The prestigious BRICS summit is currently underway in the vibrant heart of South Africa. Leaders from Brazil, Russia, India, China, and South Africa are convening to forge new avenues of collaboration, exchange ideas, and propel these emerging economies into a future of mutual growth and shared prosperity.

As we witness this event, let's delve into the history, ambitions, and future outlook of BRICS – a game-changing alliance that has been reshaping global dynamics since its inception.

BRICS is a group of five emerging economies that are looking to establish their own global economic and trade frameworks.

What is BRICS?

In 2001, Goldman Sachs analyst Jim O'Neill introduced the initial acronym, BRIC, in his paper addressing emerging economies. O'Neill highlighted the exceptional GDP growth prospects of Brazil, Russia, India, and China – collectively forming BRIC – surpassing those of the G7 nations.

The G7, encompassing the United States, Canada, France, Germany, Italy, Japan, and the United Kingdom, constitutes a collection of the world's more advanced economies.

O'Neill's analysis indicated that by the close of 2000, the combined GDP of Brazil, Russia, India, and China accounted for approximately 23.3% of global GDP. He foresaw a surge in the GDP of these BRIC nations and proposed the potential inclusion of BRIC representatives into the G7 group.

In 2006, the original four countries initiated an informal alliance aimed at contributing to the global economy. Subsequently, South Africa became a member in 2011, leading to the evolution of the acronym into BRICS.

As of 2023, BRICS has exceeded the global GDP contribution of the G7 nations, as indicated by the group's assertion that BRICS now constitutes almost a third of worldwide economic activity.

Leaders from the BRICS member states convene on an annual basis, and the ongoing summit in Johannesburg, South Africa, is anticipated to be the most significant to date, with invitations extended to 69 leaders.

Scramble to join BRICS

More than 40 nations, among them Iran, Saudi Arabia, the United Arab Emirates, Argentina, Algeria, Bolivia, Indonesia, Egypt, Ethiopia, Cuba, the Democratic Republic of Congo, Comoros, Gabon, and Kazakhstan, have demonstrated their intent to participate in the forum, as confirmed by South Africa, the chair of the 2023 summit.

These countries perceive BRICS as an alternative to international organizations perceived as being controlled by conventional Western powers. They aspire to secure advantages such as developmental funding, augmented trade, and heightened investments through their potential membership in BRICS.

BRICS has consistently criticized the Western world for its inconsistency and selective application of international regulations and standards. Within BRICS, member nations have effectively adjusted and influenced the shift toward a multipolar global order that can limit the United States' range of actions while expanding the influence of emerging powers.

Aspiring members of BRICS also recognize that the group provides a form of insurance against potential diplomatic isolation as exemplified by the case of Russia's President, Vladimir Putin. Despite calls from various countries to disinvite Putin due to Russia's involvement in the conflict with Ukraine, he has not been excluded from BRICS gatherings, such as the Johannesburg summit.

An additional factor driving the eagerness of countries to join BRICS is the New Development Bank (NDB). Since its inception in 2014, the NDB has funded nearly 100 projects totalling over $34 billion, primarily in critical infrastructure sectors like water, transportation, clean energy, and digital technology.

BRICS: A threat to dollar hegemony?

The supremacy of the US dollar in international trade gives it an almost unrivalled standing as the predominant global currency, embodying a hegemonic status. A growing chorus of observers however believes this dollar-centred order is coming to an end.

Over the course of the last year, Russia, China, and Brazil have been progressively adopting currencies other than the dollar for their cross-border dealings. Furthermore, nations such as Iraq, Saudi Arabia, and the United Arab Emirates are currently investigating substitutes for the dollar. Central banks have similarly pursued diversification of their currency reserves, with a move away from the dollar and towards broader international considerations.

Africa’s Afreximbank launched a Pan-African Payment and Settlement System (PAPSS), observing that the ground-breaking platform will save Africa more than US$5 billion annually in payment transaction costs. PAPSS is expected to boost intra-African trade by transforming and facilitating payment, clearing and settlement for cross-border trade across Africa.

There is talk of the BRICS nations developing their own currency akin to the Euro. BRICS ambition is slowly being shown through the steady establishment of huge networks of interlinked mechanisms that connect governmental officials, businesses, academics, think tanks and other stakeholders across countries. Regardless of the negligible movement on the common currency, there are multiple issues on which BRICS finance ministers as well as central bankers regularly coordinate – and the potential for developing new financial collaborations is particularly strong.

Looking Ahead!

As the summit progresses in South Africa, the world is poised to witness the continued maturation of BRICS and its expanding role on the international stage. The ambitions of BRICS extend far beyond economic prowess – they encompass technological collaboration, sustainable development, and joint efforts to tackle global challenges.

BRICS is setting its sights on a future where the member nations become catalysts for positive change, ensuring a balanced and equitable world order. This involves fostering partnerships that promote innovation, investment in critical sectors like infrastructure and clean energy, and the pursuit of sustainable growth models that prioritize environmental stewardship.

In the years to come, BRICS is expected to strengthen its collaborative initiatives, expand its membership base, and amplify its influence on global affairs. The alliance's commitment to diplomacy and collective action positions it as a force for reshaping the international landscape in a way that respects the aspirations of emerging economies and brings about a more interconnected and harmonious world.

The ongoing summit is not only a gathering of nations but represents a convergence of visions and aspirations. From its humble beginnings as an economic concept to its current status as a global powerhouse of cooperation, BRICS embodies the spirit of collective determination to build a future that transcends traditional boundaries.

As we watch the proceedings of the BRICS summit, we witness the dawn of a new era – an era where emerging economies rise in unity to redefine the global narrative. The BRICS alliance serves as a reminder that when nations collaborate and harness their collective potential, they have the power to shape a brighter tomorrow for us all.