Building Blocs

The concept of a “BRIC” group was coined by Goldman Sachs economist Jim O’Neill in 2001, when he argued that if the growth momentum of major emerging countries such as China, India, Brazil and Russia was maintained, they would dominate the world economy by 2050.　

The term immediately gained traction among economists and strategists, and the relevant countries embraced it. In 2009, China, India, Brazil and Russia held the first official BRIC summit in Russia. A year later in 2010, South Africa joined the bloc, forming a five-country bloc known as BRICS.　

Since then, BRICS emerged as a major platform for emerging economies to cooperate on development and promote fairer global governance through reform to existing political and economic structures. In more recent years, as the developing world is increasingly frustrated with the status quo of the world order in which their voice is seriously underrepresented, BRICS has become much more attractive to the Global South.

During the Kazan Summit, 13 countries, including Malaysia, Indonesia, Vietnam, Thailand, Algeria, Belarus, Bolivia, Cuba, Kazakhstan, Nigeria, Turkey, Uganda and Uzbekistan became BRICS partner countries, with the option to become full members in the future. On November 8, Bolivian President Luis Alberto Arce Catacora announced the country has received and accepted the invitation to join the group.　

“BRICS countries boast some of the world’s most promising markets, with high output in energy, food and minerals, alongside rapid advancements in technology,” said Xu Feibiao, director of the Center for BRICS and G20 Studies at the China Institutes of Contemporary International Relations, a top think tank in Beijing.　

Since its establishment, BRICS countries have substantially strengthened their economic and trade integration. China’s combined trade with the other four original BRICS nations has been growing at an average annual growth rate of 11.3 percent, outpacing China’s overall trade growth rate by 3.8 percent over the period, according to figures from the Chinese Ministry of Commerce. Similarly, intra-BRICS trade has grown at an average annual rate of 10.7 percent, compared to only 3 percent for global trade.　

Against this backdrop, “many countries are eager to join BRICS and catch the fast train of growth,” Xu noted.

Although bilateral relations received a major boost after Chinese President Xi Jinping and Indian Prime Minister Narendra Modi assumed leadership in 2014, with high-profile visits exchanged, relations became strained after clashes between border troops from the two countries in 2020 that left 20 Indian and four Chinese soldiers dead. Since the situation remained tense in border regions, the military standoff has not only affected political and economic ties between the two countries but also cast a shadow over BRICS cooperation.　

It was to the surprise of many that India announced on October 21 that the two countries had reached a deal on patrolling their disputed frontier, which China later confirmed. On October 23, Xi and Modi met on the sidelines of the BRICS summit and held their first formal talks in five years. Chinese Foreign Ministry spokesperson Lin Jian noted on October 30 that “the Chinese and Indian frontier troops are implementing the resolutions in an orderly way.”　

Since 2019, Xi and Modi had only briefly spoken with each other during multilateral events, most recently at the BRICS summit in Johannesburg in 2023 and at the G20 summit in Bali in 2022.　

During their Kazan meeting, Xi urged the two countries to strengthen communication and cooperation, enhance strategic mutual trust and facilitate each other’s pursuit of development aspirations. As the world’s two largest developing countries and important members of the Global South, China and India should shoulder their international responsibilities, Xi said.　

Modi echoed these sentiments. Noting that maintaining the steady growth of India-China relations is critical to the two countries and peoples, Modi said India is willing to strengthen strategic communication, enhance strategic mutual trust and expand mutually beneficial cooperation with China.　

The two sides agreed to hold talks between foreign ministers and officials at various levels to bring the relationship back to sound and steady development at an early date. Recovering ties between China and India, the two largest BRICS economies, is a significant development for the group, especially as it seeks to enhance solidarity on issues affecting the Global South as a whole.

Voicing concerns over “the rise of violence and continuing armed conflicts in different parts of the world,” the document reiterated BRICS countries’ commitment to “peaceful resolution of disputes through diplomacy, mediation, inclusive dialogue and consultations.”　

Highlighting “the emergence of new centers of power, policy decision-making and economic growth,” the document stresses that the new realities “pave the way for a more equitable, just, democratic and balanced multipolar world order.”　

“We reaffirm our commitment to multilateralism and upholding the international law, including the Purposes and Principles enshrined in the Charter of the United Nations (UN) as its indispensable cornerstone, and the central role of the UN in the international system,” the declaration states.　

The BRICS countries are committed to cooperation on greenhouse gas reduction and the carbon market to trade carbon credits, and reaffirm the importance of biodiversity conservation and energy efficiency. They recognize the key role of major multilateral platforms, notably the UN and the G20.　

In recent months, a focal point of BRICS development has been on making substantial progress on financial cooperation. After the recent expansion brought in several major oil producers such as Saudi Arabia, Iran and the UAE, BRICS countries now account for more than 40 percent of total global oil output, which substantially increases their influence in energy trading and payment settlements.　

The Kazan Declaration calls for “reforming the current international financial architecture” to “make the international financial architecture more inclusive and just.” The document reiterated that the group “welcomes the use of local currencies” between member states and agrees to study the “feasibility” of establishing an independent BRICS cross-border settlement and depository system, and an insurance company.　

Established in 2015 by BRICS countries, the New Development Bank admitted four new members, Bangladesh, Egypt, the UAE and Uruguay in 2021. By the end of 2023, the NDB, which is based in Shanghai, has approved 105 projects with a total investment of US$35 billion, according to Xinhua News Agency. The key areas of investment are social and economic infrastructure and sustainable development.　

“The New Development Bank should be expanded and strengthened. We must ensure that the international financial system more effectively reflects the changes in the global economic landscape,” Chinese President Xi Jinping said in his speech delivered at the summit on October 23.　

The Kazan Declaration also highlighted the importance of the BRICS Contingent Reserve Arrangement (CRA). Set up in 2015, it is a pool of currency swaps that member countries can use to help each other in times of crisis. “We express our strong support for the CRA mechanism improvement via envisaging alternative eligible currencies,” said the document.　

“Financial cooperation entities like the NDB and CRA can not only enhance global financial security, but also put pressure on the IMF to further reform its quota system, thereby effectively increasing the financial voice and representation of BRICS and Global South countries,” Wang Youming, a senior research fellow in developing countries at the China Institute of International Studies in Beijing, told NewsChina.　

Indian Prime Minister Modi also voiced support for pushing forward financial integration among BRICS countries, saying that India welcomes the use of local currencies and supports strengthening of correspondent banking networks within BRICS. “BRICS has achieved many milestones in the past two decades, and it will emerge as a more effective medium to face global challenges,” Modi said in a speech in Kazan on October 23.　

Meeting with journalists after the Kazan Summit concluded, Chinese Foreign Minister Wang Yi said that the summit marked “a new chapter of solidarity and self-strengthening” of BRICS nations and opened up new prospects for development and prosperity of the Global South.

“The BRICS’s enlargement no doubt has elevated the group’s status and influence in the global political and economic system, but it also presents a challenge for the group to maintain a unified stance on key issues,” Wang Lei, director of the BRICS Cooperation Research Center at Beijing Normal University, told NewsChina.　

Wang noted that BRICS members vary widely in political and economic systems, historical and cultural traditions, stages of social development and comparative advantages. The admission of new members and partners from diverse regions has amplified these differences. “The varying policy preferences and national development priorities pose practical challenges for BRICS in reaching consensus and projecting a unified voice,” Wang said.　

Operating without a formal charter or a fixed secretariat, BRICS adopts an informal character and relies on a rotating chair and equal consultation for decision-making. “In the absence of a binding mechanism, it is essential for BRICS to strengthen its institutional development to ensure the organization’s efficiency and effectiveness,” Wang said.　

For Wang Huiyao, founder of the Center for China and Globalization, a Beijing-based non-governmental think tank, rather than a weakness, the diversity of BRICS countries is a major strength. It “shows the platform’s unique strength in fostering collaboration across the spectrum of development,” Wang commented in an opinion piece published by the South China Morning Post on October 29.　

Noting that many in the West feel apprehensive about BRICS development, Wang stressed that BRICS is not an anti-West bloc but a new platform to enable developing countries to engage in global governance and build a more equitable world order. As an organization primarily focused on economic cooperation, the bloc is “more needed than the military or security alliances emerging in our more geopolitically challenging world,” Wang said.　

While pointing out that BRICS countries and other developing economies try to “reform the unfair and unreasonable global governance system through collective efforts to have the say and representation commensurate with their economic weight,” Wang Youming stressed that although the BRICS platform is a “non-West” one, it is not an “anti-West” mechanism. For example, the NDB is not designed to replace the World Bank, but to “complement and improve the existing international financial institution and make the international financial system more diverse,” he wrote in an commentary published in the Global Times on October 10.　

This view is echoed by Nicholas Bequelin, a senior fellow at Yale Law School. Examining the calls for reforms BRICS countries elaborated in the Kazan Declaration, Bequelin stressed that the prevalent fear among Western analysts that BRICS is an anti-West bloc that seeks to overthrow the existing world order is “overblown,” according to a commentary published in US-based magazine Foreign Policy on October 30.　

“Throughout the 32-page document, the solutions proposed for nearly every issue – from peace and security to development aid and conflict resolution – are routed through existing institutions,” Bequelin wrote. “BRICS only seek to rebalance power within the existing world order rather than to overthrow it.”