In an increasingly interconnected world, the concept of BRICS has become a significant player in global economics and politics. But what exactly is BRICS, and how did it come to be? In this article, we'll delve into the history and significance of BRICS, and explore its implications for the global economy.
The term BRICS was first coined in 2001 by Jim O'Neill, a British economist and former chairman of Goldman Sachs Asset Management. O'Neill used the acronym to describe the growing economic potential of Brazil, Russia, India, China, and South Africa. At the time, these countries were experiencing rapid economic growth, driven by large populations, abundant natural resources, and strategic locations.
The BRICS nations have a combined population of over 3.2 billion people, accounting for approximately 42% of the world's population. They also account for over 25% of the world's land area and 20% of global GDP. These numbers underscore the significant economic and demographic weight of the BRICS nations.
The first BRICS summit was held in 2009 in Yekaterinburg, Russia, and was attended by the leaders of Brazil, Russia, India, and China. South Africa joined the group in 2010, and the first BRICS summit with South Africa was held in 2011 in Sanya, China.
Since its inception, BRICS has evolved into a significant platform for cooperation and dialogue among its member nations. The group has established several institutions, including the BRICS Development Bank, the BRICS Contingent Reserve Arrangement, and the BRICS Business Council.
The BRICS Development Bank, established in 2014, is a multilateral development bank aimed at promoting economic cooperation and development among BRICS nations. The bank has a capital base of $50 billion and is headquartered in Shanghai, China.
The BRICS Contingent Reserve Arrangement, established in 2014, is a framework for providing liquidity support to BRICS nations in times of financial stress. The arrangement has a total capital base of $100 billion.
The BRICS Business Council, established in 2013, is a platform for promoting business cooperation and investment among BRICS nations. The council has several working groups focused on areas such as infrastructure, manufacturing, and innovation.
BRICS has also established several other initiatives, including the BRICS Network University, the BRICS Think Tank Council, and the BRICS Youth Summit. These initiatives aim to promote people-to-people exchanges, research cooperation, and youth development among BRICS nations.
Despite its achievements, BRICS faces several challenges, including differences in economic systems, political ideologies, and cultural values. The group also faces external challenges, such as the rise of protectionism and unilateralism in global trade and politics.
In recent years, BRICS has sought to expand its membership and cooperation with other emerging economies. In 2017, BRICS launched the "BRICS Plus" initiative, which aims to promote cooperation with other emerging economies in Africa, Asia, and Latin America.
In conclusion, BRICS has emerged as a significant player in global economics and politics. Its rise reflects the growing economic and demographic weight of the Global South, and its initiatives aim to promote cooperation and development among its member nations. As BRICS continues to evolve and expand its membership, it is likely to play an increasingly important role in shaping the global economy and politics.
UPDATE ON BRICS TODAY
The BRICS nations have been making significant progress in 2024, particularly with their plans to create a new reserve currency. The idea of a BRICS currency has been discussed for several years, but recent developments suggest that it's becoming a reality.
At the 2024 BRICS Summit held in Kazan, Russia, the member nations discussed the creation of a new currency, known as "the Unit," which would be backed by a basket of their respective currencies.¹ This move is seen as an attempt to reduce their dependence on the US dollar and promote economic integration among the member nations.
Russian President Vladimir Putin has been a strong advocate for the creation of a BRICS currency, and has even showcased a prototype of a possible BRICS banknote. However, Putin has also emphasized that the goal of the BRICS nations is not to move away from the US dollar-dominated SWIFT platform, but rather to deter the "weaponization" of the US dollar by developing alternative systems for using local currencies in financial transactions.
The BRICS nations have also made significant progress in expanding their membership. At the 2024 BRICS Summit, 13 nations signed on as BRICS partner countries, including Algeria, Belarus, Bolivia, Cuba, Kazakhstan, Malaysia, Nigeria, Thailand, Turkey, Uganda, Vietnam, and Uzbekistan.
In addition to the creation of a new currency, the BRICS nations are also working on a blockchain-based payment system, known as the BRICS Bridge multisided payment platform. This system would connect member states' financial systems using payment gateways for settlements in central bank digital currencies.
Overall, the BRICS nations are making significant progress in their efforts to promote economic integration and reduce their dependence on the US dollar. The creation of a new reserve currency and a blockchain-based payment system are just a few examples of the innovative solutions being developed by the BRICS nations.