BRICS: Emerging counterweight in a multipolar world? | DW Analysis

Summary

The BRICS nations—Brazil, Russia, India, China, and South Africa—are set to convene, with discussions on expansion amid a backdrop of global financial system diversification. Despite internal divisions, BRICS has persisted for 15 years, challenging Western dominance in financial institutions. They've established the New Development Bank, offering alternative financing without conditionalities. While political cooperation is limited, BRICS continues to push for reforms and alternatives, with over 40 countries showing interest in joining, reflecting its ongoing relevance in international diplomacy.

Takeaways

• 🌐 BRICS (Brazil, Russia, India, China, and South Africa) is a group aiming to diversify the Western-led global financial system.
• 📈 Despite internal differences, BRICS has gained momentum, especially since Russia's invasion of Ukraine, with calls for expansion.
• 🏦 The group was initially conceived by an economist at Goldman Sachs in 2001, noting the fast growth rates of its member countries.
• 🔄 BRICS was formalized in 2009 during the global financial crisis, with South Africa joining two years later.
• 🏢 Criticism from BRICS focuses on the dominance of the US and Europe in institutions like the World Bank and IMF.
• 🌍 The group highlights the unfairness of global representation, with BRICS countries comprising 41% of the world's population but less of its GDP.
• 💼 BRICS uses a twofold strategy: lobbying for reforms in existing institutions and creating their own, like the New Development Bank.
• 💵 The New Development Bank, established in 2017, provides financing without conditionalities, unlike the IMF or World Bank.
• 💼 BRICS members are interested in creating an alternative financial system using local currencies for trade and investment.
• 🚫 Despite the creation of the New Development Bank, it has stopped financing projects in Russia due to sanctions.
• 🔄 BRICS is not a formal alliance but an informal partnership, allowing members to act in their national interests when necessary.
• 🌟 The group's potential expansion is a topic of debate, with over 40 countries interested but differing views among current members.

Q & A

What does the acronym BRICS stand for?

BRICS stands for Brazil, Russia, India, China, and South Africa.

How has Russia's invasion of Ukraine impacted BRICS?

The invasion has given BRICS a second momentum, with calls for the group to grow and expand.

What is the primary mission of BRICS?

The primary mission of BRICS is to diversify the existing Western-led global financial system.

What challenges does BRICS face internally?

BRICS faces internal challenges such as lack of unity, lack of cohesion, and mutual suspicion among its members.

How did the idea of BRICS originate?

The idea of BRICS originated in 2001 at a US investment bank, Goldman Sachs, where an economist pointed out the fast growth rates in Brazil, Russia, India, and China.

When and why did South Africa join BRICS?

South Africa joined BRICS two years after the first BRIC leaders' gathering in 2009, which took place shortly after the start of the global financial crisis, adding the 'S' to BRICS.

What is the criticism BRICS has towards institutions like the World Bank and the IMF?

BRICS criticizes the dominance of the US and Europe in institutions like the World Bank and the IMF, pointing out the unfairness and lack of equality between developing and developed countries.

How does the New Development Bank differ from institutions like the IMF or the World Bank?

The New Development Bank differs in that it does not impose conditionalities on its financing, unlike the IMF or the World Bank, which have Structural Adjustment Programs.

What strategies does BRICS use to strengthen its voice in the global financial system?

BRICS uses a twofold strategy: lobbying for reforms of the World Bank and the IMF, and putting forward their own institutions like the New Development Bank.

How does BRICS approach the issue of political cooperation among its members?

BRICS operates as an informal partnership where members can discuss shared issues, but each country has veto power and may revert to national interests when there are divergences.

What is the stance of BRICS members on the expansion of the group?

There is a divergence in the stance of BRICS members on expansion, with some countries like China promoting it and others like India discouraging it due to concerns over influence and power dynamics.

How does India view its participation in BRICS in relation to its engagement with G7 countries?

India views its participation in BRICS and its engagement with G7 countries as complementary, seeking partnerships with Western countries for capital, technology, and market access.