According to industry experts, predictions about the BRICS countries as the fastest-growing economies have not happened. Instead, the alliance now offers a diplomatic forum and development financing outside the Western mainstream. The acronym began as an optimistic term to describe countries with fast-growing economies at the time. But now the BRICS nations, Brazil, Russia, India, China, and South Africa, are setting themselves up as an alternative to existing international financial and political forums. "The founding myth of the emerging economies has faded," confirmed Günther Maihold, deputy director of the German Institute for International and Security Affairs, or SWP. "The BRICS countries are experiencing their geopolitical moment."
Brazil, Russia, India, China, and South Africa are trying to position themselves as representatives of the Global South, providing "an alternative model to the G7." The G7 is an "informal forum" of heads of state of the world's most advanced economies, founded in 1975. Germany, France, the United Kingdom, Italy, Japan, Canada, and the US are members, as is the EU.
The acronym BRIC, initially for Brazil, Russia, India, and China, was coined by Jim O'Neill in 2001 when he was chief economist of the multinational investment bank Goldman Sachs. At the time, the four countries had sustained rates of high economic growth, and the BRIC label stood for economic optimism about the future of those nations. Opponents of the label said the countries were too diverse to be grouped together like this and that it was just a Goldman Sachs marketing ploy. What may have started as a marketing ploy to encourage investors has become a platform for intergovernmental cooperation similar to the G7. 2009 the four nations met for their first summit in Russia's Yekaterinburg. In 2010, South Africa was invited to join the group, adding the "S" to BRICS.
2014 with USD$ 50 billion in seed money, the BRICS nations launched the New Development Bank as an alternative to the World Bank and the International Monetary Fund. In addition, they created a liquidity mechanism called the Contingent Reserve Arrangement to support members struggling with payments. These offers were attractive to the BRICS nations and many other developing and emerging economies that had painful experiences with the IMF's structural adjustment programs and austerity measures. This is why many countries said they might be interested in joining the BRICS group.
The BRICS bank is open to new members. In 2021, Egypt, the United Arab Emirates, Uruguay, and Bangladesh took up shares. However, these were much lower than the bank's founding members' respective $10 billion investments.
South African Foreign Minister Naledi Pandor has said worldwide interest in the BRICS group was "huge." In early Mar 2023, she told television interviewers that she had 12 letters from interested countries on her desk: Saudi Arabia, United Arab Emirates, Egypt, Algeria, Argentina, Mexico, and Nigeria. “Once we've shaped the criteria [for lending], we will then make the decision," she said, noting that the topic would be placed on the agenda for the upcoming August 2023 summit in South Africa.
The most recent economic developments in BRICS member states have little to do with the initial myths upon which the group was founded. Of the five members, only China has achieved sustained and extensive growth since then. As China's gross domestic product grew from $6 trillion in 2010 to nearly $18 trillion in 2021, the economies in Brazil, South Africa, and Russia stagnated. India's GDP grew from $1.7 trillion to $3.1 trillion but was outpaced by China's growth.
Since the start of the Russian war in Ukraine, the BRICS countries have distanced themselves further from the so-called West. The countries of India, Brazil, South Africa, and China a not taking part in sanctions against Russia. This has become increasingly clear with near-historic levels of trade between India and Russia or Brazil's dependence on Russian fertilizer. "Diplomatically, the war in Ukraine appears to have drawn a stark dividing line between an eastern-backed Russia and the West," political scientist Matthew Bishop from the University of Sheffield wrote for the Economics Observatory late last year. "Consequently, some European and US policymakers worry that the BRICS may become less an economic club of rising powers seeking to influence global growth and development and more a political one defined by their authoritarian nationalism."
Maihold of the German Institute for International and Security Affairs agrees. He said the BRICS alliance is not a counter to the West but a forum for increased sovereign and autonomous thought. In a bipolar world, he believes South Africa, India, and Brazil are simply "vying for better terms." Conversely, China is using the platform for its global political ambitions, Maihold added, pointing to Beijing's offers to mediate the war in Ukraine and the joint military exercises it held with Russia in South Africa. Maihold believes the West has noticed this change in tack and is trying to counteract it. "They are looking very closely," he said. "At the G7 summit in Germany in 2022, they made a point of inviting South Africa and India, to prevent the optics that the G7 was standing against BRICS."
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