Expert Speak Raisina Debates
Published on Mar 04, 2023

Increased investment and support across BRICS can be an incisive way to leverage the BRICS and serve as a counterpoint to Bretton Woods orthodoxy

Leveraging BRICS in times of economic uncertainty

This article is part of the series—Raisina Edit 2023.


Since its inception, the BRICS countries' collaboration has proven resilient and productive. For the BRICS countries to strengthen their partnership, overcome these uncertain times, and consider the ongoing and increasing institutionalisation that still requires more robust implementation, it is essential to encourage investment and investment facilitation within the group and across other regions. It is also prudent to encourage and support the increase in countries aspiring to engage with the BRICS members in various ways.

The five BRICS countries have been actively contributing to global economic development. They have a combined population of 3.22 billion people, which is over 40 percent of the world population, 26 percent of the planet’s land mass across four continents, 25 percent of global gross domestic product (GDP), and 20 percent of world trade. Through its partnership and collaboration since its inception, BRICS has generated a significant impact on global governance, economic development, and efforts to democratise international relations, and continues to make impressive steps in developing and broadening cooperation, as attested by various developing and emerging markets that have shown interest in engaging with the BRICS group. However, each member has a unique domestic context; thus, they must effectively collaborate to overcome obstacles and shared challenges. BRICS need to work together more than before and promote high-quality partnerships.

< style="color: #0069a6;">Despite having diverse socioeconomic issues and political systems, the BRICS countries have worked together to build political trust, strengthen their practical cooperation, and promote open, inclusive, and win-win interactions between their citizens.

The BRICS has progressively grown into a dedicated group for discussion and collaboration among its members. Despite having diverse socioeconomic issues and political systems, the BRICS countries have worked together to build political trust, strengthen their practical cooperation, and promote open, inclusive, and win-win interactions between their citizens. One of the significant turning points in the history of BRICS development would be membership expansion. In 2021, the BRICS National Development Bank (NDB) conducted formal negotiations with prospective members. After successful negotiations, the BRICS NDB approved the admission of the United Arab Emirates, Bangladesh, Uruguay, and Egypt. These nations now have, in the NDB, a new platform to foster cooperation in infrastructure and sustainable development with BRICS members and other emerging economies and developing countries. The President of NDB, Mr Marcos Troyjo, and the Minister of Finance of Egypt, Dr H.E Mohammed Maait, met at the 27th Conference of the Parties of UNFCCC (COP27) and discussed plans for collaboration and shared collective vision to advance the objectives of 2030 Agenda. Working with the NDB, according to Dr H.E Mohammed Maait, is a significant opportunity to advance goals for green and sustainable economic growth.

< style="color: #0069a6;">Iran and Argentina formally applied to join the BRICS bloc, and Algeria has become another country interested in joining the group.

The BRICS NDB's membership growth is consistent with its goal of being a leading development institution for developing market economies. Leveraging BRICS requires full consultation and consensus. As noted following the meeting of BRICS Ministers of Foreign Affairs and International Relations on the margins of the 77th Session of the United Nations General Assembly in September 2022, BRICS members continue to have discussions on the expansion process, which is conducted through the Sherpa channel on the basis of full consultation and consensus among members. Iran and Argentina formally applied to join the BRICS bloc, and Algeria has become another country interested in joining the group. Additionally, Saudi Arabia and Bahrain formalised the desire to join the group.

< style="color: #0069a6;">One of the macroeconomic indices demonstrates that BRICS nations, with the exception of China, were negatively impacted by COVID-19.

COVID-19 led to a global economic crisis and exacerbated vulnerabilities in the form of unemployment, poverty, and inequality. The world continues to recover from the impact of the pandemic, supply chain constraints and subsequent rising inflation. BRICS members have supported each other, from India and South Africa jointly lobbying the World Trade Organization (WTO) to temporarily suspend intellectual property rules related to COVID-19 vaccines and treatments, to the launch of the BRICS Vaccine Research and Development Centre to strengthen cooperation and ensure affordability of vaccines in developing countries and facilitate greater market access for vaccines, diagnostics, and therapeutics. Notwithstanding these valorous efforts, the group has a lot of work ahead of it as it attempts to contain the pandemic and to promote the global economy's recovery. The BRICS nations still need to promote economic recovery by strengthening macroeconomic policy coordination and multilateral cooperation. One of the macroeconomic indices demonstrates that BRICS nations, with the exception of China, were negatively impacted by COVID-19. Figure 1 below shows that the GDP of Brazil, Russia, India, and South Africa decreased in 2020. COVID-19 led to economic losses in these four BRICS countries and worsened unemployment, poverty, and inequality in South Africa. China's GDP increased by US $408 billion during the COVID-19 period, from US $14,280 billion in 2019 to US $14,688 billion in 2020, whilst the remaining four countries experienced a decline. BRICS countries' GDP numbers for 2021 indicate a steady comeback despite a decline in 2020. In 2021, all BRICS countries recorded an increase of GDP. China was the epicentre of COVID-19, but was able to properly contain it, which boosted its economic performance.

Figure 1: GDP (current US$ billion), 2021-2021

Source: World Bank

Despite the negative impact of COVID-19 to the group, BRICS strengthened their relationship to work towards a post-pandemic future. Although in past and present times, the world has seen that economic downturns often lead to increased economic nationalism and fracturing of international cooperation, there is an opportunity to change this and seek to enhance and deepen economic cooperation, identifying opportunities for complementarity and support. The world is already interdependent, and the recent crises surrounding the pandemic and supply chain constraints show that further fracturing will lead to deeper recessions and worse inflation globally. To make collective efforts to improve global economic governance, the BRICS countries should coordinate more closely with other emerging economies and within the frameworks of the G20, WTO, World Bank, and International Monetary Fund.

< style="color: #0069a6;">Investment facilitation may encourage investment and accelerate the industrialisation and structural transformation of host economies, if coordinated with national development plans and objectives.

Strengthening cooperation will make a significant contribution to the historical success of multilateralism. Further, deeper engagement significantly strengthens bilateral trade and investment in a more constructive environment. Moreover, increased investment and support across BRICS and the current and aspiring NDB members can be an incisive way to leverage the BRICS and serve as a counterpoint to Bretton Woods orthodoxy. Investment and investment facilitation have been important areas of cooperation in BRICS. Investment can encourage equitable growth and sustainable development. Investment facilitation may encourage investment and accelerate the industrialisation and structural transformation of host economies, if coordinated with national development plans and objectives. The BRICS countries have signed a number of agreements and treaties to encourage intra-trade and investment. During this time of economic uncertainty, it is crucial to make use of these agreements to recover from the global crisis. Additionally, the group's growth gives it more legitimacy and strengthens the belief that engagement is worthwhile.

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