What is BRICS? Its Economic impact in 2024.

What is BRICS?

BRICS is an acronym for Brazil, Russia, India, China, and South Africa. It is a grouping of the world’s major emerging economies. They have been responsible for a significant share of global economic growth in recent years. According to the IMF, the bloc will collectively account for almost 32% of global GDP this year.

The BRICS countries were first identified as a group in 2001 by Goldman Sachs economist Jim O’Neill. O’Neill predicted that the BRICS countries would become major economic powers by 2050. The first BRIC Summit was held in Yekaterinburg, Russia in 2009 in the immediate aftermath of the financial crisis; South Africa joined in 2010, making it BRICS.

The BRICS countries have a number of common interests, including:

  • Promoting economic development and growth
  • Reducing poverty and inequality
  • Reforming the international financial system
  • Promoting peace and security

The BRICS countries have also worked together on a number of specific projects, including:

  • The BRICS Development Bank
  • The BRICS Contingent Reserve Arrangement
  • The BRICS New Development Bank

The BRICS countries are a significant force in the global economy and politics. They are working together to increase their influence in the world.

The 15th BRICS Summit, 2023

The 15th BRICS Summit was held in Johannesburg, South Africa, from 22-24 August 2023. The summit was hosted by South African President Cyril Ramaphosa, who is the current chair of the BRICS group.

The theme of the summit was “BRICS and Africa: Partnership for Mutually Accelerated Growth, Sustainable Development and Inclusive Multilateralism”. The leaders of the BRICS countries discussed a wide range of issues, including economic cooperation, trade, investment, development, climate change, and security.

One of the key outcomes of the summit was the expansion of BRICS membership. The leaders of BRICS invited Argentina, Egypt, Iran, Saudi Arabia, the United Arab Emirates, and Ethiopia to join the group. Full membership for these countries will take effect on January 1, 2024.

BRICS and its economic Impact

The new BRICS countries have had a significant economic impact on the global economy. They are working together to promote economic development and growth, to reduce poverty and inequality, and to reform the international financial system. They are expected to continue to have a major economic impact on the global economy in the years to come.

New BRICS will hold 46% of the population and over 30 % of global GDP, a $30.8 trillion economy that is bigger than the economies of the US and the European Union.

Global oil production will increase to 40% from the current 18% because six of the top 10 oil producers are now members of BRICS.

While their oil intake will also jump from 27% to 36%, oil output will stand at 43%.

To top it off BRICS will account for over 25% of the global exports.

BRICS is not just encouraging trade in local currencies but also exploring a common currency for members. Thus de-dollarization can pose a big challenge to the US dollar.

The six new members will undoubtedly bring new resources and synergies to the organisation. They could also slightly reduce China’s preponderance in economic weight.

The BRICS countries have invested heavily in each other and in other developing countries. In 2022, the BRICS countries invested over US$500 billion in developing countries.

The BRICS countries have also been a major force in the reform of the international financial system. They have called for greater representation of developing countries in the World Bank and the International Monetary Fund.

The BRICS countries have established financial institutions, such as the BRICS Development Bank and the BRICS Contingent Reserve Arrangement. These institutions are designed to promote economic development and growth in the BRICS countries and other developing countries.

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