Origin of BRICS

BRICS brings together five of the largest developing countries of the world, representing around 41 per cent of the global population, around 24 per cent of the global GDP, and around 16 per cent of global trade.

The acronym BRIC was first used in 2001 by Goldman Sachs in their Global Economics Paper, ‘The World Needs Better Economic BRICs’. On the basis of econometric analyses, the paper projected that the four economies of Brazil, Russia, India, and China would be among the world’s largest economies in the next 50 years or so.

As a formal grouping, BRIC started after the meeting of the leaders of Russia, India and China in St. Petersburg on the margins of the G8 Outreach Summit in 2006. The grouping was formalised during the first meeting of BRIC Foreign Ministers on the margins of the UNGA in New York in 2006.

The first BRIC Summit was held in Yekaterinburg, Russia, in 2009. It was decided to include South Africa at the BRIC Foreign Ministers’ meeting in New York in 2010, and accordingly, South Africa attended the 3rd BRICS Summit in Sanya, China, in 2011.

Expansion

The Johannesburg declaration said that BRICS countries had reached a consensus on the guiding principles, standards, criteria and procedures of the expansion process, but these have not been made public.

Indian officials said New Delhi took the lead in forging consensus on membership criteria and selection of new members. New Delhi’s efforts were guided by its objective to incorporate Strategic Partners as new members.

India has strategic partnerships with four of the new six members — Saudi Arabia, UAE, Iran and Egypt.

By growing to a size of 11 members, BRICS has become larger than ASEAN (10 members) and Shanghai Cooperation Organisation (9).

But while many portrayed the new expanded grouping as an alternative to western blocs like the G7, Delhi doesn’t view this as an “anti-West” grouping.

In fact, France, one of the P-5 (permanent members of the UN Security Council) countries which is also a member of G7, is learnt to have expressed interest in engaging with the BRICS more actively. Whether Paris becomes a member is a question to be agreed through consensus.

The new entrants are emerging economies with the potential to scale up. Many belong to the Global South or the developing countries, and want to hedge their bets in the increasingly polarised geopolitical landscape.

Africa and Latin America

From Latin America, despite Brazil’s reluctance, regional rival Argentina was selected as a new member. With a Gross Domestic Product (GDP) of approximately US$610 billion, Argentina is one of the largest economies in Latin America.

From Africa, Ethiopia and Egypt made the cut, over Nigeria, Algeria and Senegal.

According to the World Bank, Ethiopia is the second most populous nation in Africa after Nigeria, and one of the fastest-growing economies in the region, with an estimated 6.4% growth in FY 2021/22.

Egypt occupies a crucial geo-strategic location — 12 per cent of global trade passes through the Suez Canal — and is a key player in the region. An important economic powerhouse, it is an emerging economy with reforms brought in by the government led by President Abdel Fattah El-Sisi.

But both Argentina and Egypt have strong economic dependency ties with China.

Early this month, Beijing lent a helping hand to Argentina so that it could avert a default with the International Monetary Fund for the second time in 30 days. The cash-strapped country tapped almost $3 billion of a Beijing currency swap line to pay the multilateral lender.

China’s bilateral trade with Egypt is currently at $15 billion, double that of India’s $7.26 billion in 2021-22. Sisi has been wooing Chinese investments, and has travelled to China seven times in the past eight years.

Ethiopia, a Christian-dominated country, is seen as a careful balancer of both the US and China.

Countries from Asia

Of the three Asian countries, Saudi Arabia and UAE are strong partners of the US, and along with Egypt, have close ties with Washington.

Iran, which has had a complicated relationship with the US, has been wooed by China in recent years. Tehran’s rulers are mindful of their place in history, but economic imperatives have prompted them to engage with Beijing strongly.

The inclusion of Saudi Arabia and the UAE is expected to lead to more mobilisation of financial resources for the New Development Bank, the BRICS alternative for developing countries.

By including these four, BRICS has also addressed the question that no Muslim-majority country is in the grouping.

One important point is that Saudi Arabia, UAE, Iran, Egypt and Ethiopia share a common regional space. This might give salience to the West Asian and North African region, and the rivalries and geopolitical tensions here might play out in the grouping as well.

These contradictions within the member countries could limit the potential of BRICS.

Russia, China’s stakes

With the expansion of the grouping, China is seen as trying to build its own bloc against the Western powers. But India has maintained that decisions have to be made “through consensus” — the guiding principle in the grouping — so that it is not completely led by Beijing.

In fact, this inclusion of six members has been projected as the first phase of the expansion, which leaves room for a second phase.

Russia, the other major player in the grouping, will host the next BRICS summit in Kazan in 2024. An expanded grouping of 11 members attending will work for Moscow, which has been facing diplomatic isolation. It will use the opportunity to portray Russia’s relevance despite Western pressures.

For India, the Chinese challenge remains the most pertinent. Delhi has the unenviable task of guarding against the grouping being swayed by Beijing, which wants to pack it with countries indebted to China.

Name

For now, the name of BRICS will remain the same, since officials feel it is a brand in itself. There were jokes during the negotiations on whether the grouping should be renamed ‘Wall’. But the Chinese were fine with the current name, as they call the grouping ‘Jin Zhuan’ in Mandarin, which means ‘golden bricks’.