Explainer: What exactly is BRICS?

In a strategic move that is sure to reverberate across geopolitical landscapes, a new chapter has unfolded for the BRICS consortium.

The coveted club of Brazil, Russia, India, China, and South Africa has extended its hand to six new members. Among the chosen few are powerhouses like the UAE, Saudi Arabia, and Egypt, forming an alliance that promises to reshape the global order.

The summit, a three-day confluence of minds, crackled with discourse on broadening the bloc’s horizons. Argentina, Iran, and Ethiopia also received invites, reinforcing the bold trajectory of the BRICS endeavour.

The announcement, reverberating like a drumbeat of change, was made by the South African President Cyril Ramaphosa, marking a dawn of newfound collaboration.

Come Jan. 1, 2024, the expanded ranks shall come into effect.

So, what exactly is BRICS?

Conceived as “BRIC” — a brainchild of Goldman Sachs economist Jim O’Neill in 2001 — the alliance took form with the inclusion of South Africa in 2010, eventually morphing into the BRICS we recognise today.

This coalition, once a mere acronym, now stands as a potent alliance of Brazil, Russia, India, China, and South Africa, driven by a shared vision to redefine the global economic landscape by 2050.

Annually, the helms of these nations convene, each occupying the one-year, revolving chairmanship. Collectively, they encompass over 40% of the global populace and a quarter of the world’s economy.

Beyond mere political manoeuvring, BRICS has evolved as a formidable force in economic cooperation, catalysing multilateral trade and development initiatives.

A titan alliance

The heartbeat of this transformation pulses in 2023, as BRICS eclipses the GDP contribution of the G7 nations. This titan alliance commands nearly one-third of the world’s economic vigour, a feat accentuated by its annual summit, this year hosted in Johannesburg, South Africa, where the leadership assembled.

In Johannesburg, from Aug. 22 to 24, among other hot-button global issues the spotlight trained on reducing the global reliance on the US dollar, a strategic move emblematic of their audacity.

As a crescendo of interest swells, more than 40 nations strive for membership, 22 of which have already tendered applications. The gathering momentum is testament to BRICS’ escalating influence on the global stage, poised to sculpt the contours of financial futures.

Take-aways

• In 2001, the seeds of BRICS were sown under the acronym BRIC, a term minted by Goldman Sachs to represent the quartet of Brazil, Russia, India, and China. South Africa’s inclusion followed in 2010.

• This conceptual alchemy was sparked by the belief that these nations’ economies would fuse into an indomitable force, commanding global growth by 2050.

• Within the BRICS framework, nations provided robust returns for discerning institutional investors.