What are the BRICS Countries?
BRICS is the acronym for the initial letters of one coalition of Brazil, Russia, India, China, and South Africa. As such, today it is an important intergovernmental organization with an intention to empower economic cooperation and political coordination among its members. The addition of Iran, Egypt, Ethiopia, and the United Arab Emirates as members into the bloc in 2024 saw the number go up to nine full members and more countries have been vetting towards joining BRICS eve after President-elect, Donald Trump has vowed to increase tariffs on all BRICS countries to a 100 percent if they abandon the U.S dollar.
Origin of BRICS
The BRIC concept was coined in 2001 by Goldman Sachs economist Jim O’Neill when he identified Brazil, Russia, India, and China as emerging market economies that were likely to show exceptional growth. The term was actually coined to stress investment opportunities within these countries.
BRIC was formally institutionalized on June 16, 2009, with a summit in Yekaterinburg, Russia, where the leaders of the four countries came together to discuss common interests and collaboration. In 2010, December brought South Africa into their fold and the rechristening as BRICS. This bloc has since grown more influential, with its first significant summit to discuss economic collaboration and political coordination taking place in 2009.
Expansion and recent developments
Within the last couple of years, BRICS has been quite active in expanding its membership and influence on the world stage. During the 2024 summit in Russia, Iran, Egypt, Ethiopia, and the UAE came on board into BRICS. That shows a new turn of BRICS in strategy to boost its geopolitical clout with big economic powers in several regions.
It now comprises around 37% of the world’s GDP and 40% of the global population. This demographic and economic weight adds to its influence as a counterbalance to the G7 and the IMF-dominated West.
Currency used by BRICS
BRICS does not have a unified currency at the moment, necessary for transactions among constituent members but recently there has been plans to create one and boycott the U.S Dollar in financial transactions which has led President-elect, Donald Trump to issue threats of adding 100 percent tariffs on all goods imported from BRICS countries if they push through with it. However, an alternative currency has been in the course of development that would help trading among the bloc. This would be some kind of an alternative currency that is aimed to try to reduce reliance on dominant currencies such as the US dollar and euro in international trade.
It would involve designing a financial instrument that can stabilize the trade relations among members and maximize their immunity to external shocks of the economy. For example, such a form of BRICS currency would have a backing from its umbrella basket of member currencies, commodities such as gold.
Objectives of monetary cooperation
The need to free themselves from dependence on the Western monetary and financial system is one of the causes that pushes towards one single currency. By developing intra-BRICS trade through the use of either a single currency or the local currency, members can reduce transaction costs and bolster economic relations among themselves. Proposals, such as the New Development Bank initiated in 2015, whose loans are set to be in local currency, would even further encourage that trend.
BRICS is an active coalition of emerging economies for a reformed global economic governance and a multipolar world. What started as a pure investment concept has significantly broadened over the past couple of years into a strong intergovernmental organization. So far, there is no unified currency yet, but the talks continuing on creating one speak for the ambition of this bloc to enhance economic cooperation and reduce dependency on the financial systems of the West.
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