BRICS: How 5 Nations are Rewritting the Rules of Global Powers

Introduction

Did you know the BRICS Nation- Brazil, Russia, India, China and South Africa- together represent over 40% of the total world population and nearly a quarter of the global GDP? This powerful bloc is reshaping the global order by challenging Western-led systems in Trade, finance and diplomacy.

In this post we dive into what BRICS really stands for, how it works, and why its rise matters more than ever in the shifting balance of the global governance.

Origin and Purpose: Why BRICS was Born

First coined in the year of 2001, at that time called 'BRIC', consisting of Brazil, Russia, India and China.

In the year of 2010, South Africa joined and thus in that year BRICS was born.

How BRICS Started

The idea began in 2001 when the term "BRIC" (Brazil, Russia, India, China) was first introduced by economist Jim O’Neil of Goldman Sachs. He predicted that these four countries would become some of the world’s largest economies of the 21st century. These nations were growing rapidly, and yet they had little influence in global economic institutions like the International Monetary Funds (IMF) and the World Bank, which were mainly led by the Western Countries.

By 2010, South Africa joined the group joined the group, turning “BRIC” into “BRICS.

Since then, they have met regularly in summits to discuss common goals and challenges.

What was the Purpose?

The core goals of BRICS were simple. But powerful:

1.      Give Emerging Markets a Stronger Voice

At the time, organizations like IMF, World Bank and WTO were mostly dominated by the U.S, Europe and Japan. BRICS was formed to challenge that dominance and give a platform to countries with fast-growing populations and economics.

Imagine trying to solve global poverty or trade inequality, but your country doesn’t get a seat at the big table – BRICS wanted to change that.

 

2.   Coordinate Development and Trade Policies

Each BRICS country had its own strengths – from China’s Manufacturing, to Brazil’s natural resources, to India’s service sector. By working together, they hoped to boost trade among themselves and align policies for mutual benefit.

Example: India and Russia working on defence technology transfers, or Brazil and China cooperating on agriculture trade.

3.      Explore Alternatives to the West led financial Systems 

The West dominated global finance for decades – particularly through the U.S. dollar, the World Bank and WTO regulations. BRICS set out to build their own financial institutions to serve their needs without always relying on Western approval or currency.

What Did they build?

1.  The New Development Bank (NDB):

 Purpose: Fund infrastructure and sustainable development projects across BRICS and other developing countries.

 Authorized Capital: $100Billion

How its different: Every member has equal voting power – unlike the World Bank, where the U.S. dominates decision-making.

2.  Contingent Reserve Arrangement (CRA):

Purpose: Acts like a safety net -if a BRICS nation faces financial crisis or currency collapse, they can borrow from CRA fund.

Size: $100 billion In shared reserves.

Why it Matters:  It reduces dependence on the IMF for emergency funding – often criticized for imposing harsh conditions.

 

What Else Does BRICS do?

Apart from these institutions, BRICS leaders meet annually to discuss:

Digital trade and cyber cooperation

Currency swaps and local currency use

Joint infrastructure planning (like ports, highways, railways)

Health education, and green technology partnerships

 

New Development Bank (NDB)

The New Development Bank, often called the BRICS Bank, was officially launched in 2015, headquartered in shanghai, China. It was created to provide funding for the infrastructure and sustainable development projects in BRICS nations and other developing countries.

Capital and Funding

·       Authorized capital: $100 Billion

·       Each member – Brazil, Russia, India, China, and South Africa – initially contributed equally, ensuring no single country dominates the institutions.

Key Focus Areas

·       Green energy projects like solar, wind and hydro power.

·       Transport Infrastructure, including roads, railways and ports to support trade and economic integration.

·       Water and sanitation systems to improve health and living standards in underserved areas

Governance Structure:

·       Equal voting rights: Unlike the World Bank or IMF – where voting power is based on financial contributions – the NDB give each member an equal say, promoting fairness.

·       Rotating presidency: The leadership rotates among members, preventing long-term domination by any one nation.

Reach Beyond BRICS

In 2021, the NDB began accepting new members like Bangladesh, Egypt and the UAE, expanding its global influence and legitimacy as a development alternative to western- led banks.

• Fund size:

            The CRA has a total pol of $100 billion in foreign exchange reserves.

• Purpose:

             Helps member countries stabilize their economies during financial shocks (like                    currency depreciation or external debt crises).

·       Offers a quicker and less conditional response than traditional institutions like the IMF.

Power Dynamics

Contributions (and thus access limits) are tiered:

·       China and India each contribute 41% of the total.

·       Russia and Brazil contribute 18% each.

·       South Africa contributes 5%

This tiered contribution reflects economic size, but doesn’t directly affect governance on the same way it would at the IMF.

Why these Institutions Matter

Together, The NDB and CRA give BRICS the financial muscle to act independently of the Western – led institutions. They:

·       Strengthen economic cooperation among members

·       Provide development funds without political strings attached

·       Offer emergency financial support during crises

·       Symbolize a shift toward a multipolar global economic system.

These institutions are key steps in BRICS’ larger goal: Challenging the Global dominance of the US dollar, the IMF and the World Bank, while empowering the Global South with tool for reliant growth.

Economic and Strategic Clout: What BRICS is Changing

The BRICS nations – Brazil, Russia, India, China and South Africa – aren’t just regional powerhouse anymore. They’re increasingly shaping global trade, finance, and geopolitics. Here’s how their economic and strategic influence is growing:

 

Trade and Investment: Growing Interdependence

In 2023, intra-BRICS trade exceeded $500 billion, highlighting a massive increase in economic cooperation among the five countries. This growing trade is focused not just on raw materials but also on strategic and future-ready sectors.

Key Cooperation Areas:

• Pharmaceuticals: From vaccine partnerships to drug manufacturing, BRICS nations are collaborating to reduce dependence on Western pharmaceutical giants.

• Digital Infrastructure: Investments in fibre optic network, 5G, fintech and AI are being prioritized to create independent and secure tech ecosystems.

• Rare Earth Minerals: These are essential for electronics, EV batteries, and clean energy. BRICS countries like Brazil, Russia, and South Africa hold

This growing trade partnership isn’t just about economics – it’s about creating an independent supply chain ecosystem.

Geopolitical Impact: Reshaping Global Power

BRICS is also becoming a political force, aiming to shift the current Western-dominated global order.

UN Security Council Reform

·   BRICS nations- especially India and Brazil- demand permanent seats in the United Nations Security Council.

·   They argue that the current structure (based on post- World War II realities) is outdated and doesn’t reflect the new global power balance.

·   BRICS jointly advocates for a more democratic, representative global governance system 

De-Dollarization Movement

·       Several BRICS countries are actively reducing their dependence on the US dollar.

·       There’s a push to settle trade in local currencies or create a common BRICS currency in the future.

·       This move would:

o   Shield their economies from dollar volatility and US sanctions

o   Enhance monetary sovereignty.

o   Weaken the dollar’s grip on global trade.

 

Expansion and the Global South: What’s Next for BRICS?

As of now over 22 countries have formally expressed interest in joining BRICS. Some prominent applicants include:

·       Egypt (a rising North African power and Suez Canal gatekeeper)

·       United Arab Emirates (UAE) (a financial and energy powerhouse of the Gulf)

·       Argentina (a major agricultural exporter and a voice for Latin America)

Other interested nations include Indonesia, Iran, Ethiopia, Nigeria and Saudi Arabia.

Why this expansion matters

The inclusion of these nations could dramatically reshape global power dynamics, especially for the Global South – the group of developing countries historically sidelined by Western-led institutions like the G7, IMF and the World Bank.

Key Implications:

·     A larger BRICS would represent a greater portion of the world’s population, natural              resources and economic potential.

·     It would diversify the alliance, making it more representative of different regions, from         Latin America to Africa to the Middle East.

·      It would strengthen South-South cooperation - where developing countries work together     to, bypassing Western systems.

·     If coordinated effectively, this expanded bloc could shift economic and diplomatic              influence away from the G7, giving the Global South a stronger bargaining position in          international affairs.

Challenges Ahead: Frictions Within the Bloc

Despite this growing ambition, BRICS is not without serious internal challenges. Let’s break them down:

1.      Diverging National agendas

While all BRICS members share a desire for a fairer world order, their individual strategies often clash. A key example:

·   China aggressively promotes its Belt and Road Initiative (BRI) - a global infrastructure and trade project that spans Asia, Africa and Beyond.

·    India, however opposes the BRI, especially because some projects pass through diluted territory in Kashmir. India favours its own regional trade and development partnerships.

This results in mistrust and competition between the two largest economics in BRICS, complicating joint decision-making.

2.      Consensus-Based Governance

BRICS operates on a consensus model, meaning all Five members must agree before major decisions are made.

·   This can make the group slow and indecisive.

·   As more countries join, reaching an agreement will become even harder, risking bureaucratic gridlock.

3.      Economic Disparity

·   China alone makes up for the 70% of the BRICS’ total GDP.

·   This imbalance gives China outsized influence, which could undermine smaller member’s voices.

·    Countries like India, Brazil and South Africa may resist Chinese dominances, further straining unity.

Future Vision: Where BRICS could go next

Despite its challenges, BRICS is far from stagnant. The bloc is actively pursuing innovative, long-term strategies to stay relevant and impactful in a fast-changing world.

1.      A shared BRICS digital currency (CBDC)

·   A central bank digital currency (CDBC) - shared or interoperable among members – would reduce reliance on the US dollar for trade and investment.

·   This would help shield BRICS countries from foreign sanctions, exchange rate volatility, and payment system controls (like SWIFT).

 

2.      A Green Development Bank

·    BRICS could lead in sustainable infrastructure finance by creating a green-focused arm of the New Development Bank.

·   The goal: Fund renewable energy, clean transport and climate-resilient cities in developing nations.

 

3.  Joint R&D in Tech and Innovation

The group plans to collaborate in cutting-edge technologies:

·    Artificial Intelligence (AI): 

     For governance, healthcare and security. With the current increasing use of AI and increased capabilities of AI, BRICS nation will focus on the creation of for automating Healthcare, understanding public sentiment and increasing security. 

·    Biotechnology: 

     To produce vaccines, fertilizers and biofuels locally. To increase locally produce vaccines thus reducing dependencies on the foreign companies and questionable qualities, increasing the effectiveness of the crops grown without harming the nutritional values and causing ecological mishaps, and reducing dependencies of fossil fuel and changing to biofuels for climate preservation.

·    Clean energy: 

     Innovation in hydrogen, solar, and battery storage. To reduce carbon emission, to decrease the dependency on fossil fuels, decreasing the effect of climate changes, and promoting ecological preservation.

 

Such cooperation would bridge the tech gap between BRICS and developed nations while boosting Domestic innovation capacity.

Conclusion

              Why This Matters

·       BRICS is becoming more than an economic bloc – its’s a platform for global reform and a strategic alliance for the developing world.

·       It’s a growing trade financial independence, and political assertiveness are challenging the West’s monopoly over international institutions and currency systems

·       However, internal divisions-especially between China and India- could limit its long – term effectiveness unless balanced leadership emerges.

 

BRICS is at cross roads. Expansion could transform it into the defining institutions of the Global South - a true counterbalance to the G7. But its internal division, economic imbalances and lack of a clear roadmap could just as easily just as easily stall its momentum.

Whether BRICS will emerge as a new global power hub or remain a fragmented forum depends on its ability to reform, include and cooperate.