Power of BRICS Countries in the Global Economy

BRICS is a collaboration of five countries in the world that economists and political scientists predict more powerful in the future. We know that in the past, western countries had dominance on world economic and political system. Now it has been decreasing and BRICS nations are becoming more powerful than ever. Most of the time, in the future, BRICS countries will have dominance in world economic and political systems.

Who are the BRICS countries?

BRICS includes five countries.

They are Brazil, Russia, India, China, and South Africa. Up to the year 2011, it was called BRIC which is the combination of Brazil, Russia, India, and China. (Harden, 2014). In the year 2011, South Africa also has been invited to join this collaboration. After the joining of South Africa, this collaboration is called BRICS.

At the present, BRICS countries account for 30 percent of the world gross domestic product (GDP), and 17 percent of the world trade. Also, 40 percent of the world population lives in the BRICS countries.

Most important thing is, economists predict that by the year 2032, BRICS countries will become the same as the G7 countries from the largeness. (HAIBIN, 2012). G7 countries mean 7 countries including United States, Canada, United Kingdom, France, Italy, Germany, and Japan. Excluding the Japan, all other countries in the G7 collaboration are western countries.

Power of the BRICS Members

All the member countries in the BRICS are well growing in their economic and political aspects. It is important to identify the internal power of these countries separately.

Brazil

“B” represents Brazil of the BRICS group. Brazil can be identified as the largest nation in the Latin American region. Also, it is the fifth-largest country in the world and it is the seventh-largest economy in the world. For the year 2019, Brazil could achieve a GDP of $1839.76 billion Also, in the political world, Brazil applies democratization when they make relationships with other nations.

Russia

“R” represents Russia of the BRICS group.  Russia could achieve second place in the dry natural gas industry and could achieve third place in the oil industry. For the year 2019, Russia could achieve a GDP of $.1.7 trillion. To see how will be the Russian economy in the future, kindly click here.

India

“I” represents India of the BRICS group.  India also could achieve a GDP of $2875.14 billion which is higher than both Brazil and Russia. Also, the GDP value of India accounts for a greater portion of the GDP of the world and it is 2.39 percent.

China

“C” represents China of the BRICS group. When we consider China, it will play a major role in the world economy at the present and a higher role in the future. China has the world’s largest population and the people who live in the cities increase by 10 percent per year. (Siddiqui, 2016). Also, China has recorded $14.343 trillion GDP with a growth of 6.109 percent when compares with the year 2018. (Worldbank.org, 2010a). Among the BRICS countries, China represents both the highest GDP and GDP growth rate and it is one of the most important countries in not only the BRICS collaboration but also in the world economy. China is the largest exporter and second-largest importer in the world market. According to the forecast of the economists’ per capita income of China will equal to per capita income of the USA in the year 2033. To read more, kindly click here

South Africa

“S” represents South Africa of the BRICS group. In South Africa, there was $430.167 billion of GDP in the year 2019.

According to the above evidence, we can prove that all the countries in the BRICS, especially including China and Russia, have higher internal power as they provide a significant contribution to the world economy. Because of the higher economic power, they are able to extend their political power and political views to other countries in the world.

Internal relationships within the BRICS countries

There is a good internal relationship between the BRICS countries. If one country needs economic, strategic, or other kind of help, other countries help them as far as possible by strengthening the relationship between them. Since China and Russia are more powerful than India, Brazil, and South Africa, China and Russia assist the other three BRICS countries.

When BRICS countries make the trade agreements, they provide tariff and other kinds of policy reliefs than they trade with other nations out of the collaboration.

Also, they sell more goods and services and at a lower price than they transact with the rest of the world. As an example, India and Russia signed an agreement to provide 10 million oil tons to India by Russia in the coming ten years. (www.industryweek.com, 2015). China and India work as major partners in the foreign trading industry. The highest portion of India’s products are exported to China and it was 8 percent of the total export value of India in the year 2014. China also considers India as one of the top 10 trade partners of them. (Siddiqui, 2016). By increasing trade activities within the group, BRICS countries can less depend on the rest of the world and they can buy goods and services and at a lower price.

So, it can be concluded that internal relationship among the BRICS countries not only increase the economic power of the member countries but also increase the political power of them since they need to depend less on the western countries. On the other hand, the internal power of the BRICS group is a threat to the dominance of western countries. Since BRICS countries are less dependent on western countries, western countries’ ability to influence the BRICS countries has been declined.

How do BRICS countries stimulate the economies in the developing world?

We know that all of the member countries of the BRICS corporation are developing nations. Although China and Russia play a major role in the world economy they are also not classified as developed nations yet. So, BRICS countries more focus on the well-being of themselves and as well as the well-being of other developing nations.

Contribution of the BRICS countries in the South-South corporation.

As an example, we can see the contribution of the BRICS countries in the South-South corporation. South-South corporation is a collection of the countries that locate in the Southern part of the world. Their main ambition is to increase the national wellbeing of every partner and especially aiming to achieve sustainable growth in the year 2030. (United Nations, n.d.). Here India, Brazil, and South Africa play a major role who are partners in the South-South corporation. As an example, we can say the India-UN Development Partnership Fund which was established with the major contribution of India provides fund to the developing nations.

So, it is clear now BRICS countries provide special support to the development of the developing world. This also can reduce the dominance of western countries. Because we know that sometimes, western nations unnecessarily intermediate to the economic and political functions of the developing nations. Developing nations also cannot avoid the influence of western nations especially because of the less economic power of them. If developing nations oppose the intermediation of the western nations, western nations will impose economic barriers toward the developing nations. But BRICS countries provide power to member countries and other developing nations to be more sustainable and avoid the bad influences of the western nations. This also reduces the power of western dominance. Now western countries have to limit their unethical intermediation practices.

How do BRICS countries help to global economy?

Also, it is necessary to discuss the failure of the existing world economy and how BRICS satisfy the requirements of the nations. As we discuss earlier BRICS provide great support to the world economy while proving solutions for the failures of the world economy. BRICS consider not only developing nations but also the entire world. As examples, we can consider some situations.

The first one is, we know that in 2008 there was a sharp down in the European and American economy because of the fallen down in the house loan industry. In this era, most of the investors had fewer profits in investing in European and American markets. So, they wanted other markets to invest their money. In this case, the Chinese, Indian, Brazil, and the Russian foreign investment market provided the best secure place for investors to invest their funds. This example shows that BRICS nations could provide successful solutions to the problems in the world economy by satisfying the requirements of the world community. Also, this reduced the economics and political power of G7 countries.

the recession of 2008, China, India, Brazil, and Russia could achieve more bonds of the International Money Fund (IMF). Before the recession in 2008, China, India, Russia, and Brazil had 3.996%, 2.442%, 2.494%, 1.783% percent of bonds respectively. After the recession in 2009, China, India, Russia, and Brazil had 6.394%, 2.751%, 2.706%, and 2.316% percent of bonds respectively which clearly shows an increase of the great portion. (HAIBIN, 2012). In this case, also the economic and political power of the western countries shifted to the BRICS countries. In the future also, BRICS will become more powerful in economics and politics and the dominance of the western countries will be reduced further.

Issues in the BRICS collaboration

According to the above-discussed situations, it is very clear that BRICS will more powerful in the future world and western countries’ power will be decreased. But still, there are some issues in the BRICS collaboration. As examples, we can say China focuses on big power strategy while Brazil focusing on democratic strategy when do engage in political activities. (Laidi, 2011) So, there is a mismatch between these countries and this will lead to an internal conflict in the BRICS nations. Also, both Russia and China want to increase their political power in Asia. This will lead a competition between them and reduce the unity of the BRICS countries. China’s big power strategy threatened the many economies in the world especially powerful nations in the world. Japan also has been badly treated by China’s big power policy. (Meena, 2013).

Also, as usual, all BRICS nations highly dependent on foreign investments and exports. Because of this, other nations can influence BRICS nations under economic aspects. As an example, other nations such as the USA and UK can prohibit investment in BRICS countries to their people. This will lead to a violation of BRICS independent power in economics and politics.

Reference list

Council on Foreign Relations. (2019). The G7 and the Future of Multilateralism. [online] Available at: https://www.cfr.org/backgrounder/g7-and-future-multilateralism#:~:text=The%20Group%20of%20Seven%20(G7.

data.worldbank.org. (n.d.). GDP (constant 2010 US$) – South Africa | Data. [online] Available at: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD?locations=ZA [Accessed 21 Nov. 2020].

Desai, R. (2013). The Brics are building a challenge to western economic supremacy | Radhika Desai. The Guardian. [online] 2 Apr. Available at: https://www.theguardian.com/commentisfree/2013/apr/02/brics-challenge-western-supremacy.

HAIBIN, N. (2012). BRICS in Global Governance. PERSPECTIVE | FES NEW YORK.

Harden, B. (2014). The Diplomatic Ambitions of the BRIC States: Challenging the Hegemony of the West. 2(2), pp.2333–5874.

Laidi, Z. (2011). The BRICS Against the West? CERI STRATEGY PAPERS.

Loman, H. (2014). Democracy, Brazilian style. [online] RaboResearch – Economic Research. Available at: https://economics.rabobank.com/publications/2014/january/democracy-brazilian-style/ [Accessed 23 Nov. 2020].

Meena, K. (2013). BRICS: An Explanation in Critical Geography. 35, pp.565–593.

Siddiqui, K. (2016). Will the Growth of the BRICs Cause a Shift in the Global Balance of Economic Power in the 21st Century? International Journal of Political Economy, [online] 45(4), pp.315–338. Available at: Click here

Tradingeconomics.com. (2019). India GDP. [online] Available at: https://tradingeconomics.com/india/gdp.

Tradingeconomics.com. (2020). [online] Available at: https://tradingeconomics.com/brazil/gdp.

United Nations (n.d.). South-South Cooperation Day. [online] United Nations. Available at: https://www.un.org/en/observances/south-south-cooperation-day [Accessed 22 Nov. 2020].

Worldbank.org. (2010a). GDP (current US$) | Data. [online] Available at: https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=CN.

Worldbank.org. (2010b). GDP (current US$) – Russian Federation | Data. [online] Available at: https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=RU.

www.industryweek.com. (2015). Russia’s BRICS Summit Challenges Western Dominance. [online] Available at: https://www.industryweek.com/the-economy/article/21965520/russias-brics-summit-challenges-western-dominance [Accessed 22 Nov. 2020].