TradeGlobal issues
What is BRICS and why does it matter?
Nik Martin07/03/2025July 3, 2025
https://p.dw.com/p/4wfMMBrazil has the rotating chair of the BRICS grouping in 2025Image: Arzu Pashayeva/TASS/dpa/picture alliance
Leaders of the world’s fast-growing BRICS economies gather in Rio de Janeiro, Brazil, this weekend, promising to strengthen trade and technology exchange within the bloc in the shadow of US President Donald Trump’s tariff threat.
Brazilian President Luiz Inacio Lula da Silva will host the three-day talks, attended by Indian Prime Minister Narendra Modi and Chinese Premier Li Qiang among others.
The Kremlin has said that Russian President Vladimir Putin, who has an outstanding arrest warrant from the International Criminal Court (ICC) for alleged war crimes over the war in Ukraine, will not be appearing.
DW recaps the history of BRICS and the nascent bloc’s plans to take on the West.
Sino-Russian ties have strengthened since the formation of BRICSImage: Sefa Karacan/Anadolu/picture alliance
How did BRICS get started?
Goldman Sachs economist Jim O’Neill coined the term BRIC in 2001 to identify Brazil, Russia, India, and China as fast-growing economies with the potential to become global economic powers by 2050.
The term highlighted their rising gross domestic product (GDP), large populations, and increasing global influence.
Despite diverse political ideologies and social structures, policymakers in Brazil, Russia, India and China then took up the baton, initially holding informal talks between foreign ministers to lay the groundwork for collaboration.
The first BRICS leaders’ summit was held in Russia’s Yekaterinburg in 2009. A year later, South Africa was invited to join the emerging bloc, and an ‘S’ was added to the BRIC acronym.
The creation of BRICS has since been described as a significant challenge to the US-led global political, economic and financial systems that have dominated since World War II.
The original members have advocated for a multipolar world order and a greater voice for fast-developing countries of the Global South in world affairs.
BRICS has since created an alternative to the World Bank, which funds infrastructure and development projects, as well as a new mechanism to provide financial support during economic crises, partially rivaling the role of the International Monetary Fund (IMF).
BRICS policymakers have also mooted the possibility of launching their own currency to challenge the US dollar, the world’s reserve currency, but progress has been slow.
The bloc has been keen to sign up other developing nations, especially those seeking greater alignment with other fast-growing economies.
How has BRICS evolved to the present day?
BRICS now comprises 10 countries — the original five, along with Egypt, Ethiopia, Iran, the United Arab Emirates and Indonesia, which joined earlier this year.
Although it remains an informal bloc, the Brazilian Center for International Relations (CEBRI) last week labeled BRICS “the first-ever transregional association of non-Western States,” in a preview report for this weekend’s Brazil summit.
Despite having no founding treaty, supporting secretariat or headquarters, BRICS has, on paper, grown into a significant geopolitical and economic power.
The bloc represents more than 40% of the world’s population and more than a third of global economic growth, based on purchasing power parity, exceeding that of the G7 group of developed nations.
Thanks to new members like Iran and the UAE, BRICS countries also control significant commodity markets, including around 40% of global oil production. The bloc also controls nearly three-quarters of rare earth materials, according to the BRICS website.
Mutual trade among members has already surpassed applied for 44 million patents between 2009 and 2023, more than half of all patents registered globally.
Through its New Development Bank (NDB), BRICS has approved over billion for 120 projects, focusing on infrastructure, clean energy and sustainable development.
The BRICS chair position rotates every year among the different members, where the bloc’s leaders have pushed for reform of global institutions like the United Nations Security Council, IMF and World Bank.
BRICS nations also continue to diversify from US dollar-denominated trade, a process known as dedollarization. Intra-BRICS trade is increasingly done in local currencies and alternative payment systems to the Western-backed Society for Worldwide Interbank Financial Telecommunication (SWIFT).
However, plans for a BRICS currency have hit a stumbling block due to resistance from some members, particularly India, to China’s economic dominance.
The plans were further stymied when Trump warned BRICS that the bloc would face 100% tariffs on imports to the US if a common currency were announced.
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Who else wants to join BRICS?
According to the bloc’s website, BRICS is set for explosive growth, with 44 nations either formally applying for membership or making exploratory moves toward joining.
This year alone, Belarus, Bolivia, Cuba, Kazakhstan, Malaysia, Thailand, Vietnam, Uganda and Uzbekistan became partner countries, a prelude to formal membership, under the moniker BRICS+.
Other nations expressing interest in joining include: Azerbaijan, Bahrain, Bangladesh, Burkina Faso, Cambodia, Chad, Colombia, the Republic of the Congo, Equatorial Guinea, Honduras, Laos, Kuwait, Morocco, Myanmar, Nicaragua, Pakistan, the Palestinian territories, Senegal, South Sudan, Sri Lanka, Syria, Venezuela and Zimbabwe.
Saudi Arabia, which has strong ties with the United States, was slated to join BRICS last year but has not yet made a final decision. The BRICS website, however, still has the Kingdom listed as a member.
Turkey’s plan to join was vetoed by India, citing Ankara’s close ties with foe Pakistan.
Argentina had applied to join, but its application was withdrawn under President Javier Milei in December 2023, citing a preference to maintain close ties with the West.
Turkey is keen to join BRICS to reduce reliance on Western marketsImage: Kirill Zykov/brics-russia2024.ru/AP/dpa/picture alliance
How is BRICS expected to evolve?
BRICS is poised for massive expansion. Some analysts predict it could further challenge Western-led global institutions, while others argue that internal divisions and competing national interests may impede its progress.
China and Russia actively position BRICS as a counterweight to Western hegemony, while India and Brazil prioritize economic cooperation over geopolitical confrontation, potentially creating tensions within the bloc.
As well as China and India’s border dispute, rivalries between Saudi Arabia — if it joins — and Iran, or Egypt and Ethiopia over the Nile River dam, could hinder consensus on political issues and dilute the bloc’s ability to advance its interests.
The US currency’s entrenched role in global trade and Beijing’s curbs on the Chinese yuan’s use in international trade could hamper the push for dedollarization, which some see more as an attempt by China and Russia to circumvent Western sanctions than a realistic strategy for a new reserve currency.
The US and European Union imposed punitive measures on Russia following its full-scale invasion of Ukraine in 2022, and Iran’s economy is similarly hurt by sanctions over Tehran’s nuclear program.
Analysts say other countries are supportive of plans for an alternative financial system to hedge their bets in case they face similar sanctions in the future.
Economic disparities among members pose another challenge for BRICS as the bloc grows. China’s GDP far exceeds that of South Africa or newer members like Ethiopia, risking skewing priorities toward Beijing’s interests.
There are also growing concerns about how democracies like India and Brazil can align with autocracies like China, Iran and Russia.
O’Neill, who coined the term BRIC, now thinks the grouping is a failed project, writing in November that BRICS “serves no real purpose beyond generating symbolic gestures and lofty rhetoric.”
Edited by: Uwe Hesser
Nik Martin is one of DW’s team of business reporters based in Bonn.Send us your feedback
Sursa: DW
