BRICS is a group of 5 emerging countries with great potential for economic growth. The term was coined in 2001 by economist Jim O’Neill.
BRICS is an acronym for Brazil, Russia, India, China and South Africa. According to O’Neill, these countries would dominate the world economy by the year 2050.
Brief history of the BRICS
Some important aspects to highlight about the cooperation of this group of emerging economies are the following:
- 2001: Jim O’Neill, an economist at Goldman Sachs, coined the term BRIC.
- 2006: The first ministerial meeting is held where they agree to expand multilateral cooperation between them.
- 2008: They issue a joint statement on the group’s position on current global issues.
- 2009: The first BRIC Summit is held and a statement is issued with the objectives and values of the bloc.
- 2010: South Africa joins the group, adding the “S” to BRICS. From this moment on, annual summits begin to be held to promote multilateral cooperation.
- 2014: They sign a treaty for the creation of the New Development Bank. The previous one had been established in 2013.
Conditions of the emergence of the BRICS
The BRICS were emerging countries with rapid economic growth, the main reason why they were considered relevant to the global panorama. The predicted success of these economies is based on the abundance of natural resources and favorable demographics. At the beginning of the century, the boom in the price of commodities made them candidates to continue a path of significant economic growth.
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However, despite the positive prospects for them, they largely depended on achieving political stability. In this sense, the proposal was that economic power leads to the consolidation and balance of political power.
In the different summits held, they reached agreements in different areas. Some of these are:
- Elaboration of a common position for the conflicts in Libya, Syria and Afghanistan.
- Agreement on the reforms of the IMF and the World Bank and other common economic and financial matters.
- Creation of the BRICS Interbank Cooperation Mechanism.
- Trade and investment agreements.
- Joint cultural cooperation.
- They also discussed energy, agriculture, use of space, health, education and tourism.
Decline of the BRICS
The global financial crisis of 2008 and the end of the commodity supercycle stopped the growth of these countries. Therefore, they ceased to be attractive to investors, a procyclical variable that further deteriorates the slowdown in growth. In fact, Goldman Sachs’ BRICS investment fund was closed as a result of this situation.
Likewise, the group’s cooperation did not grow significantly compared to the rest of the world. Except for China, the others failed to significantly increase trade among other members.
O’Neill never considered them becoming a cooperative bloc like the EU, for example. Finally, a limitation for this is the geographical separation between the countries, which was a major impediment to the increase in trade.