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BRICS, a honeypot for emerging countries

 


by Martin Aslan

In 2001, Jim O'Neill1 identified four emerging countries likely to become the world's leading economies by 2050. Brazil, Russia, India and China had adopted a market economy and embarked on reforms (in the field of education, foreign direct investment and business start-ups) to integrate into the global economy. In 2006, the four nations decided to join forces in an economic partnership. Today, the group has grown to include nine member states. Compared to the G7, the BRICS + alliance is a symbol of hope for emerging countries. It is also a magnet for countries in South America, Africa and South-East Asia. However, the weight of China, but also of India, risks weakening the development of other member countries. China, whose GDP is higher than that of the other countries combined, tends to want to show its supremacy and to act unilaterally.


The weight of economic growth and demographic growth

The strength of the BRICS + lies in their rate of economic and demographic growth. Boosted by China and India, the alliance will rival the GDP of the G7 in 2023. The GDP of the BRICS has doubled in 20 years. 


As a result, the BRICS are stepping up their influence on the international economic stage to assert their points of view in negotiations at the G20, the IMF and the WTO. The demographics of the BRICS member countries are an important factor compared to the G7 countries. The nine partner countries represent a population of 3.5 billion, compared with less than one billion for the G7. Once again, the demographic weight is boosted by China and India. Paradoxically, the financial clout of the BRICS has not halved poverty in 20 years. Indeed, its member states are made up of a vast population that lives below the poverty line.


A straightforward, non-political economic alliance

The BRICS alliance aims to rebalance international trade in the face of American monetary hegemony. The BRICS do not require political commitments or agreements. The group focuses solely on economic objectives without interfering in the internal political life of its partners. Another strong point of the BRICS is their rejection of economic sanctions as a means of political pressure. As economic interests take priority, the member countries do not feel concerned by the economic sanctions voted by the UN or the EU. The BRICS alliance can be compared to a kind of shield that enables countries under sanctions to pursue and develop their economic activities. Against a backdrop of war and economic sanctions against Russia, this alliance is an alternative, enabling member countries to keep trading and ignore these sanctions.

China, the centre of gravity of the BRICS.
Among the member states of the BRICS, it is possible to distinguish two categories: producers of finished products and suppliers of raw materials. China and India are among the producer countries because of the size of their population, which is able to produce at low cost what the world will consume. The other countries are suppliers of raw materials and produce at the margin. South Africa was invited by China to join the BRICS for one clear reason: open up African markets and give the BRICS member countries access to the raw materials they need to maintain their growth. Russia, to finance its war against Ukraine, is looking for new markets to sell its oil and coal.  Iran is a nation with significant hydrocarbon resources after several decades of embargo (see article Iran, a sanctioned country). However, China's partners in the BRICS would like Beijing to buy some of their manufactured products and not just import their raw materials.

Candidates to join the alliance

In 2023, about twenty countries were candidates to join the BRICS community: Algeria, Argentina, Bahrain, Bangladesh, Belarus, Bolivia, Cuba, Egypt, Honduras, Indonesia, Iran, Kazakhstan, Kuwait, Nigeria, Palestine, Saudi Arabia, Serbia, Senegal, Thailand, the United Arab Emirates, Venezuela and Vietnam. Only Egypt, the United Arab Emirates, Ethiopia and Iran were selected. Argentina ultimately refused to join and Saudi Arabia has not confirmed its membership. Turkiye, for its part, has yet to express its intention to join this alliance. However, Turkiye, a member of NATO, is still seeking to join the European Union. There are no real membership criteria. It is therefore difficult to speculate on the ability of a country to join the group, but would Turkiye accept China's domination?


Democratic values and international law are not requirements for joining the BRICS. The aim is to trade and make profits without concern for the internal or external affairs of partner countries. This situation suits Russia, which is seeking to secure its commercial outlets for the long term. China's domination of the group is blatant. It is likely to stifle and overexploit the partner countries for its own benefit. Tomorrow, India's economic and demographic growth will outstrip China's. Rivalry between the two countries will be exacerbated by the intensity of the competition. 


1 Economist at the investment bank Goldman Sachs

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