Johannesburg – The BRICS economic alliance, recently expanded to include Egypt, Ethiopia, Argentina, Saudi Arabia, Iran, and the UAE, is positioning itself as a formidable force in global economics, offering a new framework for economic cooperation and strategic influence. Representing approximately 32% of global GDP and 46% of the world’s population, BRICS’ growing economic footprint is reshaping trade dynamics and challenging traditional Western-led economic structures.
With average projected growth rates of 3.6% for BRICS nations compared to 1.0% for the G7, BRICS countries such as India (6.8%) and Ethiopia (6.2%) are leading the bloc’s economic momentum. In contrast, the G7, including major economies like the US and Japan, faces slower growth, with the German economy expected to grow by just 0.2% in 2024.
When adjusted for purchasing power parity (PPP), BRICS has surpassed the G7 in combined GDP, reflecting its members’ cost-effective production capacities and competitive pricing.
A primary focus of BRICS’ expanded strategy is to reduce reliance on the US dollar. Leaders discussed local currency trade and alternative financial instruments during the 2023 summit, aiming to create a stable, multipolar financial system that lessens exposure to currency fluctuations. By promoting trade in local currencies and digital platforms,
BRICS hopes to stabilize cross-border transactions within the bloc. Trials of digital payment systems led by Russia and India are underway to support this shift, and experts predict that such systems could reshape global financial flows by reducing dependency on the US dollar.
The New Development Bank (NDB) has been a cornerstone of BRICS’ commitment to development, with over $35 billion approved for more than 100 infrastructure projects across member countries. In 2024, the NDB aims to fund projects totaling $30 billion over the next five years, focusing on:
Energy: Renewable energy initiatives are expected to add 10,000 MW of power generation capacity across Africa by 2030, enhancing energy access and sustainability.
Transportation: Infrastructure projects in countries like Ethiopia, Brazil, and India aim to improve transportation networks, bolstering trade logistics and market connectivity.
Cyber and Digital Infrastructure: The NDB is funding advanced digital infrastructure, including platforms that support local currency transactions, which align with BRICS’ goal of establishing a resilient economic architecture independent of Western financial systems.
BRICS is strengthening its internal trade by capitalizing on sectoral complementarities. Intra-BRICS trade reached $648 billion in the first nine months of 2024, marking a 5.1% year-on-year increase. China, the bloc’s largest economy, has been instrumental in trade exchanges, exporting steel, electronic goods, and agricultural products to other member countries.
Saudi Arabia and the UAE, new members with significant oil production capabilities, are expected to contribute greatly to the bloc’s energy security while benefiting from BRICS’ diversified economic base【31】.
BRICS leaders emphasized the bloc’s commitment to UN reforms and called for permanent African representation on the UN Security Council, aligning with the bloc’s vision for a more balanced global order.
This stance reinforces BRICS’ position as an advocate for emerging markets and offers a distinct alternative to the G7’s focus on Western-centric governance. The bloc’s focus on inclusive diplomacy aligns with its economic policies, fostering South-South cooperation and positioning BRICS as a global leader in sustainable, cooperative development.
The BRICS expansion signifies a new chapter for emerging markets, particularly African countries, by providing access to capital, technology, and sustainable development initiatives. With continued investments in infrastructure, local currency trade, and sectoral diversification, BRICS is advancing a model of economic development that prioritizes autonomy and mutual growth. As BRICS continues to implement these strategies, it is likely to cement its role as a counterbalance to the G7, promoting a more equitable, multipolar global economy focused on shared prosperity and stability.