The BRICS grouping, comprising Brazil, Russia, India, China, and South Africa, is a major political and economic force in the contemporary world. BRICS represents over 3 billion people and accounts for over 25% of global GDP. The coming together of these major emerging economies into a formal grouping has important political and economic implications. This paper analyses the political and economic factors that led to the formation of BRICS, the key goals and objectives behind its establishment, and its impact on global governance and economic cooperation.
The BRICS acronym was first coined by Goldman Sachs economist Jim O’Neill in 2001 to highlight the rising economic power of the Brazil, Russia, India, and China quartet of emerging economies. In 2006, the four countries’ foreign ministers held their first meeting in New York, initiating the formal process of convergence among them. South Africa joined the grouping in 2010, making it BRICS. The leaders of the BRICS countries held their first summit in 2009, providing political impetus to the grouping. BRICS represents the first major political formation of emerging economies from the developing world, challenging the global dominance of the Western industrial powers. Its establishment has important political and economic implications for global governance and economic architecture.
Political Factors Behind the Formation of BRICS
Several key political factors can be identified behind the coming together of Brazil, Russia, India, China, and South Africa into BRICS:
Greater Multipolarity in Post-Cold War World Order
The unipolar structure of global power, with the dominance of the United States as the sole superpower, was increasingly being challenged by the growing economic clout of major emerging powers. BRICS represented the platform for these rising powers from the developing world to shape global governance based on principles of justice, equity, and greater sensitivity to developing country interests.
Need for Democratisation of Global Governance
The post-World War 2 global political and economic governance structures like United Nations Security Council, World Bank, International Monetary Fund etc. were dominated by the western industrial powers. BRICS provided the opportunity for putting forth the voice of Global South in the management of global affairs.
Political Convergence on Key Issues
BRICS countries shared similar positions and concerns on key global issues like IMF reform, climate change, trade protectionism, North-South cooperation etc. BRICS provided a platform to generate greater bargaining power on global governance matters of collective concern.
Changing Global Balance of Power
The global balance of economic power was shifting from the West towards Asia with the rise of countries like China and India. BRICS reflected the new reality of emerging powers shaping global agenda.
Quest for a Multipolar World
BRICS reflected the vision of its member states for a just, equitable and rules-based multipolar global order. The dominant western powers backed by US hegemony were seen as impediment to a fairer world order by BRICS countries.
Economic Drivers behind the Formation of BRICS
The formation of BRICS represents a significant geopolitical and economic development in the 21st century. The economic drivers behind the formation of BRICS are rooted in the desire of these emerging economies to assert themselves on the global stage and reshape the existing international economic order. Here’s an introduction to the economic drivers behind the formation of BRICS:
Rapid Economic Growth
BRICS comprised of fast growing emerging economies delivering rising prosperity for their citizens. During the 2000s, they contributed to over 50% of world GDP growth. The political bonding was accompanied by the economic logic of clubbing together growth leaders.
BRICS countries offered large and expanding markets for trade, investment and economic partnership. The huge consumer markets reinforced the economic attractiveness behind greater BRICS convergence.
Common Development Challenges
As developing and emerging economies there was similarity in the development trajectories of BRICS countries facilitating experience sharing and lessons learning. Issues like poverty alleviation, urbanisation, agricultural growth were areas for BRICS cooperation.
Reducing Dependency on Developed World
BRICS provided the opportunity to shift economic partnerships away from over-dependence on western markets and capital toward more South-South cooperation. Intra-BRICS trade was projected to rise significantly.
BRICS facilitated exchange of technology, knowledge and skills between member states to accelerate sustainable development. Joint R&D projects could harness complementary economic strengths.
Cooperation in the energy sector was a key priority including oil and gas pipelines and joint exploration projects. It reduced excessive exposure to volatile global energy markets.
The formation of BRICS is driven by the collective aspiration of its member nations to assert themselves in the global economic landscape, diversify their partnerships, and contribute to the reconfiguration of the existing international economic order. BRICS serves as a platform for mutual cooperation, addressing shared challenges, and collectively pursuing economic development strategies. The economic interests of its member nations are deeply rooted in the group’s objectives.
Objectives behind the Formation of BRICS
The formation of BRICS was driven by a set of common objectives that sought to address shared concerns and challenges these emerging economies face. The group’s formation, in 2006, reflects a strategic response to the shifting global economic landscape and a desire to collectively influence global governance. Here’s an introduction to the objectives behind the formation of BRICS:
- Provide political platform to highlight interests of emerging economies in global governance
- Push for greater voice and participation of developing countries in institutions like UN Security Council, IMF etc.
- Promote multipolarity as opposed to western hegemony in world order based on respect for international law and national sovereignty
- Shape global political agenda on issues like climate change, trade protectionism, terrorism etc.
- Leverage mutual cooperation for accelerated economic growth and shared prosperity
- Mobilize investment funds for priority development projects in member states including in infrastructure and connectivity
- Reduce exposure to volatile global markets through mechanisms like Contingent Reserve Arrangement
- Forge common positions and negotiation strategies on issues of collective economic concern in multilateral trade and financial forums
- Promote Local currency usage for intra-BRICS trade and investment flows rather than dollar dependency
- Usher in new models of technology partnerships tailored to the specific needs of developing countries
- Foster cooperation on sustainable development goals in social sectors like health, education, urbanisation etc.
The objectives behind the formation of BRICS underscore a collective aspiration to reshape global governance, economics, and geopolitics in a manner that reflects the emerging influence of these nations. While each member brings its unique strengths and challenges, the collaborative efforts of BRICS aim to position these countries as influential players in the evolving global order.
Impact of BRICS on Global Governance
The impact of BRICS on global governance has been significant in recent decades.
- Challenged global political status quo dominated by western powers
- Provided voice to developing countries in management of global affairs
- Pushed for greater representation of emerging economies in institutions like IMF, World Bank
- Promoted multipolarity and prevented unilateralism in areas like security policy
- Reshaped agenda and discourse on issues like climate change, trade protectionism etc.
- Led to creation of parallel structures like New Development Bank and Contingent Reserve Arrangement
- Diluted the dominance of Bretton Woods institutions
- Focused attention on development challenges of Global South
However, it is crucial to recognize that despite their impact, the BRICS face internal challenges and divergent opinions on various issues. Their collective influence hinges on their ability to overcome these differences and work together cohesively. The future of the BRICS in global governance remains a subject of close scrutiny, as their ability to navigate complexities will determine the sustainability and effectiveness of their collective impact.
Impact of BRICS on Economic Cooperation
Some of the key economic impacts of BRICS are:
- Expanded markets and investment opportunities between member states
- Intra-BRICS trade doubled within a decade since its formation
- Bricks countries became major trade and investment partners for each other
- Promoted use of local currencies for bilateral transactions reducing dollar dependence
- Initiated new financial structures like Development Bank and Reserve Arrangement Fund
- Cooperation on sustainable development goals in areas like food security, clean energy etc.
- Significantly increased its share in global GDP, trade and investment flows
- Emergence of BRICS led to greater bargaining power with northern economic powers
- Led to exchange of technology and skills in key sectors between member states
- Greater academic, business and cultural ties between BRICS countries
- Set in motion new economic partnership models tailored to emerging economy needs
- Criticism of BRICS
Some of the key criticisms levelled against BRICS are:
- BRICS is too diverse to emerge as a cohesive grouping. There are major political and economic differences between member states.
- It lacks coherence and policy coordination between member states to leverage its bargaining power.
- Beyond grand declarations at summits, there is little to show in terms of concrete benefits to member states.
- Intra-BRICS trade and investment remains way below potential. Regional and global trade agreements are more preferable.
- Western powers like US still dominate global institutions like World Bank and IMF limiting ability to shape reforms.
- Development Bank and Reserve Arrangement Fund lack sufficient capital and assets to rival Bretton Woods institutions.
- BRICS failed to develop viable alternatives to dollar dominated trade and financial architecture.
- Political differences and border tensions between members like India-China impede closer cooperation.
- BRICS coal-driven energy plans undermine global action on climate change.
- Slowing growth in major BRICS economies in recent years has eroded its economic influence.
BRICS is a significant collaboration between major emerging economies that aims to break away from the dominance of western industrial powers. This alliance signifies the shift in global political and economic power from the developed world towards developing countries. BRICS is driven by both political and economic factors, as it provides an opportunity for mutual cooperation. Although BRICS has not fully reached its potential for closer cooperation, it has led to the creation of parallel structures and mechanisms that offer an alternative to western dominance. Moving forward, BRICS has the potential to become an influential force that can usher in a truly multipolar global order, provided it focuses on stronger policy coordination, resolution of political differences, and tapping into its complementaries for more action-oriented implementation.
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