BRICS was coined by an economist known as Jim O’Neill in 2001. It was meant to define the fastest-growing economies in the world. Officially, it came into shape in the year 2006, though South Africa joined in the year 2010. Given below are the reasons for putting together BRICS:
- Economic cooperation amongst the developing nations;
- Trade relation and access to the market;
- Emergence of Global Governance through the IMF, World Bank among other institutions.
BRICS: The Economic Powerhouse
Taken altogether, BRICS accounts for over 40% of the world’s population and more than 25% of the world’s Gross Domestic Product (GDP) and over 18% of global trade. This signifies that it is a heavyweight group in the world market, especially in commodity markets, those dealing in food and energy resources, and in technological areas.
2024 Expansion
Somewhat astonishingly, BRICS went ahead and expanded its membership by adding countries from the Middle East, Africa, and Asia. The expanded composition now includes membership from the following nations:
- Saudi Arabia
- United Arab Emirates
- Egypt
- Argentina
- Ethiopia
This move reflects BRICS’ ambition to create a global coalition beyond the existing membership. The inclusion of these nations provides immediate benefits due to their geopolitical standing. Saudi Arabia and the UAE are major players in global energy markets. Argentina is a crucial player in agricultural exports, while Egypt and Ethiopia bring strategic geopolitical influence to Africa.
How Does BRICS Expansion Affect the Global Economy?
1. Shift in Global Trade Patterns
The inclusion of Saudi Arabia and the UAE strengthens BRICS’ influence in the global energy markets. BRICS consolidates trade agreements that promote alternative currencies for trades against the USD in international transactions.
2. Financial System Alternatives
Among other priorities for BRICS, one key focus is developing an alternative system for international settlements beyond SWIFT and reducing dependency on the U.S. dollar. The New Development Bank (NDB) plays a central role in financing infrastructure projects across member countries, an initiative reinforced by this accelerated expansion.
3. Multipolar World Order
The addition of new members gives BRICS a stronger voice in international organizations such as the United Nations (UN) and the World Trade Organization (WTO). These changes signal a shift towards a global governance structure that better represents the interests of developing nations.
BRICS versus G7: A New Rivalry?
Economic Comparison
While the G7 represents the richest democracies, including the U.S., Japan, and Germany, BRICS derives its strength from its large population and resource bases. The G7 still leads in per capita income, but the economic power of BRICS is rapidly closing the gap:
- G7: Approximately $40 trillion;
- BRICS: About $32 trillion after expansion.
This economic shift highlights a global economic power transition.
Geopolitical Influence
BRICS extends its geopolitical reach across Asia, Africa, and South America, acting as a counterbalance to the Western-dominated G7 nations.
Role of BRICS in Global Energy Markets
Oil and Gas Dominance
With the entry of Saudi Arabia, the UAE, and Russia, BRICS strengthens its influence over the global oil and gas supply chain. This could lead to significant changes in pricing and global energy policies.
Renewable Energy Initiatives
BRICS is also a major investor in renewable energy. Countries like India, China, and Brazil are leading in solar, wind, and bioenergy projects, contributing to the global shift toward sustainable energy solutions.
Possible Challenges to the New Composition of BRICS
1. Divergence of National Interests
The expansion of BRICS brings together countries with diverse political systems, economic structures, and strategic goals. Aligning interests in trade and security remains a challenge.
2. Financial Constraints
BRICS still lacks financial institutions as powerful as the IMF and World Bank. The group needs massive contributions from its members to compete at the same level.
3. Western Pushback
The expansion of BRICS may be perceived as a challenge to U.S. global dominance. Western nations could respond with sanctions, trade restrictions, and diplomatic pressure to curb BRICS’ growing influence.
BRICS Future Outlook
1. More Robust Trade Ties
BRICS members are likely to increase intra-group trade, reducing their reliance on Western markets. Proposals such as a BRICS Free Trade Agreement could facilitate this.
2. BRICS Currency Expansion
One of the most anticipated developments is a common BRICS currency to challenge the U.S. dollar’s dominance in global trade. Although still in early discussions, this initiative could reshape international finance.
3. Greater International Influence
With its expanding membership, BRICS is poised to play a major role in addressing global challenges, including climate change, technological development, and healthcare.
Conclusion 
The expansion of BRICS marks a major milestone in global economic and geopolitical dynamics. The group, now more diverse, has the potential to reshape global governance, though challenges remain in financial and political alignment. With enhanced cooperation and economic growth, BRICS could emerge as a dominant force in the 21st century.
Frequently Asked Questions
1. What does this new expansion create for BRICS?
Answer: This new expansion transforms BRICS into a global organization with stronger bargaining power in trade, energy, and geopolitics.
2. How does BRICS balance the G7?
Answer: The expanded membership and resource base allow BRICS to offset the economic and geopolitical dominance of the G7.
3. What will be the impact of BRICS on world trade?
Answer: BRICS strengthens intra-group trade while promoting alternatives to dollar-based transactions, increasing its stake in the global market.
4. Can BRICS create a common currency?
Answer: Discussions are ongoing, but due to logistical challenges, a common BRICS currency remains unlikely in the short term.
5. What are the main challenges for BRICS after expansion?
Answer: The main challenges include aligning national interests, securing financial backing, and managing resistance from Western powers.
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