In charts: The math behind Brics expansion
- Six more countries are set to join the BRICS bloc, which was formed in 2009 as a way to counter the West’s hegemony. How should India punch above its weight in this revamped bloc? Mint explores the pulls and pressures.
When economist Jim O'Neill came up with the term ‘BRIC’ (Brazil, Russia, India and China) in 2001, little did he know that the acronym would become the groundwork for an ambitious alliance of the world’s highest-potential large economies. That potential is, in a way, now spreading, even as more nations dare to dream beyond the West’s hegemony. The BRICS bloc was born in 2009 as a response to the changing global economic landscape, aiming to promote cooperation on common challenges. South Africa joined in 2010, and now, six more countries—Argentina, Egypt, Iran, Ethiopia, Saudi Arabia and the United Arab Emirates—are set to join the club. But it has emerged that dozens more wanted to join. Mint explores the pulls and pressures.
New horizons
The process behind the selection of the new members is not known, but over 40 countries had reportedly expressed interest. The revamped group has its task cut out in the post-pandemic era: to bond over strategic interests and push them on the global agenda. Consensus will be a challenge, though. Heavyweights China and India don’t see eye to eye on several issues and will try to wield influence over smaller economies—even as the West, the BRICS’ common foe, counts India as an ally of sorts in its own rivalry with China.
"It’s clear that the entire (selection) process is being pushed by China, as it wants to create a platform with a strict anti-West orientation. India will have to work closely with like-minded partners in BRICS to balance this out. The declining trust between India and China will be the fundamental faultline in this platform," said Harsh V. Pant, professor of international relations, King's India Institute.
Beyond borders
BRICS gets its currency from its fast-rising share in global GDP. Its members’ share in the world economy has risen for most part of its existence, while that of the traditional dominant advanced economies (G7) has dwindled. Adjusted for purchasing power parity (PPP), the bloc contributed more to world GDP than G7 for the first time in 2020. In many ways, Brics, regardless of its impact, signifies the 21st-century growth capitals of the world. No wonder, it’s aspirational.
Trade ties
Trade is a major interest area. With the inclusion of Saudi Arabia and the United Arab Emirates (UAE), the revamped BRICS had around 30% share in India’s total trade in 2022-23. The UAE is India’s third-biggest trading partner. Experts point out that the larger BRICS presents India an opportunity to push its trade ties with mineral-rich Ethiopia, with whom trade is negligible, and double down on trade with Saudi Arabia.
“India could consider bilateral free trade agreements with some of the newly-inducted countries with mineral or other resources," Saon Ray, professor at Indian Council for Research on International Economic Relations. “Going beyond economics, a powerful BRICS can also collectively posture for Global South issues at global forums since they face similar problems," she added.
Financing prowess
But despite its original ambitions, BRICS as a bloc has largely failed to live up to its promises or to strike mutual cooperation. The only noteworthy outcome, say analysts, is the New Development Bank (NDB), or “BRICS bank". The NDB aims to give 30% of its loans in local currencies to protect members from exchange rate risks against the dollar. It’s here that, some suggest, India can use the bank to push for globalizing the rupee. China is already pushing for trade in the yuan with several nations, including some new members.
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