BRICS is an intergovernmental organization comprising Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates.
The founding countries of Brazil, Russia, India, and China held the first summit in Yekaterinburg in 2009, with South Africa joining the bloc a year later.
Iran, Egypt, Ethiopia, and the United Arab Emirates joined the organisation on 1 January 2024.
Saudi Arabia is yet to officially join, but participates in the organisation's activities as an invited nation.
Combined, the BRICS members encompass about 30% of the world's land surface and 45% of the global population.
Originally identified to highlight investment opportunities, the grouping evolved into an actual geopolitical bloc, with their governments meeting annually at formal summits and coordinating multilateral policies since 2009.
Bilateral relations among BRICS are conducted mainly based on non-interference, equality, and mutual benefit.
The BRICS organization is commonly understood as an attempt to form a geopolitical bloc capable of counterbalancing the influence of Western-dominated global institutions such as the International Monetary Fund (IMF) and the World Bank.
The acronym “BRIC” (Brazil, Russia, India, and China) was first used by Goldman Sachs economist Jim O’Neill to describe the four economies that could, if growth were maintained, dominate the global economy by 2050.
At their first summit in 2009, the BRIC states affirmed their commitment to a multipolar world order and global non-interventionism and called for a new global reserve currency as an alternative to the U.S. dollar.
New BRICS currency could be in
place as early as 2025
Several leading analysts point out that a new international monetary system, called Unit, is likely to be unveiled as early as the BRICS summit in Kazan in October.
Since World War II, the US dollar has dominated international trade as the reserve currency, an era that could come to a definitive end as early as next year.
Pepe Escobar, a Brazilian geopolitical analyst who follows BRICS developments, points out that the so-called unit system has already gained support in the BRICS Business Council and is clearly included in the planning for the BRICS summit in Kazan, the capital of the Russian state of Tatarstan, in October.
Sanctions accelerate developments
Discussions on a new international monetary system have been underway within BRICS for some time, but are generally considered to have accelerated as a result of Western bloc sanctions against Russia, especially after the EU seized Russian currency and gold reserves abroad, then valued at more than $600 billion, which it sought to transfer to Ukraine.
Russia’s shift in energy trade, where it now sells large quantities of its oil to India, has also created a significant trade imbalance between the two countries, with Russia running a large surplus of Indian rupees. The trade relationship with fellow BRICS country Iran has also been a contributing factor, Escobar points out.
“Russian trade with Iran is unprofitable due to sanctions – neither side can make payments in dollars or euros”, Escobar explained in an article for Sputnik International.
There is no formal application process to join BRICS, but new members must be unanimously approved by existing ones. At the 2023 BRICS summit in South Africa, BRICS announced the admission of Saudi Arabia, Iran, the United Arab Emirates, Egypt, Ethiopia, and Argentina as new member states. The new members will officially join the organizatichangeon in January 2024, and, as of September 2023, no signs have been given to indicate that the organization will its name to reflect the new membership.
At the 2012 BRICS summit, after criticizing aspects of the IMF and the World Bank, members proposed the creation of a new international development bank to provide funding and loans for development projects in emerging economies. This New Development Bank (NDB) began operating in July 2014, with BRICS members having pooled $100 billion as the bank’s authorized capital. Each BRICS member holds an equal stake in the NDB and contributes an equal share to the bank’s assets. Alongside the NDB, BRICS launched the Contingency Reserve Agreement (CRA), meant to provide countries experiencing economic strain with liquid currency. Unlike the NDB, the CRA is not bound by an equal contribution stipulation, and China provided 41 percent of the agreement’s initial assets. BRICS members have discussed the creation of a common currency for international trade between member countries, but no concrete steps have been taken to accomplish this goal.
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