The world is witnessing seismic shifts across economic, geopolitical, and cultural lines, and the ongoing conflict between Russia and the West is having a profound impact on the global power structure. One key trend that is emerging is the acceleration of multi-polarity, with global power becoming more evenly distributed among several advanced economic nations, rather than being contained within a single hegemonic powerhouse like the United States.

At the heart of this shift is the trend of de-dollarization and creation of new institutions of like-minded nations with shared values to support projects financing of the higher risk labeled economies. China being the emerging superpower with the second largest economy is taking the lead in the creation of new multilateral agencies, just like the ones that were created (World Bank, IMF, UNESCO, WTO, WHO, etc.) after the Second World War by the USA.

Additionally, with the failure of the Western donor agencies (WB, IMF, ADB, Paris Club, etc.) to support the sustainable projects in some of the developing countries, in particular the third world and the sub-Saharan region by labeling them ‘too risky to invest’, created a dire need and impetus for creation of new institutions, with all eyes directing toward China, the emerging superpower and the second largest economy.

Very often, people relate the G7 group with the BRICS. There are more differences than commonalities between the two organizations! One of the main differences between BRICS and the G7 is that BRICS is more diverse and inclusive.

The G7 consists of Western countries that share similar values and interests, while BRICS represents different regions, cultures, and political systems.

The G7 also has a history of imposing its agenda and policies on the rest of the world, often ignoring the voices and needs of the developing countries. BRICS, on the other hand, aims to promote a more democratic and multipolar world order, where all countries have equal rights and opportunities.

Another difference is that BRICS has more resources and potential for funding projects in the developing countries. The BRICS countries have established several mechanisms and institutions to support their cooperation and development agenda, such as the New Development Bank (NDB), the Contingent Reserve Arrangement (CRA), the BRICS Business Council and the BRICS Think Tank Council.

These entities provide financial and technical assistance to the BRICS members and other developing countries, especially in the areas of infrastructure, energy, health, education, and innovation.

Each member country of BRICS contributes to its collective strength and influence in diverse ways. Brazil is a leader in agriculture, biofuels, and environmental protection. Russia is a major energy producer and exporter, as well as a military power.

India is a large and fast-growing market, with a strong IT sector and a vibrant democracy. China is the world’s second-largest economy and a leader in manufacturing, trade, and investment. South Africa is a gateway to Africa, with rich natural resources and a diverse society.

The success and appeal of BRICS have attracted many other countries that want to join or associate with it. For example, Indonesia, Turkey, Mexico, Nigeria, Egypt, and Iran have expressed their interest or aspiration to become members of BRICS in the future.

Moreover, BRICS has established partnerships with other regional groups, such as the African Union (AU), the Association of Southeast Asian Nations (ASEAN), the Gulf Cooperation Council (GCC) and the Community of Latin American and Caribbean States (CELAC).

The decisions made by BRICS are based on consensus and mutual respect. There is no formal or binding mechanism for decision-making in BRICS, but rather a flexible and informal process that allows for dialogue and consultation among the leaders, ministers, officials, and experts of the five countries.

The main forum for decision-making is the annual BRICS summit, where the heads of state or government adopt a joint declaration that outlines their common vision and priorities. The summit is also accompanied by various meetings at various levels and sectors throughout the year.

None of the BRICS countries has a veto power in the decision-making process. Unlike the United Nations Security Council (UNSC), where five permanent members (China, France, Russia, the UK, and the US) can block any resolution with their veto rights, BRICS operates on the principle of equality and non-interference.

Every decision is made by consensus among all five members, which means that each country has an equal say and can voice its concerns or objections. This also means that no country can impose its will or agenda on others.

With this geo-political and economic background, it was the right time for China to assert its leadership on the global stage by spearheading the creation of new multilateral institutions of the like-minded nations that share the same values of inclusivity, equality, sovereignty, prosperity, respect, and economic growth. Thus, in 2001 SCO (Shanghai Cooperation Organization) was created followed by BRICS (Brazil, Russia, India, China, and South Africa) in 2010 (without South Africa in 2001) and in 2013 BRI (Belt & Road Initiative) was launched. While the US economy represents a shrinking share of global output, China-led organizations represent $56.6 trillion (PPP adjusted) world’s GDP and 40% of the global population.

Emerging economies are key players in the future global economic landscape, and the BRICS with its diverse experience, technical expertise, and along with its financial arm, NDB (New Development Bank) are in the right niche to support their growth. The bank’s focus on emerging economies sets it apart from traditional multilateral institutions (WB, IMF, ADB, Paris Club, etc.), making it a crucial complement to the existing financial institutions.

According to the IMF’s projection data, by 2023 year-end, BRICS founding members will contribute $56.6 trillion (PPP adjusted) to the world economy. This represents 36% of $164 trillion current global GDP. During the same period, the G7 contribution to the world economy will be just $52.4 trillion which is ~7% lower than BRICS’ contribution! China and India, the two most populous countries together represent about $37 trillion economy that is about one fourth of the global GDP share! Combined, BRICS represents more than 40% of the world population, and 17% of the global trade. BRICS is not only a political alliance, but also a platform for cooperation and development among the Global South countries.

According to BRICS executive leadership, to-date twenty-two countries have applied for the memberships. It shows that these countries believe in BRICS’ strategy, share its values, and support its working philosophy. Chinese President Xi Jinping called this impetus as a “historic moment” among large emerging economies contesting Western-led order.

During the recent 15th annual summit held on August 22-24 in South Africa, BRICS invited six additional nations to join its roster. In January 2024, with the addition of Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates, BRICS+ share of the global position will increase further. According to some estimates, the BRICS+ will represent 43% of oil production (Russia, Saudi Arabia, Iran, the UAE; major oil & gas producing countries) and 46% of the global population with solid consumer power due to majority of under 30 years age demographics. With the higher birth rates in the Global South, soon the BRICS+ will make more than the 50% of the global population!

Many more countries are interested in joining the BRICS, as it offers several benefits and opportunities for the developing countries. Some of the major benefits of joining BRICS are:

• Access to alternative sources of financing for infrastructure and sustainable development projects, through the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA). These institutions are more flexible and responsive to the needs and priorities of the developing countries than the traditional multilateral lenders, such as the World Bank and the International Monetary Fund.

• Participation in a more balanced and multipolar world order, where the developing countries have a greater voice and influence in global governance. BRICS challenges the dominance of the G7 countries (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States), which represent the interests of the advanced industrialized nations. BRICS advocates a more democratic and inclusive reform of the global institutions, such as the United Nations, the Security Council, the World Trade Organization and the G20.

With the rapid success of the BRICS and new countries’ race to join the group, the USA has started taking notice of it. Recently, the Biden administration announced renewed interest in the developing countries funding projects through the IMF & WB. Jack Sullivan, Biden’s National Security Advisor, pledged to discuss reforming the US-led lenders during the upcoming G20 meeting in India. How far these reforms will go and how resilient the lenders will become to supporting the “too risky countries to invest” in the global south, only time will tell.

Copyright Business Recorder, 2023