Weekly SmartPills #41
BRICS: AN EVOLVING GLOBAL FRAMEWORK
The Expansion of BRICS and Its New Global Weight
BRICS, an acronym for Brazil, Russia, India, China, and South Africa, is a group of emerging powers that have formed a solid alliance to tackle global challenges. Initially focused on economic issues, BRICS has extended its influence into the political and commercial sectors, playing a significant role on the international stage.
As of January 1, 2024, the number of BRICS member countries has doubled, increasing from 5 to 10. While this may seem economically marginal, other aspects deserve closer scrutiny. This economic bloc, created in 2006, brings together countries with dynamic economies, abundant natural resources, and a large population base. China, in particular, plays a leading role in the group, followed by India, Russia, Brazil, and South Africa.
These countries collaborate on crucial topics such as sustainable development, global security, and reforming international financial institutions.
New Members, Strategic Resources, and Negotiating Power
In recent years, BRICS has strengthened its presence through new developments and trade agreements. The group’s nations are actively seeking to diversify their economic and commercial relations, reducing dependence on traditional markets. The signing of bilateral and multilateral agreements, with particular focus on China and India, reflects a concrete commitment to increased economic cooperation.
Recently, BRICS has also shown growing interest in promoting innovation and technology. Collaboration in the tech sector—illustrated by joint initiatives in telecommunications and artificial intelligence—reflects the group’s intention to stay at the forefront of 21st-century challenges.
The most recent countries to join the group—Ethiopia, Egypt, the United Arab Emirates, Iran, and Saudi Arabia—are economically insignificant when compared to China. Together, the new members account for around $3 trillion, compared to nearly $20 trillion from China alone.
However, they possess oil, natural resources, and large quantities of rare earths. BRICS controls 44% of the world’s oil, compared to just 4% for G7 members, 45% of the global population compared to 9%, half of global wheat and rice production, and all key metals and rare earth elements. The admission system is very simple, and over 40 countries are reportedly interested in joining.
Future Challenges and Ray Dalio’s Perspective
Despite this, BRICS must face several challenges, including managing internal differences and the need to strengthen cohesion. Nonetheless, the group remains a key player on the international stage, directly influencing the global economic and political landscape. BRICS is not only an economic coalition but also an example of how emerging nations can collaborate to shape a more sustainable and inclusive global future.
Ray Dalio, founder of Bridgewater Associates, one of the world’s largest asset management firms, has contributed significant analyses on the shifting balance of economic and commercial power, especially regarding the rise of the Far East. Dalio has highlighted the growing importance of countries like China in the global arena and has offered interesting insights on the future of economic relations.
Dalio emphasized the shift of economic power from the old to the current generation of superpowers. He noted how the West, led by the United States and Europe, is experiencing slower economic growth compared to the Far East, particularly China. Dalio recognizes the need for a new approach to address these dynamic changes.
And you? Do you agree with Ray Dalio?