The BRICS is the name given to the group of five countries that began to form this group and to work consensually in areas such as trade, investment, technology, and finance, to promote their common interests on the world stage, seeking to counter the hegemony of other international institutions such as the G7 or the World Bank. The group was formally established in 2006 when the leaders of the member countries met in New Delhi, India. In 2010, South Africa joined the group to form what is now known as BRICS (Brazil, Russia, India, China, and South Africa).

By Felix Madariaga

The BRICS are seen by many as an important counterweight to the G7 countries, and their role in the global economy is a matter of debate and controversy, not least because of the significant results they have achieved. BRICS aims to achieve greater economic and financial independence, particularly about the global system and international financial institutions. It also seeks to strengthen multilateral systems among these countries and with other non-members.

It also aims to encourage emerging and developing economies to realize their growth potential, thereby creating a fairer and more balanced global political and economic system.

Emerging versus mature economies

Together, the BRICS countries account for a large share of the world’s population and a significant proportion of global GDP. The group brings together around 3.5 billion people (around 45% of the world’s population) and, according to IMF projections, the BRICs will account for 33.6% of global output by 2028. Collectively, these countries have huge market potential, a significant pool of labour and control key natural resources for the global economy.

BRICS+ on the world stage

The BRICS have undoubtedly emerged as an alternative to the Western-dominated economic and political order, shifting the global balance of power. They have formed new alliances and agreements with other emerging economies and some developed countries, giving them greater political and diplomatic influence in international organizations such as the United Nations. This has been reinforced by the accession of five new members on 1 January 2024: Iran, Egypt, Ethiopia, Saudi Arabia, and the United Arab Emirates, which together will form the BRICS+.

They have enabled a deepening of economic cooperation, as the BRICS countries have established financial institutions to compete with existing ones and have intensified their economic cooperation with developing countries in areas such as trade, investment, and technology.

Despite the opportunities for cooperation and collaboration among the BRICS member countries, there are also tensions among them and with other world powers that are not part of the group, which could lead to conflicts and economic and political crises.

Today, the BRICS countries are known for their significant economic growth and growing influence in global affairs – together they account for 42% of the world’s population, 23% of the world’s GDP, about 30% of the world’s land area and more than 18% of world trade – and they have begun to organize themselves as an economic and political bloc, holding annual summits since 2009 and establishing the new development bank, known as the BRICS Bank since 2014, which aims to finance sustainable development projects in these and other emerging and developing countries, thereby increasing their influence in the global economy.

The dollar is tending to weaken and disappear as a currency of exchange. The BRICS could be an alternative, a different way of trading with a different currency, a different international system, free from sanctions, free from the impositions of the major powers gathered in the G7 (led by the United States) and other European countries. The BRICS represent the freedom to use the currency of your choice.

Imagine, too, if a military bloc were created among the BRICS, involving the best economies in the world, Russia, China, Brazil, India and Iran. Unfortunately, many countries are being blackmailed by the US to continue using the dollar under threat of retaliation and aid cuts. It will be interesting to see how things develop with the inclusion of new countries that will contribute ideas, resources and people to a project that could become a serious and clear alternative to traditional Western hegemony, which only exploits developing countries and does not consider them as partners in the construction of freer, more united and balanced societies. A clear example of this is Argentina.

Argentina was one of the countries that had been invited to join the BRICS, but with the arrival of the new government of Javier Milei, the refusal was announced, since the commitments of the new administrators had already been signed with the United States, and so at the end of 2023 they officially announced their withdrawal, announcing new economic measures for their country, among which unfortunately the cessation of public works and the cancellation of contracts that had already been approved stand out. The immediate consequence of this will be an abrupt increase in unemployment, the paralysis of a large number of workers, which in the medium term will aggravate the economic crisis already affecting the workers and lead to an unsustainable increase in extreme poverty.

Another of Milei’s measures is the abolition of subsidies for energy and public transport, which will lead to an increase in public and state transport fares, which will directly affect the workers who use them, further reducing their purchasing power, he has also announced the reduction of the state workforce, which has already created thousands of new unemployed.

In the new structure of the Argentine state, the number of ministries has been reduced from 18 to 9, and the number of secretaries from 106 to 54. This means more layoffs, more redundancies, and more pressure on the remaining civil servants. Another measure is to reduce “to a minimum” state transfers to the provinces, which in many cases depend on the central government to function. These are just a few examples of poorly understood policies that do not contribute to the overall economic development of the nation. The end of the SIRA system, in which the state decided which importers had access to dollars and which did not to offset their payments abroad, is being replaced by a statistical and information system that does not require prior authorization: anyone who wants to import can now do so, but at what price?

Faced with these measures, which are contrary to the principles of the BRICS, more than a hundred economists from all over the world signed a text warning the rest of the world that the proposals of the Argentine ultra-liberal “could be very harmful to the Argentine economy and the Argentine people”, including Jayati Ghosh from India, the Serbian Branko Milanovic, the Frenchman Thomas Piketty, and the Colombian José Antonio Ocampo. Argentina’s is a neoliberal scheme that we already know, has been applied in many of our countries, and we also know the consequences on the skin of the poorest. Perhaps, and only perhaps, if we allow ourselves to believe that another world is possible, we will understand the enormous importance that the growth and consolidation of the BRICS can have for real people.