BRICS

GLOBAL TRADE &

BRICS
BRICS was formed in 2009 as a coalition
of emerging economies (Brazil, Russia,
India, China) aiming to reshape
global governance and challenge
the dominance of Western-led
institutions. Over the years, the group
has expanded its role, South Africa
joined in 2010 also with the recent
inclusion of Egypt, Ethiopia, Iran, and
the UAE under BRICS Plus, significantly BRICS does not exist in form
enhancing its economic footprint. of organization, but it is
an annual summit
between the supreme
leaders of five nations. The
BRICS Leaders’ Summit is
convened annually.
01
● Origins: BRIC (2001): The concept of
Evolution
BRICS dates back to 2001, when
economist Jim O’Neill coined the term
of BRICS+
“BRIC” to identify the four emerging
● First Expansion to BRICS (2010):
03
economies—Brazil, Russia, India, and
China. In 2010, South Africa was

● The idea was primarily focused on invited to join the group,

economic cooperation, recognizing the officially transforming BRIC into

rising influence of these nations in the BRICS.

global market.
04 ● New Development Bank (NDB):
Established in 2014, the NDB aimed to

02 ● The grouping was first informally formed

during a meeting of the leaders of Brazil,
finance infrastructure and sustainable
development projects in emerging
Russia, India, and China (BRIC) on the economies.
sidelines of the G8 (now G7) Outreach
Summit in St.Petersburg, Russia, in
2006, this was later formalised during
the 1st BRIC Foreign Ministers' Meeting in
New York in 2009.
05
● Contingent Reserve Arrangement
Evolution
(CRA): Established in 2015, the CRA
was designed to provide emergency
of BRICS+
liquidity to BRICS countries in times of
economic instability.
● On the last few days of the Russian

● Expansion and Diversification

08 BRICS Presidency, Belarus, Bolivia,
06 (2024 Onwards): In 2024, BRICS Kazakhstan, Cuba, Malaysia, Thailand,

took a significant step forward by Uganda, Uzbekistan and Nigeria were

expanding its membership to announced as ‘partner countries’ of

include Egypt, Ethiopia, Iran, the group as of January 1st, 2025.

and the United Arab Emirates

(UAE).

● Saudi Arabia has put its

09 ● Indonesia has formally joined the BRICS
group on January 6th 20225
07 membership on hold.
● Argentina declined the invitation
it had previously accepted.
BRICS+

BRAZIL RUSSIA INDIA CHINA SOUTH AFRICA

EGYPT ETHIOPIA IRAN UAE INDONESIA

PARTNER NATIONS

BELARUS BOLIVIA CUBA KAZAKHSTAN MALAYSIA

NIGERIA THAILAND UGANDA UZBEKISTAN

ARGENTINA On August 24, 2023, Argentina’s former President Alberto
Fernández accepted an invitation to join the expanded BRICS bloc (BRICS+)
and said it offered a new future for the country. Argentina was set to become

?
a full member on January 1, 2024. However, this plan changed with the
election of new President Javier Milei, who took office on December 10, 2023.
In a letter to BRICS members on December 22, 2023, Milei rejected the
invitation, stating he did not find it appropriate to join the bloc,
indicating a shift in foreign policy towards the United States and
Israel.

SAUDI ARABIA The Saudi membership in BRICS was set to begin in February 2024, but the monarchy
announced at the last minute that it would not join yet. A Saudi official source informed Reuters that the
country is still considering the invitation to become a member, stating, “Saudi Arabia has not yet
responded to the invitation to join BRICS. It is still under consideration. ”
Saudi Arabia’s decision appears to be affected by BRICS inviting Iran and Russia's strong stance
against the U. S. dollar, which could turn BRICS into an anti-Western group and threaten Saudi
Arabia's relationship with the U. S.Furthermore, the bloc’s inclusion of Iran and the UAE places the
countries on equal footing with Saudi Arabia at a time when Riyadh seeks to project itself as the
regional leader.
TURKEY Turkey’s BRICS application is a watershed
moment in geopolitics. If Turkey joins BRICS as a full
member or partner state, it would become the first
NATO member and longtime candidate for European
Union membership to have an active role in an entity
seen by some analysts as a
challenger to Western predominance.

Turkey’s diplomatic demarche is yet another sign that the

global south is rising in world affairs, and it underscores
the growth of active nonalignment as an ideology. But it
is not a major break in Turkish foreign policy: Ankara’s
BRICS application is an extension of its international
balancing act, which aims to diversify alliances while
maintaining ties with the West.
 BRICS

Objectives of BRICS Areas of Cooperation of BRICS

BRICS was created to: ○ Finance and central banking

○ Trade and business forums

○ Promote trade among member countries.
○ Health and science
○ Support economic development and improve
○ Security concerns, such as terrorism and
the living standards of people in these
agriculture
nations.
○ Youth initiatives and disaster
○ Provide an alternative to traditional global
management.
financial systems, like the International

Monetary Fund (IMF) and the World Bank.

1. Economic Cooperation 2. People-to-People exchange

There are rapidly growing trade and BRICS members have recognised the
investment flows between BRICS need for strengthening People-to-
countries as well as economic People exchanges and to foster closer
cooperation activities across a range cooperation in the areas of culture,
of sectors. port, education, film and youth.

Agreements have been concluded in People-to-People exchanges seek to

the areas of Economic and Trade forge new friendships; deepen relations
Cooperation; Innovation Cooperation, and mutual understanding between
Customs Cooperation; strategic BRICS peoples in the spirit of openness,
cooperation between the BRICS inclusiveness, diversity and mutual
Business Council, Contingent Reserve learning.
Agreement and the New
Development Bank. Such People to people exchanges
include the Young Diplomats Forum,
These agreements contribute to Parliamentarian Forum, Trade Union
realisation of the shared objectives of Forum, Civil BRICS as well as the Media
deepening economic cooperation and Forum.
fostering integrated trade and
investment markets.
3. Political and Security Cooperation 4. Cooperation Mechanism

BRICS member political and security Cooperation among members is

cooperation is aimed at achieving peace, achieved through:
security, development and cooperation
for a more equitable and fair world. Track I: Formal diplomatic engagement
between the national governments.
BRICS provides opportunities for sharing
policy advice and exchanges of best Track II: Engagement through
practices in terms of domestic and government-affiliated institutions, e.g.
regional challenges as well as advancing state-owned enterprises and business
the restructuring of the global political councils.
architecture so that it is more balanced,
resting on the pillar of multilateralism. Track III: Civil society and People-to-
People engagement.
BRICS is utilised as a driver for South
Africa’s foreign policy priorities including
the pursuit of the African Agenda and
South -South Cooperation.
Impacts of BRICS on global
institutional reforms

The main reason for co-operation to start among the BRICs

nation was the financial crisis of 2008. The crises raised
doubts over sustainability of the dollar-dominated monetary
system.

The BRICs called for the “the reform of multilateral institutions in

order that they reflect the structural changes in the world
economy and the increasingly central role that emerging
markets now play”.

BRICs managed to push for institutional reform which led to

International Monetary Fund (IMF) quota reform in 2010. Thus
the financial crises had momentarily reduced western legitimacy
and briefly let the BRICs countries become “agenda setters” in
multilateral institutions.
NEW DEVELOPMENT BANK

Headquarters Location

The New Development Bank (NDB) is headquartered in Shanghai,

China, a global financial center that enhances its operational
capabilities and strategic influence in the region.

Establishment Background

The idea for the NDB was proposed during the Fourth BRICS
Summit held in New Delhi in 2012, aimed at mobilizing resources
specifically for infrastructure and sustainable development projects
in BRICS countries and other emerging economies.

Formal Agreement Signing

The NDB was officially established when leaders signed the

Agreement at the Sixth BRICS Summit in Fortaleza, Brazil, in 2014,
marking a significant step towards enhanced financial cooperation
among member countries.
NEW DEVELOPMENT BANK

Cooperation and Support

The Fortaleza Declaration emphasized that the NDB would

strengthen cooperation among BRICS nations and provide
supplemental support to existing multilateral and regional financial
institutions, facilitating global development efforts.

Key Operational Areas

NDB focuses on several key areas of operation, including clean

energy initiatives, transport infrastructure projects, irrigation
systems, sustainable urban development, and fostering economic
cooperation among its member countries.
Contingent Reserve Arrangement

Establishment of CRA in 2014

The BRICS Contingent Reserve Arrangement (CRA) was established in

2014 during the Sixth BRICS summit, held in Fortaleza, Brazil. This
initiative was part of the Fortaleza Declaration, which aimed to
enhance economic resilience among member nations.

Purpose of CRA

The primary objective of the CRA is to provide short-term liquidity

support to BRICS member countries. This is achieved through currency
swaps, which serve as a financial safety net during economic distress.
It would also contribute to strengthening the global financial safety net
and complement existing international arrangements (IMF).
Contingent Reserve Arrangement

Mitigating Balance of Payments (BOP) Crises

CRA is designed to help mitigate Balance of Payments (BOP) crisis

situations, offering essential financial resources to stabilize economies
facing difficulties in meeting international payments.

Strengthening Financial Stability

By providing liquidity support, the CRA plays a crucial role in

strengthening financial stability within the BRICS nations, enhancing
their ability to withstand global economic shocks.
Contingent Reserve Arrangement

Initial Committed Resources

The CRA was launched with an initial total committed resource pool of
USD 100 billion. This significant amount underscores the commitment
of BRICS nations to collaborate on financial stability and crisis
resolution.
What is the impetus for
expansion?
The push has been driven largely by China, now the world’s
pre-eminent industrial power, which is trying to boost its
global clout.

South Africa and Russia have backed the expansion. India was
initially hesitant because it was concerned that a bigger
BRICS would transform the group into a mouthpiece for China,
while Brazil was worried about alienating the West —
although both eventually agreed to an enlargement.

For new members, BRICS offers the potential for easier access
to financing from its wealthier members, and a political venue
independent of Washington’s influence.
What is the impetus for
expansion?
The push has been driven largely by China, now the world’s
pre-eminent industrial power, which is trying to boost its
global clout.

South Africa and Russia have backed the expansion. India was
initially hesitant because it was concerned that a bigger
BRICS would transform the group into a mouthpiece for China,
while Brazil was worried about alienating the West —
although both eventually agreed to an enlargement.

For new members, BRICS offers the potential for easier access
to financing from its wealthier members, and a political venue
independent of Washington’s influence.
What does a larger
BRICS mean for the
world?
The addition of major fossil-fuel producers may give the bloc more scope to challenge
the dollar’s dominance in oil and gas trading by switching to other currencies, a concept
referred to as dedollarization.

That prospect has drawn the ire of US President-elect Donald Trump, who said any
nation that abandons the greenback can forget about selling anything to America and
find another “sucker” to trade with.

Analysts at Bloomberg Economics say the expansion of BRICS is “more about politics
and less about economics.” Beijing is trying to build an alternative world order by
pulling southern hemisphere countries into its economic orbit in a challenge to US
hegemony.

The enlarged alliance may become a stronger counterweight to the Group of Seven
industrialized nations — the US, Canada, France, Germany, Italy, Japan and the UK.
G7 vs BRICS
A chart published by Visual Capitalist shows that their combined economic might is drawing
increasingly close to the size of the G-7 in economic terms.

New Members and Partners

As of this year, they are expected to comprise 29 percent of the world economy in terms of GDP,
against the G-7’s 45 percent. Moreover, the plus sign hints at the fact that they added five new
members last year and eight new partner countries, with plans afoot to get new countries to join the
list, such as Vietnam, in 2025.

Overtaken in 2024

But some statistics go even further than that. Statista, for example, indicates that GDP in the BRICS
zone overtook the G-7 on a purchasing power basis in 2018, while in 2024 that gap had widened to
35 percent against the latter’s 30 percent.
But when it comes to anything intergovernmental, it is not just about business and there has been a
great deal of hand-wringing and skepticism about cohesion and governance related to the new bloc,
as a Britannica encyclopedia entry indicates.
Can a BRICS currency
replace the dollar?
The BRICS countries have been working to reduce the US dollar's
influence in international trade for over a decade by increasing the use of
their own currencies, particularly China's renminbi.
There is also a push to introduce a new, BRICS-wide currency, with
Brazil's President Luiz Inácio Lula da Silva being a major proponent.
Other monetary proposals include founding a new cryptocurrency or
using a combined basket of BRICS currencies.
However, skeptics argue that these ambitions are far from achievable
due to the need for major political compromises, such as a banking union
and fiscal union.
What has divided BRICS
members?
The BRICS countries face increasing internal tensions and rivalry among members,
including China and India's border dispute and competition for global leadership.
The group struggles to make decisions, and Russia's invasion of Ukraine has
deepened fissures.
Most BRICS members seek a middle ground, while others ignore Western sanctions.
Economic and political instability in member countries, such as Brazil and South
Africa, has shaken confidence in BRICS efforts.
China's economic slump threatens the group's dynamism.
Other major dividing lines include tensions between democracies and autocracies,
rivalries between Saudi Arabia and Iran, and Egypt and Ethiopia.
BRICS+ could make a significant global impact in
the following five areas.
1. ENERGY
2. TRADE NETWORKS
3. INFRASTRUCTURE AND DEVELOPMENT FINANCING
4. MONETARY POLICY
5. TECHNOLOGICAL COOPERATION
BRICS 2025

The motto of the Brazilian BRICS

presidency this year is: “Strengthening
cooperation in the ‘Global South’ for more
inclusive and sustainable governance” and
thus fits in seamlessly with the priorities of
Brazil's G20 presidency last year. The
highlight of the BRICS summit is expected
to take place in Rio de Janeiro in July.

Brazil is pursuing the following

five goals with its presidency:
BRICS 2025
1. Facilitating trade and investment: Promoting economic
integration through the development of efficient payment
systems
2. Regulating artificial intelligence: promoting inclusive and
responsible AI governance for development purposes
3. Tackling climate change: improving financing mechanisms
to support global efforts in coordination with the COP 30
climate summit (also taking place in Brazil in November)
4. Cooperation in the field of public health: strengthening
cooperation projects between member countries with a
focus on improving public health systems
5. Institutional development: strengthening the internal
framework of BRICS to ensure effective governance and
decision-making
REFERENCES

★ https://infobrics.org/
★ https://foreignpolicy.com/
★ https://blogs.lse.ac.uk/
★ https://www.reuters.com/
★ https://www.aljazeera.com/
★ https://vajiramandravi.com/

THANKYOU ESKEVI