Who's more powerful BRICS or Europe? Who's BRICS?

BRICS stands for Brazil, Russia, India, China and South Africa. The G7 include Europe, Canada and Japan. Putin has aligned himself with BRICS nations in his efforts to carve out the Donbas buffer zone in Ukraine. So much for our threats to isolate Russia. Mission, not accomplished.

Leaders of BRICS, a group of the world’s emerging economies, are attending the group’s 16th summit this week, hosted by Russian President Vladimir Putin in Kazan, a city in southwest Russia.

This year, 36 countries are participating in the 3-day conference, as the group has expanded widely beyond its founding members — Brazil, Russia, India, China, and South Africa — to become a global economic force. It newest members are Egypt, Ethiopia, Iran and the United Arab Emirates.

An upside down world

The group, which often presents itself as a counterweight to the Western-dominated world order, now accounts for more than one-third of global economic output (PPP adjusted) — a figure that’s only expected to rise in the coming years. The ascendence of the BRICS has been well telegraphed, with the term originally coined by a Goldman Sachs economist way back in 2001, but the group didn’t officially meet at a summit until 2009. By the end of the decade, BRICS’ share of global GDP is expected to rise to nearly 40%.

With the International Criminal Court’s arrest warrant of Putin in the background, this year’s meeting feels particularly pointed — a show to prove to the West that Russia isn’t isolated, despite the widespread condemnation of its invasion of Ukraine.

So, what do the BRICS want? Although the group’s actual structure is informal, one of the group’s key goals is de-dollarization, or pivoting away from the US dollar as the main currency for international trade. For countries that are heavily subjected to tough Western economic sanctions, like China and Russia, this would help capital flow free of US pressure and influence. So far, practical changes have been relatively insignificant: China now has an alternative to the SWIFT payment system (though it’s lightly used) and some countries have switched their currency reserves from dollars to gold.

Putin gathers allies to show West's pressure isn’t working

Oct 21, 2024

Steve Rosenberg. BBC News

Imagine you're Vladimir Putin.

The West has dubbed you a pariah for invading Ukraine. Sanctions are aiming to cut off your country's economy from global markets.

And there's an arrest warrant out for you from the International Criminal Court.

How can you show the pressure is not working? Try hosting a summit.

This week in the city of Kazan President Putin will greet more than 20 heads of state at the Brics summit of emerging economies. Among the leaders invited are China’s Xi Jinping, Indian Prime Minister Narendra Modi and Iranian President Masoud Pezeshkian.

The Kremlin has called it one of the "largest-scale foreign policy events ever" in Russia.

"The clear message is that attempts to isolate Russia have failed," thinks Chris Weafer, founding partner of consultancy firm Macro-Advisory.

"It's a big part of the messaging from the Kremlin that Russia is withstanding sanctions. We know there are severe cracks beneath the surface. But at a geopolitical level Russia has all these friends and they’re all going to be Russia's partners."

So, who are Russia's friends?

Brics stands for Brazil, Russia, India, China and South Africa. The grouping, often referred to as a counterweight to the Western-led world, has expanded to include Egypt, Ethiopia, Iran and the United Arab Emirates.

Saudi Arabia, too, has been invited to join.

What Moscow really wants from US election

The Brics nations account for 45% of the global population. Added together, members' economies are worth more than $28.5tn (£22tn). That's around 28% of the global economy.

EPA The Brics 2024 banners during preparation for Brics Summit 2024 in KazanEPA

This year's Brics summit is taking place in Kazan, Russia

Russian officials have indicated that another 30 countries want to join Brics or seek closer ties with the club. Some of these nations will take part in the summit. In Kazan this week expect a lot of talk about Brics representing the "global majority".

But apart from providing Vladimir Putin his moment on the geopolitical stage, what is the event likely to achieve?

Keen to ease the pressure from Western sanctions, the Kremlin leader will hope to convince Brics members to adopt an alternative to the dollar for global payments.

"A lot of the problems Russia's economy is facing are linked to cross-border trade and payments. And a lot of that is linked to the US dollar," says Mr Weafer.

"The US Treasury has enormous power and influence over global trade simply because the US dollar is the main currency for settling that. Russia's main interest is in breaking the dominance of the US dollar. It wants Brics countries to create an alternative trade mechanism and cross-border settlement system that does not involve the dollar, the euro or any of the G7 currencies, so that sanctions won't matter so much."

But critics point to differences within Brics. "Likeminded" is not a word you would use to describe the current membership.

"In some ways it’s a good job for the West that China and India can never agree about anything. Because if those two were really serious, Brics would have enormous influence," notes Jim O'Neill, former Chief Economist of Goldman Sachs.

"China and India are doing their best to avoid wanting to attack each other a lot of the time. Trying to get them to really co-operate on economic things is a never-ending challenge."

It was Mr O’Neill who, at the turn of the century, dreamt up the acronym "Bric" for four emerging economies he believed should be "brought into the centre of global policy making".

But the four letters would take on a life of their own, after the corresponding nations formed their own Bric group - later Brics, when South Africa joined. They would attempt to challenge the dominance of the G7: the world's seven largest "advanced" economies (Canada, France, Germany, Italy, Japan, the UK and the US).

It's not just India and China who have their differences. There is tension between two of the newest Brics members, Egypt and Ethiopia. And, despite talk of detente, Iran and Saudi Arabia have long been regional rivals.

"The idea that they’re all going to fundamentally agree on something of great substance is bonkers really," believes Mr O’Neill.

And while Russia, fuelled by anti-Western sentiment, talks about creating a "new world order", other Brics members, like India, are keen to retain good political and economic relations with the West.

In Kazan, Vladimir Putin's task will be to skim over the differences and paint a picture of unity, while showing the Russian public – and the international community – that his country is far from isolated.