BRICS

Outline
Introduction
Short History
BRICS Expansion
Significance of BRICS
Goals and Objectives of BRICS
Significance to Pakistan
Achievements of BRICS
Challenges to BRICS
Critical Analysis
HISTORY

 The acronym BRIC, which did not initially include South Africa, was coined in 2001 by then Goldman Sachs chief
economist Jim O'Neill in a research paper that underlined the growth potential of Brazil, Russia, India and China.
 Coined in 2001 by the British economist Jim O'Neill for the four emerging markets of Brazil, Russia, India and
China, the acronym Bric became Brics in 2011 after South Africa was invited to join the group
 He predicted that these countries would outpace the economic growth of the G7 and challenge the economic
dominance of the Western economies in the future.

 The bloc was founded as an informal

club in 2009 to provide a platform for
its members to challenge a world
order dominated by the United States
and its Western allies.
 Its creation was initiated by Russia.
 The heads of state and government of
the member nations convene annually
with each nation taking up a one-year
rotating chairmanship of the group.
 Brazil, Russia, India and China are the
founding members.
 China and Russia, as strong
proponents of a multipolar world,
perceive BRICS as an opportunity to
challenge the dominance of the
Western economic system.
  Although its official headquarters is in
Shanghai, BRICS does not have a
formal secretariat or a charter.
 However, the group has not yet
adopted a formal character in the
absence of a charter, secretariat, or
common funds.

South Africa, the smallest member in terms

of economic clout and population, was the
first beneficiary of an expansion of the bloc
in 2010 when the grouping became known
as BRICS.

Together the countries account for more

than 40% of the world population and a
quarter of the global economy.

It poses a challenge to Western-dominated

international institutions such as the
International Monetary Fund (IMF) and the
World Bank with its calls for a new and
reformed international order.

Brics Expansion
On August 24, the 15th BRICS summit in
Johannesburg announced that the
fivemember grouping (Brazil, Russia, India,
China and South Africa) had invited six new
members — Iran, Saudi Arabia and the
United Arab Emirates (UAE) from West Asia;
Egypt and Ethiopia from Africa, and
Argentina from Latin America

Over 40 countries, including Pakistan, Iran,

Saudi Arabia, United Arab Emirates,
Argentina, Algeria, Bolivia, Indonesia, Egypt,
Ethiopia, Cuba, Democratic Republic of
Congo, Comoros, Gabon, and Kazakhstan
have expressed interest in joining the forum,
according to 2023 summit chair South
Africa.
BRICS will have 46% of world population, while its share of the global GDP will go from 31.5% in PPP terms to 37%, far
ahead of the GDP of 30.7% of the G-7

out of global oil production of about 90 million barrels per day (mbd) in 2022, the earlier five BRICS members had
accounted for 20% of global output; this will go to 42% with the addition of 6 members

They view BRICS as an alternative to global bodies viewed as dominated by the traditional Western powers and hope
membership will unlock benefits including development finance, and increased trade and investment

members have agreed to “encouraging the use of local currencies in internal trade and financial transactions” between
BRICS and other trading partners.

Significance of BRICS
First, it represents around 3.5 billion, or 45% of the global population.
Second, BRICS contributes around 28% to the total global GDP, which translates into $28.5
trillion.
BRICS Plus produces 44% of the world’s crude oil.
BRICS is the largest economic bloc, and it has even surpassed the G7, its main competitor.
the group holds a 14% voting quota at the World Bank and a 15% voting share in the IMF.
Lastly, four BRICS members, including China, India, Brazil, and Russia, are the largest food
producers in the world, covering around half of the global food supply.

Objectives of BRICS
The objectives of BRICS can be summarized as follows:

1. Economic cooperation and development

2. Multilateral cooperation
3. Global governance reforms
4. Solidarity among members
5. South-South cooperation
6. A new global economic order
7. Alternative financial systems

Challen Achievements by BRICS

1. Challenging longstanding Hegemony of the west
Members have resorted to alternative financial and commercial transaction mechanisms.
A trend to trade in national currencies has gained traction among the members helping
countries such as Russia to circumvent Western sanctions. For instance, China has established
currency swap lines with several member nations promoting trade in yuan.
2. Collective Voice of the South
For instance, many BRICS countries have acted with unanimity on global challenges including
the Iran nuclear program and conflicts in Afghanistan, Gaza, Libya, and Syria.
3. Financial Assistance to Developing Countries
For instance, the New Development Bank (NDB) and Contingent Reserve Arrangement (CRA)
have a financial reserve of more than 100 billion dollars for funding projects Since 2016, NDB
has disbursed nearly 32 billion dollars to emerging nations to construct new roads, and
bridges, railways, and water supply projects.
BRI is also aligned with BRICS,  the BRI, now is 10 years old, comprising 150 countries
and 32 international organizations, with an investment of $1 trillion in 3,000 projects,
generating 420,000 jobs and lifting 40 million out of poverty.
4. BRICS Currency Replacing the Dollar, Dedollarization
Most members agreed on the need to create a new common digital currency or a BRICS
currency during their 15th Summit in South Africa in 2023.
International transactions in dollar is fall from 70% to 49% in last decade.
5. Reforming global institutions
Many BRICS members deemed the veto power enjoyed by the P5 in the United Nations
Security Council as inherently unjust and a relic of the past that does not align with
contemporary realities.
As Fareed Zakaria mentioned in his book, “Post American World and the Rise of the Rest” the
Global South is speedily catching up with the West leading to tectonic shifts in the
international order.
Therefore, under the auspices of BRICS demands for global institutional reforms are getting
traction.
6. Environmental Sustainability
Special attention to environmental concerns such as clean energy, transportation, and
sanitation.
In this regard, BRICS has announced devoting 40 percent of its projects to tackling climate
change.
7. Regional Connectivity
BRICS countries also agreed to build an undersea cable network to connect members. The
project is likely to cost around 1.5 billion dollars.

Challenges Faced by BRICS

1. Multi-alignments and Conflict of Interests

BRICS members such as India are part of the Western

alliances such as the QUAD and Indo-Pacific Strategy
designed to contain China and Russia, which could potentially
lead to disharmony and distrust within the bloc.

2. Divisions within the Bloc

There is a lack of consensus about common currency as

members are deeply embedded in the SWIFT financial system
which revolves around the US dollar.

For example, India has pushed back against de-dollarization as

it has forged close strategic and economic ties with the West

3. Pushback from the Western Countries

US-led West has always perceived the group as a rival to the G7 group. Therefore, it is more likely to be contained by the
West.

4. Small Footprint of BRICS Financial Institutions

These BRICS institutions have a minuscule footprint in the global financial market compared to the Bretton Woods-
institutions-World Bank and IMF. For instance, the NDB is more than five times smaller than the World Bank.

5. Borders tension between big giants

Though to some extent China and India recently resolved their border disputes but India is still concerned about the
CPEC rout which is sponsored by China going through Pakistan.

Further China and Russia are sharing some disputed border.

Significance of BRICS to Pakistan

Pakistan is currently an observer state of BRICS Plus. It applied for full membership in 2023, however, India blocked
Pakistan’s membership due to its political motives. However, after support from Russia, Pakistan is more likely to grab a
seat in the BRICS Plus soon.

1. Multilateral Engagements and Diversification

the expanded BRICS provides a unique opportunity for Pakistan to diversify its economic relations with emerging
economies in the Global South such as Brazil and South Africa.

2. Economic Opportunities

Pakistan is poised to gain numerous economic and financial dividends by accessing new markets, boosting trade, and
tapping investment opportunities.

3. Financial Support

Access to the New Development Bank (NDB) could provide funding for infrastructure projects and reduce its heavy
reliance on Western financial institutions. Being one of the most indebted countries to the IMF, Pakistan could look for
alternative funding sources for development.

4. Political Influence

Through BRICS, Pakistan has a global platform to voice its demands for global institutional reforms based on democratic
principles. For instance, enlarging the UNSC has been a longstanding demand of Pakistan and BRICS gives a unique
platform.

Obstacles for Pakistan to Join BRICS

1. Opposition from India

2. Internal Economic Turmoil
3. Western Political Pressure

Benefits for Iran

Iran’s entry into BRICS is propitious in that, besides its role in the energy sector, it opens up opportunities for
accelerated regional economic cooperation, besides the revival of the moribund north-south connectivity projects
through the Chabahar port with which India is associated.

MUSHAHID HUSSAIN IN TRIBUNE

 The BRICS Summit in the land of Mandela reflected the late leader’s ethos of pluralism and inclusivity
 China factor’: BRICS was essentially showcasing Chinese diplomacy at its best, because after Beijing brokered the
historic Iran-Saudi Arabia rapprochement in March 2023,
 UAE plus Ethiopia, and Egypt were welcomed into what is now BRICS+, making the largest producers and
consumers of oil sitting around one tab
  Conversely, BRICS+, spearheaded by China, is both geopolitical and geo-economics, with clarity on a vision and
will to play a proactive role in a world where the Global South is the pivot. Hence, dedollarisation forms part of
the BRICS+ agenda.
 the BRI, now is 10 years old, comprising 150 countries and 32 international organizations, with an investment of
$1 trillion in 3,000 projects, generating 420,000 jobs and lifting 40 million out of poverty.
 China’s March to modernization takes its inspiration from its Strategic Culture. Hence, it is no accident that China
is the only global power in history to rise peacefully without any invasion, conquest, colonisation or aggression.

Xi also said the BRICS countries have agreed to launch a study group on artificial intelligence (AI) and further expand
cooperation on AI, including by strengthening information exchange and technical cooperation

Skeptics point to the alleged dysfunctionality of BRICS that, unlike the European Union or NATO, lacks clear accession
criteria and gathers countries that seemingly have little in common except some vaguely defined dissatisfaction with the
U.S.-led “rules-based order.”

Saudi Arabia, on the other hand, does not need to break any diplomatic ceilings — to the contrary, it is being courted by
the U.S. for a deal that would reportedly entail, among other things, U.S. security guarantees for the kingdom in
exchange for Saudi-Israeli normalization. Yet, joining BRICS fits into a broader Saudi strategy of diversifying foreign ties,
and, in particular, building a closer relationship with China

Differences among group members

Numerous Western analysts pointed to the many differences and disagreements within the group and expected it to
have only a limited impact on global affairs.

Financial Development

 It has spawned two major institutions – the New Development Bank (NDB) to provide development assistance
and the Contingent Reserve Arrangement that supports countries facing short-term balance-of-payments
pressures. The NDB has already financed 96 projects valued at $33 billion.
 The Brics today claim to be a balancing force in the transition to a new, and increasingly multilateral, economic
world order - one that could arguably dent the dominance of the US dollar in global trade.
 The Brics New Development Bank (NDB), headquartered in Shanghai, China - which regards itself as an
alternative to the World Bank and the International Monetary Fund (IMF) - thus admitted the UAE in September
2021 and, more recently, Egypt, in March 2023.
 the Brics bloc’s largest Middle Eastern D partner, with trade with the Brics countries increasing from $81bn in
2017 to $128bn in 2022
 the UN Secretary General António Guterres described IMF, WTO, UN and World bank as reflecting “yesterday’s
world”

Pakistan has applied for membership

 FM Jilani said on 8 September 2023 that Pakistan was exploring the possibility of joining the group in view of its
objectives of restructuring the international financial structure and reducing its dependence on dollar, adding
that the foreign ministry had started the process of consultation with relevant stakeholders
 Pakistan has filed an application to join the BRICS group of nations in 2024 and is counting on Russia’s assistance
during the membership process, Pakistan’s newly-appointed Ambassador to Russia Muhammad Khalid Jamali
has told the Russian media on 22 November
  Pakistan would like to be part of this important
organisation and we are in process of contacting member
countries for extending support to Pakistan’s membership
in general and Russian Federation in particular
 Russian Deputy Foreign Minister Sergey Ryabkov said in
October that during the Russian chairmanship, special
attention would be paid to expanding the "circle of BRICS
friends"
 India's might veto Pakistan's entry into BRICS
 BRICS membership would give Pakistan representation at
an important international forum and facilitate trade and
economic relations with its member countries.

Critical Analysis
Brazil and India are keen to take a nonaligned stance between the
West and China.

Despite its allure, the club must grapple with an internal fissure.
Some of its members, chief among them China and Russia, want to
position the grouping against the West and the global order crafted
by the United States.

The addition of Iran, an inveterate adversary of the United States,

only deepens the sense that the group is now lining up on one side of a larger geopolitical battle. Other members,
notably Brazil and India, do not share this ambition. Instead, they want to use BRICS to democratize and encourage the
reform of the existing order, helping guide the world from the fading unipolarity of the post–Cold War era to a more
genuine multipolarity in which countries can steer between U.S.-led and Chinese-led blocs.

This battle between anti-Western states and nonaligned ones will shape the future of BRICS—with important
consequences for the global order itself.

The emergence of BRICS as a political grouping reflects genuine grievances over the inequities of the U.S.-led order and
cannot simply be waved away. But owing to changes in Chinese and Russian grand strategy, the divergences within the
group are also growing, and the recent expansion is likely to weaken its cohesiveness.

China’s economy is larger than those of all the other founding members combined—but that does not mean that other
members cannot resist the transformation of the grouping into a Beijing.