BRIC initially emerged as a working concept formulated by Jim O’Neill of Goldman Sachs in 2001. BRIC is an acronym that stands for Brazil, Russia, India, and China. South Africa was invited and joined the group in 2010, thus making it BRICS. This describes fast-growing economies that would collectively dominate the global economy by 2050.
BRIC was formally formed and inaugurated in September 2006 at the closing of the United Nations General Assembly (UNGA) 61st session as an independent inter-governmental organisation. With the addition of South Africa, we are talking about a combined area of 39,746,220 square kilometres and an estimated total population of 3.21 billion or 26.7% of the world’s land surface and 41.5 % of the global population. Note here that Brazil, Russia, India are among the world’s ten largest countries by population. Looking at GDP(PPP), China, India and Russia are seen as emerging superpowers. All five members states of BRICS are members of the G20 group of nations. The BRICS countries have a combined nominal GDP of approximately US$28.6 trillion or 32.5% of the global GDP/PPP. They had an estimated combined foreign currency reserve of US$4.46 trillion in 2018.
Let us now turn to the Group of Seven (G7) which is an informal club of largest developed and rich democratic states, today comprising of Canada, France, Germany, United Kingdom and the United States. Russia was granted membership from 1997 to 2014 during its introduction of open market economy and adoption of democratic principles. Russia was suspended indefinitely following its annexation of Crimea. Formed in 1973-1975, the G7 has developed governing mechanism to bear its weight on global matters and call the shots. The group is organised around shared values of pluralism, liberal democracy and representative government and they manifest a shared and common political culture. In 2020, the G7 accounted for over half of global net wealth, i.e., over US$200 trillion and 30-43% of the global GDP and 10% of the world’s population or around 700 million people. This is a well-cemented intergovernmental club working together to further their political, economic and military interests. Leaving out Japan, rest of the group are the North Atlantic Treaty Organisation (NATO) members. The United States has a separate defence pact with Japan. Looking at these figures presented here, it would be evident that G7 and integrated relations between these group effectively determine the prevailing world and international order which is tweaked to satisfy their interests collectively. Hence, as things stand at present, the BRICS group is not able to deny this dominance of the G7.
Given this, then why are we asserting that BRICS will be the most dominant group in 2050? Let us look at the facts as they stand and the issues, conflicts and problems that feed this contentious and fierce struggle between G7 and BRICS. Firstly, the BRICS countries together have a much more and vibrant GDP growth rates when compared to G7 countries; for an example, you may compare India to Germany now, in addition China to EU. In both these cases, the EU and German growth rates are almost stagnant while India and China’s GDP growth rates are rather high. Thus, the BRICS will grow and consolidate based on a greater market share with more consumers. Secondly, while the G7 has only 10% of global population or merely 700 million people BRICS countries has a combined population of 3.21 billion or 41.5% of the world population. Finally, looking at the combined land area of BRICS countries, this is 39,746,220 square kilometres or 26.7% of the world’s land surface area.
The BRICS countries now meet frequently and regularly in different constellation including at the level of heads of states in most vital meetings. Like the G7, it is an intergovernmental organisation based on equal rights for its members. The BRICS group is rightly considered the foremost competitor to the G7 block of advanced economies. They have established and are operating their New Development Bank which lends towards infrastructure and viable and profitable projects in member countries. Further, they have established The Contingent Reserve Arrangement and the BRICS payment system. Members of BRICS have contributed equitably towards funding these entities. Here we can comfortably assert that the institutional developments have progressed well to the needs of BRICS requirements.
Following countries have shown real interest in joining the BRICS: Algeria, Argentina, Bahrain, Egypt, Indonesia, Iran, Saudi Arabia, United Arab Emirates, Afghanistan, Bangladesh, Belarus, Kazakhstan, México, Nicaragua, Nigeria, Pakistan, Senegal, Sudan, Syria, Thailand, Tunisia, Turkey, Uruguay, Venezuela, and finally Zimbabwe. It is envisaged that these countries will be enrolled in BRICS in the coming summit in August 2023. One may pose the question why these countries are suddenly interested in BRICS membership. Let us enquire into the actual reasons.
Since the publication of ‘Decline and Fall of the Roman Empire’ by the English historian Edward Gibbon, it is generally accepted that great powers rise with their empires decline and fall in the course of history. So was the case with the Roman Empire, Persian Empire, the Empire of Alexander the Great, the extensive Arab-Islamic Empire, and more recently the great British Empire of which it was said the sun never set. With the fall of the British Empire, the United States, the new singly dominant economic power, rose to and replaced them as a global superpower. The decline of the American empire begins with their defeat in Vietnam and culminates around 2000. Modern reliable and respected research establishes with clarity that China, India and the European Union will rise on the world stage as formidable big powers to compete with the United States. This phenomenon is clearly in progress and advancing rapidly.
One salient and vital reason why the BRICS as a block is advancing rapidly to overtake and replace the G7 is that the BRICS countries today account for 33% or one third of the global output of goods and services, whereas the United Stated and its allies are less than 30%. There are several other vital statistics that could be cited here to underscore this clear trend. Another important reason as to why this trend is accelerating is that Ukrainian war led by the US and NATO. It is true that the ongoing war is formally between the Russian Federation and Ukraine, and Ukraine is conducting the war with their own troops. However, the war is financed and funded by the US and NATO. Without modern American and NATO equipment, Ukraine would have already been defeated by Russia.
The economic war against the Russian Federation with its extensive sanctions regime is being lost by Europe and not Russia. Here it is relevant and important to highlight that the Russian Federation is the world’s biggest energy and grain exporter. This acute energy and grain crisis has become a substantial economic burden to the US and Europe which in turn has resulted in high inflation and curtailing GDP growth. The American/NATO/EU sanction regime along with demand for complete adherence from the global community of states intended to cripple all trade with Russia and its allies and isolate Russia completely, thus forcing it to withdraw from Ukraine. This simply did not happen, and majority of countries in the world have refused to abide by the sanction regime and continue to trade with Russia. To name a few important economies, this group includes China, India, Turkey, Saudi Arabia, Egypt, and other significant economies of the world. Many countries in this group do not endorse or support the Russian invasion of Ukraine but simply do not see any pragmatic reason to follow the sanction regime. We can expect to see some EU and European countries joining the BRICS PLUS group along with 25 other countries under consideration. This will in turn accelerate the de-dollarisation process and search for an equitable reserve currency.
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