NEW DELHI: The recently concluded BRICS Summit in Kazan, Russia, was significant for several reasons. For one, it saw the resumption of formal bilateral talks between India and China, signalling a thaw in frosty relations between the world’s two most populous countries, representing 2.8 billion people. Significantly, the meet also accepted 13 new countries as ‘partners’, taking the influence and size of the grouping to greater levels.
Over the next two decades, the size of the bloc is slated to exceed the economies of the group of seven (G7) Western countries led by the US. The 13 nations that have become partners of the BRICS are Algeria, Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Nigeria, Thailand, Turkiye, Uganda, Uzbekistan, and Vietnam. These partner nations will eventually become full members of BRICS.
From BRICs to BRICS
Goldman Sachs economist Jim O’Neill coined the term BRIC (Brazil, Russia, India, and China) in a 2001 research paper titled ‘Build Better Global Economic BRICs’ to project how these four dynamic nations, if their growth pace was maintained, would dominate the global economy by 2050.
O’Neill projected that the ‘weight of the BRICs’ would grow exponentially over the coming decade and the quartet would influence the global economy to such an extent that the G7 would be forced to accommodate these countries.
The moniker, BRICs, instantly took off and created a lot of interest among economists and strategic affairs experts. Goldman Sachs released a second paper titled ‘Dreaming with BRICs: The Path to 2050’ in 2003, positing that the BRICs could overtake the largest Western economies by 2039.
Russian President Vladimir Putin was among the first embrace the idea of BRICs. He took proactive steps to bring the others on board to form a bloc which would grow to become a counterweight to the Western-dominated global economy. Russia hosted the first official BRIC summit in 2009.
South Africa joined a year later on an invitation from China, forming a formidable five-country grouping officially called BRICS (Brazil, India, China, and South Africa).
In 2023, decks were cleared for taking on board five more in a major expansion drive: Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates. Argentina was also invited and set to join the bloc but its newly elected President Javier Milei dropped that plan as he wanted to align with the West. The other five countries joined the grouping early this year.
Too big to ignore
The 10 BRICS members now comprise more than a quarter of the global economy and almost half of the world’s population. The group is poised to exert influence over the wars in the Gaza Strip and Ukraine, the shape of the global economic system, the competition between China and the West, and efforts to transition to clean energy.
According to the Economist Intelligence Unit (EIU), after 2045, the size of the economies of the BRICS+ countries will exceed the economies of the G7 as the gap between these economies gradually reduces.
For instance, in 2020, the size of the economies of the BRICS+ countries was $20 trillion while that of the G7 members was $40 trillion. EIU estimates that by 2025, the economies of BRICS+ will reach $30 trillion while that of G7 will exceed $50 trillion. In 2030, this number will be $40 and $60 trillion, respectively.
In 2040, the difference will gradually decrease, and in 2045, the gross domestic product production of both groups of countries will be equal to $100 trillion. Also, India's significance and role in BRICS+ will further increase as the economy grows.
Speaking at the latest BRICS summit in Russia, Prime Minister Narendra Modi hinted at the grouping’s important role in shaping global affairs, indicating the bloc has grown to become too big to ignore.
“BRICS accounts for 40% of the world’s humanity and about 30% of the global economy. In the last two decades, BRICS has achieved many milestones. This organisation will soon emerge as a more effective medium to face global challenges,” Modi said.
The statement underlines the group’s long-term strategic interests to bring about a more multipolar world, reducing the dominance of the US and its allies, who make up the G7—France, UK, Germany, Japan, Italy and Canada.
In the recently concluded BRICS summit, Putin mooted a proposal to create a BRICS-based grain exchange. “BRICS countries are amongst the world’s largest producers of grain, vegetables, and oilseeds. We propose opening a BRICS grain exchange which would facilitate the formation of fair and predictable price indicators for products and raw materials, taking into account their special role in ensuring food security,” Putin said.
Apart from ensuring food security, the grouping can also disrupt the energy market dynamics, if it wants. Russia, being one of the world's top crude oil producers, is already a major player in the global energy market. Now, with the inclusion of Iran and the UAE, the BRICS’ cumulative oil production accounts for almost 30% of global oil output, says a report by the Energy Institute.
India in both camps
While India is a founding member of BRICS, it gets invited to G7 events as well. Putting the evolution of BRICS in context, External Affairs Minister S Jaishankar said last month, “Why the club? Because there was another club! It was called the G7 and you will not let anybody else into that club. So, we go and form our own club.”
He wondered why there is unease about BRICS when the G7 is comfortable alongside the G20. If the G7, a group of advanced economies, can remain intact despite the presence of the G20, then BRICS, a coalition of emerging economies, should also be allowed to exist, he reasoned.
BRICS vs G7
In 2020, the BRICS (Brazil, Russia, India, China and South Africa) nations surpassed the G7 countries in the proportion of the global gross domestic product (GDP) as assessed through purchasing power parity (PPP). By 2023, this disparity had expanded, with the BRICS collectively controlling 32% of the world’s GDP.
There is also talk on increasing trade among BRICS partner nations using local currencies. This will reduce the dependence on the US dollar.
Speaking at the Kazan summit, Chinese President Xi Jingping waxed eloquent about the need for a payment system for BRICS and beyond. “There is an urgent need to reform the international financial architecture and BRICS must play a leading role in promoting a new system that better reflects the profound changes in the international economic balance of power,” said Xi.
Speaking in a similar vein, Putin said the BRICS would expand its role in international affairs and reshape the global order. The BRICS needs to keep its momentum and resist pressures, both covert and overt, from the US and other Western powers if it has to shake up the old world order. The Kazan summit may have paved a few more bricks in that direction.
