As of January 1, 2024, the BRICS bloc has welcomed new members: Iran, the United Arab Emirates, Ethiopia, and Egypt. Saudi Arabia has received an invitation but is still contemplating its decision. Argentina, under President Javier Milei, rejected the invitation, choosing instead to align with the US and Israel, while Malaysia and Thailand have expressed interest in joining the group.
China plays a pivotal role in the expansion of BRICS, aiming to enhance its global influence by engaging nations traditionally allied with the US. Support for this expansion also comes from Russia and South Africa. Initially cautious, India and Brazil eventually agreed to the enlargement. The new members perceive BRICS as a valuable platform for securing financing and operating independently of US influence.
The expansion of BRICS is poised to alter global energy trade dynamics, particularly through the promotion of dedollarization, which involves trading in non-dollar currencies. Analysts suggest that this enlargement is politically motivated, with the intent to challenge the US-led world order and create a formidable counterbalance to the G7.
Among its key achievements, BRICS has established the New Development Bank (NDB), which has sanctioned nearly $33 billion in loans since 2015. Additionally, the bloc has created a $100 billion currency reserve pool designated for emergency lending among its members.
Trade among the original five BRICS nations has surged by 56%, amounting to $422 billion from 2017 to 2022. While Brazil and Russia's natural resources meet China's demand, geopolitical tensions have strained trade relations between India and China.
The term "BRIC" was first coined by economist Jim O’Neill in 2001 to underscore the economic potential of Brazil, Russia, India, and China. The first BRICS summit took place in 2009, with South Africa joining in 2010, completing the acronym.
Despite China's GDP dominance, India functions as a balancing force within BRICS. The NDB is equally owned by all member states, reflecting a consensus-driven approach to decision-making.
BRICS members have largely maintained neutrality regarding the Russia-Ukraine war, although the NDB has suspended Russian projects due to international sanctions.
Although geopolitical challenges and diverse economic trajectories have diminished BRICS' relevance as an investment theme, India remains a promising growth story. However, issues in China, Brazil, Russia, and South Africa have lessened the bloc's collective appeal in global markets.
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