BRICS: The Formation of a Global Alliance

BRICS is a global alliance that brings together nine influential countries—Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the UAE. It began as BRIC in 2009, with Brazil, Russia, India, and China uniting to explore investment opportunities. Over time, it transformed into a strong geopolitical bloc, addressing international challenges together. Members follow principles of equality, mutual benefit, and non-interference, which strengthen their partnerships. Each year, BRICS holds summits to discuss policies and expand cooperation across diverse sectors.

The group’s journey reflects its growing influence. South Africa joined in 2010, leading to the first BRICS summit in 2011. In 2024, Iran, Egypt, Ethiopia, and the UAE attended their first summit as official members. This steady expansion showcases the alliance’s appeal in shaping global policies. BRICS continues to evolve as a key platform for multilateral dialogue, fostering unity among its members while amplifying their voices on the world stage.

BRICs: Leadership and Partners

Leadership in BRICS reflects the diverse strengths of its member nations. China, with its massive economy, contributes 70% of the bloc’s total GDP, highlighting its dominant role. India, Brazil, and South Africa add significant influence as key players in their regions. Together, BRICS countries represent 45% of the global population and 30% of the world’s land area. These combined resources and economies make BRICS a powerful force in shaping global policies.

Partnerships within BRICS aim to create alternatives to Western-led institutions like the G7. The group has introduced initiatives such as the New Development Bank and the BRICS Contingent Reserve Arrangement to enhance financial cooperation. Other efforts, like the BRICS basket reserve currency, aim to challenge global financial norms. These initiatives underline the bloc’s goal to strengthen economic independence and foster collaboration among emerging economies.

BRICS has sparked mixed reactions worldwide. Supporters view it as a platform that empowers developing nations and balances global power. Critics argue that internal disparities, like China’s economic dominance, might hinder equitable decision-making. Despite differing opinions, BRICS remains a crucial player in international politics, offering an alternative to traditional power structures.

Founding of BRICS

BRICS began as a concept to identify emerging markets with high investment potential. Jim O’Neill, a Goldman Sachs economist, introduced the term “BRIC” in his 2001 paper Building Better Global Economic BRICs. Initially, it focused on Brazil, Russia, India, and China as key players in reshaping the global economy. This idea quickly evolved into a platform for diplomatic and economic cooperation among these nations, highlighting their growing importance in world affairs.

The first steps toward formalizing BRIC took place in 2006 when foreign ministers from the four nations met during the UN General Assembly in New York. These discussions paved the way for the group’s first full-scale diplomatic meeting in Yekaterinburg, Russia, in 2009. Later that year, the inaugural BRIC summit, attended by leaders from all four nations, focused on improving the global economic situation and reforming financial institutions to give developing countries a stronger voice.

A significant outcome of the 2009 summit was the announcement of the need for a new global reserve currency. The group proposed a system that would be stable, predictable, and diverse to counter the dominance of the U.S. dollar. Though the statement was carefully worded, it triggered a decline in the dollar’s value, marking BRIC’s growing influence. This meeting set the stage for deeper cooperation and paved the way for the group’s evolution into the BRICS alliance.

Expansion of BRICS

The 2010 Expansion

In 2010, South Africa initiated its journey to join the BRIC group. By December, China extended a formal invitation, which was supported by all BRIC members. On December 24, 2010, South Africa officially joined the alliance, marking a significant milestone. The group was renamed BRICS, with the “S” representing South Africa. This expansion highlighted the bloc’s growing inclusivity and global influence. In April 2011, South Africa’s President, Jacob Zuma, attended the BRICS summit in China as a full member, solidifying its role in the alliance.

The 2024 Expansion

In 2024, BRICS underwent significant changes, expanding its global reach and influence. The process began in January, with Iran, Egypt, Ethiopia, and the UAE officially joining as full members. However, Argentina withdrew its application following a leadership change, and Saudi Arabia delayed its decision, leaving its membership uncertain. This expansion aimed to strengthen the bloc’s vision of a multipolar world, challenging Western dominance. Supporters viewed the inclusion of Global South nations as a step toward creating a balanced global order.

Later, in October 2024, the alliance extended partnerships to 13 additional countries, including Algeria, Indonesia, and Turkey, without granting full membership. This move showcased BRICS’ strategy of broadening its alliances to enhance collaboration among developing economies. The expansion highlighted growing interest from nations seeking alternatives to Western-led frameworks. With these developments, BRICS cemented its role as a platform for fostering unity among emerging markets and shaping global economic and political dynamics.

Financial architecture of BRICS

BRICS’ financial framework includes the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA). Established through a treaty in 2014, both became operational in 2015.

New Development Bank (NDB)

The New Development Bank (NDB), also known as the BRICS Development Bank, is a key institution within the BRICS financial framework. Established to support infrastructure and sustainable development projects, the bank can lend up to $34 billion annually. Its initial capital was $50 billion, with contributions of $10 billion from each founding member—Brazil, Russia, India, China, and South Africa. Over time, the bank’s capital expanded to $100 billion, reflecting its growing role in financing large-scale projects. South Africa hosts the African regional headquarters, underscoring the bank’s commitment to development across continents.

In 2021, the NDB expanded its reach by including Bangladesh, Egypt, the UAE, and Uruguay as new members. By 2020, it had already financed 53 projects worth $15 billion, emphasizing its effectiveness in addressing infrastructure gaps. The bank plays a vital role in promoting economic growth and cooperation among the allied nations and beyond. Its inclusive membership and strategic investments make it a cornerstone of the bloc’s efforts to reshape global financial systems.

BRICS Contingent Reserve Arrangement

The BRICS Contingent Reserve Arrangement (CRA) safeguards member countries against global financial pressures, including currency instability. Established in 2015, it provides an alternative to the International Monetary Fund (IMF), emphasizing South-South cooperation. The CRA emerged from the Treaty for its establishment, signed in Fortaleza in 2014. It addresses economic volatility faced by emerging economies during rapid liberalization. The CRA became operational after ratification by all BRICS nations, announced at the 7th BRICS Summit. Its inaugural meetings were held in Ankara, Turkey, in September 2015.

Conclusion

BRICS continues to evolve as a dynamic force in global politics and economics, uniting diverse nations with shared goals. Through financial frameworks, strategic expansion, and collaboration, the bloc challenges traditional power structures. As BRICS grows, it offers a platform for emerging economies to shape a balanced, multipolar world order.

As one of the leading figures of Russia, Vladimir Putin has an enormous influence within the alliance. Read more about the Russian President in the biography of Vladimir Putin.

FAQs