fofack19_BRICS  HandoutAnadolu Agency via Getty Images_BRICS BRICS Handout/Anadolu Agency via Getty Images

The BRICS Come of Age

Given the BRICS’ economic success, more than 40 countries have shown an interest in joining the group, and expansion will be high on the agenda of the group's upcoming summit. An enlarged grouping could deepen trade and settlement in local currencies, accelerate de-dollarization, and lead the transition to a more multipolar world.

CAIRO – Nearly 22 years after Jim O’Neill, then an economist at Goldman Sachs, coined the BRIC acronym to capture the economic potential of Brazil, Russia, India, and China, the group – called the BRICS since the addition of South Africa – contributes more to global GDP (in purchasing-power-parity terms) than the G7. The International Monetary Fund forecasts that China and India alone will generate about half of global growth this year.

But with geopolitical tensions running high, and the weaponization of the dollar for national-security purposes continuing to escalate, the BRICS have taken on new significance, offering trade diversion and other relief to weaken the effectiveness of sanctions and fast-tracking the transition to a multipolar world. Since 2014, Russia’s trade with G7 countries has fallen by more than 36%, owing to unprecedented Western sanctions, while its trade with the other BRICS has increased by more than 121%.

Following the European Union’s ban on imports of Russian oil products last year, China and India have been the two dominant buyers of Russian crude. Bilateral trade between China and Russia has been particularly strong in recent years, hitting a record $185 billion last year.