because it demonstrates that dominance is no longer uncontested.
Sources & Further Reading¶
- “Building BRICs” by Jim O’Neill (Goldman Sachs Global Economics Paper) — The original 2001 paper that coined the term and established the analytical framework that BRIC leaders later adopted as an institutional identity.
- “The BRICS and the Future of Global Order” by Oliver Stuenkel — The most comprehensive academic analysis of BRICS as a geopolitical phenomenon, examining both its achievements and limitations.
- “Has the West Lost It? A Provocation” by Kishore Mahbubani — A Singaporean diplomat’s argument for why the rise of non-Western powers and institutions like BRICS reflects irreversible shifts in global power.
- “Currency Wars: The Making of the Next Global Crisis” by James Rickards — Provides context for understanding BRICS de-dollarization efforts within broader currency competition dynamics.
- “The Post-American World” by Fareed Zakaria — Places BRICS within the broader narrative of “the rise of the rest” and what it means for global governance.