BRICS countries redefine themselves in opposition to the G7

“The founding myth of emerging economies has vanished, the BRICS countries are currently living their geopolitical moment”, tells DW Günther Maihold, deputy director of the German Institute for International and Security Affairs (SWP). They are trying to position themselves as mouthpieces for the global South, “as a counter-model to the G7”.

The abbreviation “BRIC” goes back to the former chief economist of the major bank Goldman Sachs, Jim O’Neill. It includes Brazil, Russia, India, and China, which all showed high rates of economic growth over a longer period of time in the early 2000s. The acronym was intended to give these emerging markets greater visibility for foreign investment.

What began as a measure of marketing financial has ended up configuring a platform for intergovernmental cooperation of the first order. In 2009, the first summit of the four emerging countries took place in Yekaterinburg, Russia. In 2010, South Africa was invited to join the group.

Competition for the World Bank

In 2014, the BRICS countries founded the “New Development Bank” (NDB) with an initial capital of US$50 billion as an alternative to the World Bank and the International Monetary Fund (IMF). In addition, a liquidity mechanism, the Contingent Reserve Agreement (CRA), was created to support affiliates with payment difficulties.

These offers are attractive not only to the BRICS themselves, but also to many other developing and emerging countries that have had painful experiences with IMF austerity and structural adjustment programs. Thus, in times of crisis, they would no longer depend exclusively on the World Bank and the IMF. For all these reasons, many countries have shown interest in joining the BRICS group.

The BRICS NDB bank has already been opened to new members. In 2021, Egypt, the United Arab Emirates, Uruguay and Bangladesh subscribed to shares of the institution, although well below the initial ten billion dollars in deposits of each of the founding members.

in the process of expansion

South African Foreign Minister Naledi Pandor confirmed the “enormous interest around the world” in the BRICS club. “I have on my desk requests from Saudi Arabia, the United Arab Emirates, Egypt, Algeria, Argentina, Mexico and Nigeria”he explained in a television interview.

The BRICS countries are willing to talk about an expansion of the group, but the admission criteria must be agreed in advance. The issue will be on the agenda of the next summit, to be held in South Africa in August.

The economic development of the BRICS has little to do with the origin of the growing emerging countries since, of the five member states, only China shows continuous and expansive growth.

While China tripled its gross domestic product (GDP) from US$6 trillion to nearly US$18 trillion between 2010 and 2021, the economies of Brazil, South Africa and Russia stagnated over the same period. And India managed to almost double its economic output, from 1.7 to 3.1 trillion US dollars.

No sanctions against Russia

With the war in Ukraine, the distance between the BRICS countries and the West has increased because neither India nor Brazil nor South Africa nor China participate in the sanctions against Moscow. This is shown in the historical trade relations between India and Russia, or Brazil’s dependence on Russian fertilizers.

“The BRICS countries consciously pursue their national interests,” writes British political scientist Matthew Bishop of the University of Sheffield in the journal Economics Observer. The expert Maihold also sees it that way. “South Africa, India and Brazil want to move between two worlds,” he explains. “They want to materialize the best options for their national development from a distance.”

Therefore, the alliance is not an anti-Western constellation, but serves to achieve national interests. Maihold: “It is about getting the most out of this titanic struggle, and that is where these countries say that it is no mistake to get involved in the BRICSWell, then you no longer depend only on the World Bank and the International Monetary Fund when you are in a financial crisis”.

China, on the other hand, according to Maihold, uses the platform for its global political ambitions. And so the offers of mediation in the Ukrainian war coincided with the joint military exercises of Russia and China in South Africa.

In the West, the change in strategy has been recognized and is trying to counter it, says Maihold. “It’s being looked at very closely,” he says. “At the G7 summit in Germany in 2022, South Africa and India were explicitly invited to avoid a confrontational prospect of the G7 versus the BRICS in world politics.”