By Trevor McCurdy 
Photo Credit: GIANLUIGI GUERCIA/Pool via REUTERS
BRICS is an alliance that comprises Brazil, Russia, India, China, and South Africa. The term BRIC was coined in the early 2000s by Jim O’Neill, an analyst for Goldman Sachs. BRIC transitioned to BRICS in 2010 when South Africa became a member. Throughout the years BRICS has become more than just an economic alliance, many of the countries now have joint projects in other sectors, like space exploration, and “South Africa has formally joined the China-led ILRS project to establish a permanent moon base.” In essence, BRICS is an alliance of new world powers intended to compete with the G7, a group of 7 of the world’s most advanced economies, which includes the United States, Canada, the United Kingdom, Italy, Japan, Germany, and France.
Why did South Africa join BRICS?
As South Africa has developed into a regional superpower, South Africa currently has the largest GDP in Sub-Saharan Africa, it has looked to expand its allies and trade deals. South Africa chose to ally with BRIC countries, which has created tension between South Africa and the United States. These tensions are seen in statements made by some South African Politicians “including anti-American, anti-NATO remarks by senior African National Congress officials.” Other African countries have found themselves between the two world powers. Algeria has been pressured to choose a side by the U.S. and China. In fact, “U.S. officials have expressed concern over China’s military activities in Africa.” This concern has been a catalyst for the U.S. to become further involved in African countries.
The U.S. wants Algeria to halt its purchases of Russian arms, and China is urging the country to join the BRICS alliance. Currently Algeria imports 73% of its arms from Russia. This has led political leaders in the U.S. to demand sanctions be levied against Algeria. Representative Lisa McClain stated, “There is no sugarcoating it, Algeria’s growing relationship with Russia poses a threat to every nation across the globe.” In turn, Algeria has begun to form new relationships with countries like China. The Algerian president “made a point of stating why Beijing’s model of partnership is so appealing. ‘China does not issue political injunctions,’ he explained. ‘It doesn’t put conditions.’” In short, China “respects other countries.” This statement, and potential jab at U.S. foreign policy, highlights Algeria’s thought process as it looks to expand its global allies.
How is BRICS involved in world economics?
In the 1990s, it was expected that the rapidly urbanizing economies of BRICS member countries could soon exceed the G7’s contributions to the world economy. O’Neill, a Goldman Sachs Analyst, found that by the end of the year 2000, Brazil, Russia, China, and India could account for 23.3% of global GDP. O’Neill’s predictions were accurate; currently, BRICS countries account for about 30% of global GDP.
GDP represents the total output value, usually from inside one country, including every car manufactured or drop of oil sold. Due to their massive manufacturing-based economies, China and India are the primary forces behind this growth. At the same time, Brazil and South Africa have productive agriculture and mining sectors. In fact, “The most recent exports are led by Platinum ($24.5B), Gold ($20.1B), Iron Ore ($7.68B), Diamonds ($7.02B), and Coal Briquettes ($6.72B).” Even Russia, currently under heavy sanctions by NATO due to the Russian invasion of Ukraine, retains control over the European oil market. This is evident when looking at their exports, “The most recent exports are led by Crude Petroleum ($113B), Refined Petroleum ($81.8B), Petroleum Gas ($37.7B)”. These countries’ diverse but influential economies have pushed them onto the global stage as a powerful bloc.
How is the United States involved in world economics?
The United States commands a hefty percentage of global GDP; the “United States’s share of Global GDP in 2022 was 13.5%”, India was only 9.3%. While the United States is not a manufacturing powerhouse like China or India, it has a diversified economy with a wide range of goods and services. The United States contributes to a large part of global GDP, and the U.S. dollar facilitates nearly all transactions across the globe. For example, if India wished to purchase grain from Argentina, that would be done with the U.S. dollar. The power of the dollar determines the worth of many countries’ currencies. Countries trade in USD because of its widespread global presence and the dollar’s relative stability. When the dollar is more robust, it takes more Rupees, for example, to get 1 dollar. This makes trade more expensive for other countries and has also ensured that the United States is deeply invested in countries’ economies in every corner of the globe. In 2022, the United States directly invested 125 billion dollars in China.
Does BRICS present a challenge to U.S. Trade power?
BRICS is a growing power on the global stage with a GDP of 30%, but the United States is a single country with 13.5% of global GDP whose currency is used in nearly every transaction between countries. Currently, “the dollar still dominates global trade. It is on one side of almost 90% of global forex transactions.” BRICS have heavily considered starting their own currency, but they would have to overcome many challenges to do so. One such challenge is the difference in monetary policy between member states. There are also large trade imbalances between the member states of BRICS. China alone accounts for 18.44% of BRICS’ global GDP contributions and these differences make uniform currency harder. However, even if they are not able to create a new trading currency, they still hold influence in global markets. “With its large population, abundant natural resources and rapid economic growth, BRICS has become a motor of world economic growth and plays a role in shaping global policy.”