In today’s rapidly evolving geopolitical landscape, **BRICS** has emerged as a significant alliance of major emerging economies. Comprising **Brazil, Russia, India, China, and South Africa**, this bloc represents a collective force shaping global economics, politics, and trade.
But what exactly is BRICS, and why does it matter? This step-by-step guide will break down everything you need to know—from its origins and objectives to its impact on the world stage.
Step 1: Understanding the Origins of BRICS
The term **BRIC** was first coined in 2001 by **Jim O’Neill**, an economist at Goldman Sachs, to highlight the growing influence of **Brazil, Russia, India, and China** in the global economy. At the time, these nations were recognized for their rapid economic growth, large populations, and increasing geopolitical influence.
In **2009**, the four countries held their first official summit in **Yekaterinburg, Russia**, marking the formal creation of the **BRIC group**. Later, in **2010, South Africa** was invited to join, transforming the alliance into **BRICS**.
Why Was South Africa Added?
South Africa’s inclusion was strategic, as it represented the African continent—a region with vast economic potential. This expansion also helped diversify the group’s geopolitical reach.
Step 2: The Core Objectives of BRICS
BRICS was formed with several key goals in mind:
1. **Economic Cooperation** – Strengthening trade and investment among member nations.
2. **Political Collaboration** – Promoting a **multipolar world** (reducing Western dominance in global affairs).
3. **Financial Independence** – Reducing reliance on the **U.S. dollar** by exploring alternative payment systems.
4. **Development Initiatives** – Supporting infrastructure and sustainable growth in developing economies.
5. **Global Governance Reform** – Advocating for changes in institutions like the **IMF and World Bank** to give emerging economies more influence.
Step 3: How BRICS Operates
Unlike formal alliances like the **European Union (EU)** or **NATO**, BRICS functions as a **loose coalition** without a permanent secretariat or binding treaties. Instead, it relies on:
- **Annual Summits** – Where leaders discuss economic policies, global challenges, and joint initiatives.
- **Working Groups & Committees** – Focused on areas like trade, health, science, and technology.
- **The New Development Bank (NDB)** – Established in **2014** to fund infrastructure projects in BRICS and other developing nations.
- **Contingent Reserve Arrangement (CRA)** – A $100 billion fund to provide financial support during economic crises.
Step 4: The Economic Power of BRICS
BRICS nations account for:
- **Over 40% of the world’s population**
- **Around 25% of global GDP (PPP terms)**
- **Significant natural resources** (oil, minerals, agriculture)
### **Key Economic Strengths:**
- **China & India** – Manufacturing and IT powerhouses.
- **Russia & Brazil** – Major energy and commodity exporters.
- **South Africa** – A gateway to African markets.
The group’s combined economic might challenges the dominance of the **G7** (U.S., UK, Germany, etc.), making BRICS a counterbalance in global trade and finance.
Step 5: BRICS Expansion and New Members
In **2023**, BRICS announced it would admit **six new members** in 2024:
- **Egypt**
- **Ethiopia**
- **Iran**
- **Saudi Arabia**
- **UAE**
- **Argentina** (later withdrew)
This expansion signals BRICS’ ambition to grow into a **larger coalition of Global South nations**, further increasing its influence.
Step 6: Challenges Facing BRICS
Despite its potential, BRICS faces several hurdles:
1. **Political Differences** – Member states have conflicting interests (e.g., India-China border disputes).
2. **Economic Inequality** – China dominates the group economically, creating imbalances.
3. **Currency Dilemma** – While pushing for **de-dollarization**, no single BRICS currency exists yet.
4. **Geopolitical Tensions** – Russia’s war in Ukraine and Western sanctions complicate cooperation.
Step 7: The Future of BRICS
BRICS is positioning itself as a **key player in a shifting world order**. Potential future developments include:
- **A Common BRICS Currency?** – Discussions are ongoing, but challenges remain.
- **More Members Joining** – Over 40 countries have expressed interest.
- **Stronger Trade Alliances** – Reducing dependency on Western markets.
If BRICS can overcome internal divisions, it may reshape global economics and politics in the coming decades.
Final Thoughts: Why BRICS Matters
BRICS represents a **new era of multipolarity**, where emerging economies demand a greater say in global affairs. Whether through economic partnerships, political alliances, or financial innovations, this bloc is challenging traditional power structures.
For investors, policymakers, and global citizens, understanding BRICS is essential—it’s not just an acronym; it’s a **movement redefining the future of international relations**.
Would you like to see BRICS introduce its own currency? How do you think it will impact the U.S. dollar? Share your thoughts!