BRICS: a new future in the offing

After World War II, several bilateral and multilateral agencies (IMF, WB, ADB, WTO, WHO, Paris Club, etc.) were created to rebuild the aftermath of war destruction, mostly in Europe.

In the process, the US, and its Western allies (former colonial powers) overlooked the developing economies and the sub-Sahara nations and as a result their needs for building and uplifting their economies were forgotten. With time their economic gap continued to increase and as a result many countries got trapped in warlords’ fights, extremism, famine, absolute poverty, and health care crisis.

At the turn of the century, some of the developing countries outpaced and took away the lead from the developed economies that were the engines of global economic growth.

And this is the backdrop of the BRICS creation by the emerging economies. Initially, it was just an idea shared by four rising economies of distant continents led by China. In 2001, the term BRIC was coined by Jim O’Neal, the renowned economist from Goldman Sachs who predicted that the economic weight of Brazil, Russia, India, and China could eclipse the world’s biggest economies in the next decade.

The initial four founding members (Brazil, Russia, India & China) of the BRIC group had their first summit in 2009. In 2010, South Africa joined the group, and the new acronym, BRICS, was created by adding letter “S” to its end. Since then, the summit is held every year and is rotated among its member countries. The very first summit was held in Russia (in 2009), followed by Brazil in 2010.

Then China hosted the summit in 2011, followed by India in 2012. The 5th summit in 2013 was held in South Africa, thus completing its first roster. This has set the order for scheduling the future annual summits.

BRICS’ 14thannual summit in 2022 was held in China from June 23-24 and was chaired by President Xi. This was the third time that China had hosted BRICS’ Summit, after 2011 and 2017. Like the previous two summits (12th& 13th), the 14th summit was also held virtually; this time due to continued concerns for the COVID spread and to follow the WHO and the national & local health advisories.

The theme of the summit was “Foster High-quality BRICS Partnership, Usher in a New Era for Global Development.” At the end of the summit, a joint unanimous declaration was released highlighting solidarity, cooperation, support, inclusivity, diversity, mutual respect, multilateralism, food & energy security, economic recovery, eradicating poverty & hunger, climate change, and making BRICS center for sustainable global development.

The 15th annual summit (in 2023) will be held in Johannesburg, South Africa, from August 22-24. The 16th annual summit in 2024 is scheduled to take place in Russia.

Since BRICS creation, many more countries have expressed their desire to join the group. In 2015, Argentina expressed its interest in joining the group, followed by Turkey in 2018. Recently, Iran and Argentina have also applied for the group’s membership.

Due to ever-increasing interests by other sovereign nations, BRICS founding members are ready to open BRICS’ doors to enlarge its membership and it will be called BRICS+, just like OPEC+.

According to BRICS, more than 40 nations of the emerging markets, developing nations, and the sub-Saharan region (global south) are ready to join the group, notably Saudi Arabia, the UAE, Egypt, Indonesia, Thailand, Nigeria, Senegal, Kazakhstan, Uzbekistan, etc.

This means that now the developing economies and low-income countries will have a multilateral platform for the first time in the history of nations that matches closely with their values and interests.

According to French and other EU media, France also wants to join the group. As quoted by the French FM Cathrine Colona, President Emmanuel is waiting for an invitation to become the first-ever Western leader to attend the BRICS summit.

To support the economies and public and private projects, BRICS has created its own financial institution called the New Development Bank (NDB) which is sometimes called BRICS’ bank. Just like the World Bank (WB), it is a multilateral financial institution with $100 billion authorized capital, which is divided into one million shares with a par value of $100,000 each and is headquartered in Shanghai, China.

The initial subscribed capital was equally distributed among its five founding members: Brazil, Russia, India, China, and South Africa. The NDB’s main purpose is to mobilize resources for infrastructure and sustainable development projects in emerging markets and developing countries. Since its formation on July 15, 2014, it has already funded $32.8 billion for 96 projects among its member countries.

In 2021, the NDB admitted the United Arab Emirates (UAE), Uruguay and Bangladesh as its first batch of new members as part of its drive to expand its membership of like-minded sovereign nations of developing economies.

Just recently, Algeria has applied to join the BRICS and to become an active shareholder of the NDB by donating initially $1.5billion to support group’s funding programs. According to Algerian President Abdelmajid Tebboune, BRICS will open new opportunities for Algeria, particularly will help to diversify its economy that is heavily dependent on oil and gas.

BRICS represents about $56.65 trillion (PPP) world’s GDP, 40% of the global population and 26% of the global economy.

In the late 20th century (1973), the G7 (Group of Seven) was formed initially as a gathering of finance ministers of its member states (Canada, France, Germany, Italy, Japan, UK, USA).

However, since then it has transformed into an inter-governmental political forum. By extending its membership to Russia in 1997, it was called G8 but after Russian annexation of Crimea (Ukraine) in 2014, Russia was expelled from the group and was reverted to its original G7. According to the IMF and other agencies’ 2020 data, G7 accounts for about 45% of global GDP and represents about 770 million (~10%) of the world’s population.

The G7, G20 and other groups and institutions should not think of BRICS creation just to compete against them or to undermine their presence. But as stated in its charter, its main purpose was to create a new source of funding for public and private projects for developing and low-income economies that were left behind by advanced economies and their donor agencies.

Global challenges cannot be solved just by the West alone or a small group of nations or for that matter by any single bilateral/multilateral agency or organization! It is the moral duty of all nations of the planet, particularly all the member nations of the Unites Nations (UN), to collectively handle global issues like absolute poverty, famine, droughts, climate change, healthcare, vaccination, endemics, pandemics, etc.

To date, BRICS has proven to be a new source of funding by its five founding members for sustainable developments for reducing absolute poverty, assisting in controlling global warming, building infrastructure for vaccines’ development distribution storage & training of health personnel for future pandemics; but most importantly, assisting low income and sub-Saharan nations for developing their own means for improving their economies to fight hunger, droughts, water supply, illiteracy, housing, sanitation, food supply, climate change, and healthcare. If these nations continue to be neglected, they will become future breeding grounds of endemic & pandemic outbreaks more frequently.

If this happens it could lead to endangerment of technological advancements, climate change mitigation research, new medicines discovery & patients treatment using digital transformation, and eliminating hunger, poverty, droughts, etc. as we have witnessed during recent Ebola and Covid outbreaks.

Thus, this is the duty of advanced economies to teach less fortunate nations “how to fish” so they can break their vicious cycles of hunger, starvation, and absolute poverty for good!

Copyright Business Recorder, 2023