The Rise of BRICS

What is BRICS?

BRICS -an acronym for Brazil, Russia, India, China, and South Africa- representing some of the world's largest and most important rapidly developing countries.BRICS has evolved into a political and economic coalition that seeks to reshape global governance and challenge the dominance of Western-led institutions.

Why was it created?

One of the biggest reasons can be attributed to the underrepresentation in major global institutions such as the Global Bank and the International monetary system. Both the IMF and Global Bank rely on a voting system based on quotas. The more financial contribution you have the more voting power or influence you have. Emerging or developing countries such as BRICS are at a much bigger disadvantage as they rake in lower quotas therefore less power. Historically and still today Western countries have far more influence due to their larger quotas. Since countries like BRICS have limited influence they lack the ability to make decisions that directly affect their economy. With the IMF being led by western Europe and the world bank being led by the United States means that they promote policies curated by the interests of the West. Overall they aimed to reduce dependency on the U.S and other Western countries, economically and politically.

You may ask, how are major global powers such as Russia and China classified in this bunch? While China has the world's second-largest economy, its per capita income remains relatively low compared to developed nations. A significant portion of its population still lives in rural areas with lower standards of living. China's rapid industrialization and urbanization are ongoing, meaning that it still has characteristics typical of an emerging economy. Russia has vast natural resources, particularly in energy (oil and gas), which contribute significantly to its economy. However, its economy is less diversified, heavily reliant on resource exports thus classifying it as an emerging market.

Influence being employed

These countries are growing faster than any other developing countries  and are projected to keep growing due to their favorably large populations,rapid urbanization, and industrialization. Currently Brics make up 40% of the world population and 25% of global GDP. Also playing a big role in trade,contributing to a major percentage of shares of import/export. Most notably China being the second largest economy in the world.

Since WW2 the U.S dollar has been established as the world's primary reserve currency due to the economic success/stability of the U.S.To this day it has remained in its dominant position as the U.S has not only the largest economy, but the most stable making it most attractive for global trade. Since a key focus of BRICS is to bring down dependency on the U.S this means diversifying and using their own national currency to trade  to reduce the U.S dollar on the global market. BRICS has also established institutions like the New Development Bank  and the Contingent Reserve Arrangement to challenge the World Bank and the IMF. These institutions  provide financial support to member countries and other emerging markets, reducing reliance on the more Western dominated institutions.

Challenges and future prospects

Putting aside their shared differences these countries are very much extremely different in many ways leading to conflicting interests.For example China and Indias ongoing border dispute and Russia's actions causing geopolitical tensions everywhere including within BRIC members. As BRICS continue to fight the U.S dollar and their heavy influence  they fail to realize how much a significant shift away from the dollar can impact not only their nations, but the global market as a whole. With BRICS retaliation and institution creation to battle Western influence the U.S and its allies are likely to respond by imposing major policies and own alliances.Overall If BRICS continues to grow economic and political influence, it could lead to a more multipolar world, where no single country or currency dominates global affairs.

Check out these resources for more:

-What is BRICS, which countries want to join and why? | Reuters

-Brics: What is the group and which countries have joined? (bbc.com)

-India-China dispute: The border row explained in 400 words (bbc.com)

-How the U.S. Dollar Became the World's Reserve Currency (investopedia.com)

-Can BRICS weaken the dominance of the IMF and World Bank? - Modern Diplomacy

-International Monetary Fund (IMF) vs. the World Bank: What's the Difference? (investopedia.com)