BRICS countries have come together to form a powerful economic bloc that aims to increase cooperation in trade, investment, and other areas Image Credit: Gulf News

In late 2001, Goldman Sachs published “Building Better Global Economic BRICs,” wrote by Goldman’s then-chief economist Jim O’Neill. It remains one of the most influential investment bank papers in recent memory.

The four “BRICs” identified in the report — Brazil, Russia, India, and China — were on the verge of a decade of robust growth and high foreign direct investment (FDI) inflows. Brazil and Russia were leveraging their natural resources and riding the tide of rapidly increasing demand for their goods, notably from China.

India was emerging as a major global hub for information technology, and China was deep in a historic geoeconomic transformation that, as the author Evan Osnos has argued, was moving “one hundred times the scale and 10 times the speed of the Industrial Revolution.”

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The four countries embraced the BRIC acronym and held a summit in 2009, shortly after the global financial crisis. The BRICs were quick to point out that the financial crisis emanated from advanced economies, most notably the United States.

Brazil’s Foreign Minister Celso Amorim even showed visitors a giant world map turned upside down. The message was clear: the international order was shifting, and new powers were rising. A year later, South Africa joined, and the BRICS with a capital “S” was born.

Johannesburg summit

High on the agenda at the BRICS Johannesburg summit will be whether to admit new members. At least nine countries from the Middle East and North Africa have expressed interest in joining, including regional powerhouses like Saudi Arabia, Egypt, the United Arab Emirates, and Iran.

Opening the doors to new members would give the BRICS a much-needed jolt. China is facing a major test as its economy slows, its property sector implodes, and youth unemployment rises. Brazil has seen its growth limp along at less than 1 per cent for a decade. South Africa remains mired in mismanagement.

Adding several new stars from the Middle East, including Saudi Arabia and the UAE, would bring both economic dynamism and investment heft to the group. High-growth Asian economies like Bangladesh and Indonesia would also nudge the group’s growth prospects.

In the long term the group should remain focused on business and trade, investment and development, and leave the politics to other forums.

In this regard, a larger BRICS grouping can take a page from another newly minted group of four countries gathered around a clever acronym — I2U2 — which includes India, Israel, the US, and the UAE. The I2U2, founded in 2021, has focused only on joint investment and trade.

BRICS economies have been rapidly growing and gaining prominence, with China and India emerging as major global economic players Image Credit: Gulf News

Trade and investment opportunities

Welcoming new members to the BRICS is a wise choice. While Brazil and India are reportedly on the fence about the idea, a bigger BRICS grouping would bring new trade and investment opportunities and reinvigorate intra-BRICS investment.

When the acronym was coined, the original four countries accounted for about 8 per cent of global GDP. Today, the BRICS clocks in at 26 per cent, and India, China, and Brazil are consequential economies for regional and global trade.

But for the BRICS to remain relevant, the grouping needs new blood. As O’Neill himself noted in a May 2022 commentary for Syndication Bureau, “many economists, businesspeople and journalists have stopped paying much attention to the BRICS nations’ collective actions.”

The best way to change that is to broaden the club’s membership while narrowing its focus to business, trade, and investment. — Syndication Bureau

Afshin Molavi is a senior fellow at the Foreign Policy Institute of the Johns Hopkins School of Advanced International Studies and editor and founder of the Emerging World newsletter.