The Cold War divided the world into two major blocs: the capitalist bloc led by the United States and the communist bloc led by the Soviet Union.
After the collapse of the Soviet Union, the international system became largely unipolar, with the United States and Western-led institutions dominating global politics, finance, and trade.
This system promoted Western interests while often sidelining the priorities of developing countries.
In the late 1990s, globalization transformed many developing economies. Countries such as Brazil, Russia, India, and China began to emerge as major economic players seeking greater influence in global decision-making.
The term BRIC was coined by Jim O’Neill in 2001 to describe these fast-growing economies and their potential to reshape the global order.
In 2006, on the sidelines of the United Nations General Assembly, Brazil, Russia, India, and China met informally and laid the foundation for what would later become BRIC.
Evolution and Expansion of BRIC
BRIC began as an informal grouping but became a formal partnership in 2009.
At the first summit in Russia, the leaders of Brazil, Russia, India, and China stressed the need to reform the international financial system.
Their main demand was that developing economies should have a stronger voice and fairer representation in global decision-making.
They also emphasized the importance of avoiding protectionist policies and supporting a more diverse international monetary system.
In 2011, South Africa joined the group, changing the acronym from BRIC to BRICS.
This expansion gave the organization a more inclusive character and strengthened its identity as a platform for emerging regional powers.
The Rise of BRICS+
At the 2023 summit held in Johannesburg, South Africa, BRICS invited several new countries to join the organization.
These included:
- Iran
- Saudi Arabia
- United Arab Emirates
- Ethiopia
- Argentina
Argentina later opted out after President Javier Milei took office. The membership of the remaining countries became effective on 1 January 2024, leading to the expansion of the group into BRICS+.
The process of joining BRICS usually begins when a country either expresses interest or formally applies for membership.
Several countries have shown interest in joining the organization, including:
- Algeria
- Azerbaijan
- Bahrain
- Bangladesh
- Belarus
- Bolivia
- Cuba
- Chad
- Republic of Congo
- Equatorial Guinea
- Eritrea
- Honduras
- Indonesia
- Kazakhstan
- Kuwait
- Laos
- Malaysia
- Myanmar
- Morocco
- Nicaragua
- Nigeria
- Pakistan
- Senegal
- South Sudan
- Sri Lanka
- State of Palestine
- Syria
- Thailand
- Turkey
- Uganda
- Uzbekistan
- Venezuela
- Vietnam
- Zimbabwe
New partner countries may not immediately enjoy the same rights as full members, but the partnership model allows BRICS to expand its influence gradually.
Rising Economic Strength of BRICS
BRICS includes major global powers as well as countries that are highly influential within their regions.
Collectively, BRICS countries represent around 3.5 billion people, which is approximately 45% of the world’s population.
The group also accounts for around 29% of global GDP, worth more than $30 trillion.
Since the early 2000s, BRICS economies have experienced significant growth, increasing their role in global trade, finance, and development.
China’s Economic Rise
From 2000 to 2008, China experienced rapid annual GDP growth, reaching a GDP of around $4.4 trillion by 2008.
By 2010, China had become the second-largest economy in the world.
Its GDP currently stands at approximately $17.96 trillion and is expected to continue expanding in the coming years.
India’s Growth Trajectory
India’s economy has also grown considerably.
Its GDP was around $1.7 trillion in 2010 and currently stands near $3.93 trillion.
It is projected to reach around $6.5 trillion by the end of 2029.
Russia, Brazil and South Africa
Russia’s GDP stood at around $1.6 trillion in 2010 and is now approximately $2.05 trillion.
Brazil’s GDP was around $2.2 trillion and currently stands close to $2.3 trillion, with expectations of further growth by 2029.
South Africa, though smaller in economic size compared to the other BRICS members, remains an important regional power and a key representative of the African continent within the organization.
BRICS and the Challenge to the G7
The economic growth of BRICS has created a serious challenge for the traditional dominance of G7 countries.
China and India have led much of this growth, while Russia and Brazil have benefited from their natural resources.
BRICS countries have also diversified their economic bases.
- Russia and Brazil have used their natural resource wealth.
- China has expanded its manufacturing and technology sectors.
- India has benefited from services, technology, innovation, and a young population.
- South Africa provides access to African markets and regional influence.
This diversification helps BRICS countries reduce vulnerability to global economic shocks and supports long-term growth.
In terms of purchasing power parity, BRICS countries overtook the G7 share of global GDP in 2018.
By 2024, BRICS accounted for around 35% of global GDP in purchasing power parity terms, compared to around 30% held by G7 countries.
This shift shows that global economic power is gradually moving toward a more multipolar structure.
Growing Trade Among BRICS Countries
Trade among BRICS countries has grown rapidly and remains one of the strongest forces bringing the group closer together.
Economic cooperation gives BRICS the ability to challenge Western-led political and economic dominance.
India-China Trade
Despite political tensions and border disputes, India and China continue to maintain strong trade relations.
From 2015 to 2022, bilateral trade between the two countries increased significantly.
China is one of India’s largest trading partners, with bilateral trade standing at around $113 billion in financial year 2023.
Russia-China Trade
Russia and China have also become major trade partners.
Their mutual trade reached approximately $190 billion in 2022, showing strong growth compared to the previous year.
Their growing trade relationship has become especially important as both countries seek to reduce the impact of Western sanctions and financial restrictions.
China’s Trade With BRICS Members
China’s foreign trade with other BRICS member countries reached around 4.62 trillion yuan, equivalent to approximately $648 billion, in the first nine months of 2024.
This reflected continued growth in economic cooperation within the group.
Trade as a Tool Against Western Sanctions
BRICS countries, particularly Russia and China, have used trade and economic cooperation to reduce the impact of Western sanctions.
In 2021, Russia and China signed an agreement to increase the supply of Russian natural gas to China through the Power of Siberia pipeline.
The agreement, valued at around $400 billion over 30 years, was structured in yuan instead of US dollars.
This reflected a broader BRICS strategy of using natural resources, local currencies, and alternative trade routes to strengthen financial independence.
Similarly, after sanctions were imposed on Russia, Brazil increased its meat exports to the Russian market.
Brazil became one of Russia’s major poultry suppliers, helping Russia diversify its import sources.
BRICS leaders have also expressed concern over the impact of sanctions on the global economy and international trade.
At a recent summit, Russia proposed the creation of a BRICS Grain Exchange to facilitate trade in grain and other agricultural commodities.
This initiative was welcomed by member states and could expand cooperation in agriculture and food security.
BRICS+ and the Future of Global Energy Markets
Energy is one of the most important areas where BRICS+ can influence global markets.
Russia and Brazil are major oil-producing countries. Russia is among the world’s largest oil producers and exporters, while Brazil has significant offshore oil reserves.
On the other hand, China and India are among the world’s largest oil consumers and importers.
Their growing populations and expanding industrial sectors make their energy demand highly important for global markets.
With the inclusion of new members, especially from the Middle East, BRICS+ has become even more influential in the global energy sector.
The group already accounts for a significant share of global oil and gas production.
With expansion, BRICS+ could account for around 37% of global liquids production and around 33% of gas production.
This gives the group greater potential to influence energy production, pricing, and market direction.
Challenging the Petrodollar System
China has increasingly challenged the long-standing petrodollar system, under which global oil transactions have traditionally been conducted in US dollars.
China has started conducting oil trade in renminbi with major oil producers such as Saudi Arabia and Russia.
This trend reflects a broader move among BRICS countries to reduce dependence on the US dollar in international trade.
If more energy transactions are conducted in local currencies, the global demand for dollars may gradually decline.
Currency Swaps: Moving Beyond the Dollar
Currency swap agreements allow countries to exchange predetermined amounts of their national currencies.
They also include an agreement to reverse the exchange at a later date at a previously agreed rate.
For BRICS countries, currency swaps serve several important purposes.
- They reduce dependence on the US dollar.
- They make trade in local currencies easier.
- They protect economies from dollar fluctuations.
- They provide access to foreign currency during financial stress.
- They reduce reliance on Western financial mechanisms.
These agreements are usually negotiated and signed by the central banks of member countries.
The process includes setting terms, executing the swap, and later reversing the exchange.
Examples of Currency Swap Agreements
China and Saudi Arabia have entered into a currency swap agreement worth around $7 billion.
This allows trade between the two countries to be conducted in yuan and riyal instead of dollars.
The United Arab Emirates and Egypt have also agreed to a currency swap arrangement worth approximately $1.36 billion.
China and Russia previously signed a three-year currency swap agreement worth 150 billion yuan, equivalent to around $24 billion at the time.
This agreement was renewed in 2017 and again in 2020.
De-dollarization and Financial Independence
The global financial system remains heavily dominated by the US dollar.
The dollar accounts for a very large share of global currency trading and has historically dominated oil transactions.
Currency swaps are part of a broader BRICS strategy to reduce dependence on the dollar.
By allowing countries to trade in their own currencies, these arrangements reduce the need for dollar-based transactions.
This can lower demand for the dollar as a medium of exchange and encourage the use of local currencies in trade and reserves.
For BRICS countries, de-dollarization also provides greater protection from US monetary policy, sanctions, and external financial shocks.
Following Russia’s invasion of Ukraine, ruble-yuan trade increased sharply, showing how geopolitical pressure can accelerate the use of alternative currencies.
At recent BRICS meetings, members supported trade in local currencies to reduce trade barriers and strengthen economic ties.
Financial Innovations and Alternatives to Western Dominance
BRICS has worked to build financial institutions that can serve as alternatives to Western-dominated institutions such as the International Monetary Fund and the World Bank.
Two of the most important initiatives are:
- The New Development Bank
- The Contingent Reserve Arrangement
The New Development Bank
The New Development Bank was established to finance infrastructure and sustainable development projects in developing countries and emerging economies.
It began with an initial capital contribution of $50 billion from BRICS members.
Unlike the World Bank and IMF, where voting power is strongly linked to financial contribution, the New Development Bank was designed with a more equal voting structure.
Each founding member has equal voting rights, regardless of the size of its economy.
This structure aims to reduce Western dominance and create a fairer development-finance model.
The bank also seeks to avoid the lengthy procedures and strict conditions often associated with traditional financial institutions.
It focuses on development financing tailored to the specific needs of borrowing countries.
From 2017 to 2021, the New Development Bank approved more than $29 billion in loans for developing economies.
It also aims to issue billions of dollars in new loans for infrastructure and sustainable development projects.
The Contingent Reserve Arrangement
The Contingent Reserve Arrangement was created as a $100 billion fund to help BRICS countries deal with balance-of-payments problems and liquidity shortages.
China contributed the largest share, while Brazil, Russia, India, and South Africa also made significant contributions.
The arrangement provides emergency financial support during periods of capital pressure or financial instability.
It is viewed as a counterweight to the IMF because it can provide financial support without the same level of strict conditionality.
This gives BRICS members greater financial independence during times of crisis.
Alternatives to SWIFT and Western Payment Systems
BRICS countries are also exploring alternatives to Western-controlled payment systems.
China created the Cross-Border Interbank Payment System, known as CIPS, as an alternative channel for processing cross-border yuan payments.
CIPS allows banks and financial institutions to conduct international transactions in yuan without relying fully on Western payment infrastructure.
By 2021, CIPS had more than 1,200 participating financial institutions from over 100 countries and regions.
By 2024, the number of direct and indirect participants had increased further.
Due to Western sanctions, Russian banks increasingly adopted CIPS to continue transactions with Chinese banks and companies.
Other BRICS members have also shown interest in reducing reliance on Western financial systems.
The wider use of CIPS is part of the BRICS strategy of de-dollarization and financial autonomy.
BRICS Clear and the Future of Cross-Border Settlements
At recent BRICS discussions, leaders highlighted the need for a fairer and more inclusive international financial system.
One proposal is the establishment of BRICS Clear.
This initiative aims to create a separate infrastructure for cross-border settlements and deposits among member states.
The goal is to make transactions faster, easier, safer, and less dependent on Western-dominated systems.
BRICS leaders also welcomed the BRICS Interbank Cooperation Mechanism.
This mechanism encourages trade and financial transactions in local currencies rather than relying on the US dollar.
Such measures would make economic transactions more direct and less vulnerable to external financial pressure.
Conclusion
BRICS has evolved from an informal grouping of emerging economies into an influential platform that challenges the US-led global order.
Its growing economic weight, expanding membership, stronger internal trade, and financial initiatives all point toward a shift in global power.
Through currency swaps, the New Development Bank, the Contingent Reserve Arrangement, alternative payment systems, and de-dollarization efforts, BRICS is trying to build a more inclusive and balanced international financial system.
The expansion of BRICS into BRICS+ also reflects the desire of many developing countries to participate in a multipolar world order.
By strengthening internal trade and building alternatives to Western-dominated institutions, BRICS is gradually reshaping global economic and political dynamics.
The rise of BRICS does not simply represent the growth of a new organization. It represents a broader demand for fairness, representation, and balance in the international system.