BRICS, History, Functions

BRICS is a group of major emerging economies that cooperate in economic, political, and financial matters. The original members are Brazil, Russia, India, China, and South Africa. BRICS was formed to promote economic growth, development, and cooperation among developing nations. The group aims to increase the voice of emerging economies in global financial institutions. It focuses on trade, investment, development finance, and reform of the international monetary system. BRICS also established the New Development Bank to support infrastructure and sustainable development projects. For India, BRICS strengthens global influence and supports economic cooperation.

History of BRICS:

1. Origin of the Acronym (2001)

The history of BRICS begins not as a political entity but as an investment concept. In 2001, British economist Jim O’Neill of Goldman Sachs published a research paper titled “Building Better Global Economic BRICs.” He coined the acronym BRIC to highlight the rapidly growing economies of Brazil, Russia, India, and China as promising investment destinations with massive potential to shape global growth. O’Neill observed that these four countries possessed large populations, abundant resources, and accelerating economic reforms, projecting they would dominate the global economy by 2050. The term was a play on the word “brick,” signifying these nations as fundamental building blocks of the future global economy. Initially, it was purely an economic classification with no diplomatic significance.

2. First Official Meeting (2006)

The transition from investment acronym to diplomatic forum began in 2006. Motivated by shared desire to increase influence in global governance, the foreign ministers of the four BRIC countries met informally on the margins of the United Nations General Assembly in New York. This first meeting marked the formal inception of BRIC as a diplomatic coordination mechanism. The initiative was driven by political will to create a platform for dialogue on major international issues and coordinate stances within institutions like the UN and G20. This informal gathering laid groundwork for institutionalization, demonstrating these emerging powers could collaborate beyond economic complementarities toward common geopolitical objectives.

3. First BRIC Summit (2009)

The first formal BRIC Summit was held in Yekaterinburg, Russia, in June 2009, officially establishing the grouping as an annual leaders-level forum. The summit issued a joint declaration calling for reform of international financial institutions, particularly increasing emerging economies’ voice in IMF and World Bank. Leaders discussed coordinated responses to the 2008 global financial crisis, emphasizing need for diversified global reserve currencies beyond US dollar. The timing was significant—developed economies were weakened by crisis while BRIC nations recovered faster, reinforcing their demand for multipolar global order. This summit transformed BRIC from conceptual grouping into institutional reality with shared agenda for global governance reform.

4. Expansion to BRICS (2010)

In December 2010, BRIC formally expanded to include South Africa, becoming BRICS. South Africa’s admission was strategically significant—it represented the African continent, giving BRICS geographical representation across four continents. China was particularly supportive of South Africa’s inclusion, seeing value in African representation and access to continent’s resources. South Africa attended the 2011 Sanya Summit in China as full member. Critics noted South Africa’s economy was substantially smaller than other members, but supporters argued its continental leadership and diplomatic influence justified inclusion. This expansion demonstrated BRICS’s political character—membership reflected geopolitical considerations beyond pure economic metrics, establishing BRICS as voice of Global South.

5. New Development Bank (2014)

The Sixth BRICS Summit in Fortaleza, Brazil (July 2014) achieved the grouping’s most significant institutional achievement—establishment of the New Development Bank (NDB) and Contingent Reserve Arrangement (CRA) . The NDB was created with initial authorized capital of $100 billion to finance infrastructure and sustainable development projects in BRICS and other emerging economies. Importantly, the NDB featured equal voting rights among all members, contrasting with Bretton Woods institutions where Western countries dominated. The CRA provided $100 billion currency swap line for members facing balance of payments pressures. This summit demonstrated BRICS’s ability to translate political cooperation into concrete institutions challenging Western-dominated financial architecture while addressing members’ practical development needs.

6. Recent Developments and 2023 Expansion

BRICS evolved through various challenges including economic slowdowns, geopolitical tensions, and Western sanctions on Russia. Despite these, the grouping expanded significantly at the 15th BRICS Summit in Johannesburg (August 2023) , inviting six new members: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and United Arab Emirates. Membership doubled to eleven, with effective date January 2024. Argentina later declined under new government, leaving ten members. This expansion reflected BRICS’s growing appeal among developing nations dissatisfied with existing global order. The expanded BRICS represents larger share of global population, oil production, and GDP. China and Russia particularly championed expansion to counter Western dominance, positioning BRICS as alternative platform for Global South coordination.

Functions of BRICS:

1. Political Coordination and Global Governance Reform

BRICS functions as a platform for political coordination among major emerging economies to amplify their collective voice in global affairs. Members coordinate positions on international issues, presenting united stances at UN, G20, WTO, and other multilateral forums. The grouping consistently advocates for reform of global governance institutions including the UN Security Council (seeking permanent seats for India, Brazil, South Africa), IMF quota reforms to reflect emerging economies’ growing weight, and World Bank voting. Through annual summits and ministerial meetings, BRICS leaders issue declarations articulating shared perspectives on global challenges, collectively bargaining for a more multipolar international order that better represents developing countries’ interests.

2. Economic Cooperation and Trade Promotion

BRICS facilitates intra-BRICS economic cooperation to expand trade and investment among members. The BRICS Business Council and BRICS Women’s Business Alliance promote direct contacts between private sectors, identifying opportunities and removing barriers. Members work on trade facilitation measures, customs cooperation, and digital economy integration. The BRICS Partnership on New Industrial Revolution (PartNIR) fosters collaboration in innovation, digitalization, and advanced manufacturing. Despite geographical distances and competitive structures, BRICS aims to increase intra-group trade through preferential arrangements and payment system integration. This economic function creates alternative trade and investment channels, reducing dependence on traditional Western markets and fostering South-South economic linkages.

3. Financial Architecture and New Development Bank

The New Development Bank (NDB) represents BRICS’s most concrete functional achievement—providing development finance for infrastructure and sustainable development projects. The NDB mobilizes resources for projects in member countries and other emerging economies, with emphasis on renewable energy, transport, water, and digital infrastructure. Unlike World Bank and IMF, the NDB operates with equal governance structure (all members equal voting rights) and emphasizes local currency lending to avoid exchange rate risks. The Contingent Reserve Arrangement (CRA) provides $100 billion currency swap mechanism for members facing balance of payments pressures, functioning as BRICS’s own financial safety net complementing IMF facilities.

4. Monetary and Financial Cooperation

BRICS promotes monetary and financial cooperation to reduce dependence on US dollar and strengthen financial stability. Members discuss local currency settlement systems for bilateral trade, enabling direct exchange of Brazilian Real, Russian Ruble, Indian Rupee, Chinese Yuan, and South African Rand without dollar intermediation. The BRICS Interbank Cooperation Mechanism facilitates cooperation among national development banks. Discussions on BRICS common currency periodically emerge, though practical implementation remains distant. The BRICS Payment Systems Task Force explores integration of national payment systems (India’s UPI, Brazil’s Pix, Russia’s SPFS) for seamless cross-border transactions. This financial cooperation function addresses members’ vulnerability to dollar volatility and Western financial sanctions.

5. Social and Cultural Exchange

BRICS fosters people-to-people connections through diverse social and cultural initiatives. The BRICS Academic Forum brings together think tanks and researchers to generate policy ideas. The BRICS Civil Society Forum enables non-governmental organizations to discuss social issues. BRICS Youth Summit and BRICS Young Scientists Forum engage next-generation leaders. Cultural cooperation includes BRICS Film Festival, BRICS Sports Games, and BRICS Cultural Festival showcasing member countries’ artistic traditions. Educational collaboration through BRICS Network University links leading universities for joint research and student exchange. These soft power functions build mutual understanding, create lasting relationships, and strengthen the social fabric underlying political and economic cooperation.

6. Security Cooperation and Counter-Terrorism

BRICS addresses security challenges affecting member states through dialogue and practical cooperation. The BRICS National Security Advisors meet regularly to discuss terrorism, cybersecurity, transnational crime, and regional conflicts. Counter-terrorism cooperation includes information sharing, combating terrorist financing, and coordinating positions in UN counter-terrorism forums. Members collaborate on cybersecurity through working groups developing common approaches to digital threats. BRICS also discusses peaceful resolution of conflicts affecting members’ interests, though differences in bilateral relationships (particularly India-China border issues) limit deeper security integration. This security function recognizes that sustainable development requires stable environment, with BRICS providing consultation platform for addressing threats collectively.

7. Health and Pandemic Preparedness

Post-COVID-19, BRICS strengthened health cooperation functions significantly. The BRICS Vaccine Research and Development Center facilitates collaboration on vaccine development and distribution. Members share best practices on pandemic response, public health systems strengthening, and traditional medicine integration. The BRICS Health Ministers meetings coordinate positions on global health governance, advocating for developing countries’ access to medicines and health technologies. Russia’s Sputnik vaccine, India’s vaccine manufacturing capacity, and China’s vaccine diplomacy created health supply chains among members. This functional cooperation addresses critical gaps exposed by pandemic, building collective capacity for future health emergencies while reducing dependence on Western pharmaceutical monopolies.

8. Climate Change and Energy Transition

BRICS coordinates on climate change negotiations and sustainable energy transition, balancing development needs with environmental responsibilities. Members advocate for common but differentiated responsibilities principle in UNFCCC, emphasizing developed countries’ historical emissions responsibility. The BRICS Energy Ministers meetings promote cooperation on renewable energy, energy efficiency, and technology transfer. Members collaborate on green finance through NDB’s increasing focus on climate projects. However, significant differences exist—China leads in renewables while Russia, Saudi Arabia, UAE prioritize fossil fuel interests. This function navigates these tensions while presenting collective developing country perspective in global climate discussions, emphasizing climate justice and development rights alongside environmental sustainability.