A BRIEF INTRODUCTION...

The global press is increasingly focusing on the international economic organization known as BRICS, consisting of Brazil, Russia, India, China, and South Africa. As of January 1, 2024, 6 more members will be added: Argentina, Egypt, Ethiopia, Saudi Arabia, Iran, and the United Arab Emirates. According to statements from key members of this organization, particularly the President of South Africa, several African countries are seriously considering joining this economic union.

The recent elections in Argentina and the statements made during the election campaign by the new president have raised questions about Argentina's position within this grouping. Argentina seems to be leaning towards reestablishing strong ties with the developed Western world and reevaluating its relationship with the IMF. However, even without Argentina, the BRICS nations currently account for one-third of the world's GDP and represent 40% of the global population. This significant economic presence is one of the reasons why this forum is gaining increasing international attention.

The term BRIC was coined in 2002 by British economist Jim O'Neill, a prominent figure at Goldman Sachs. O'Neill envisioned BRIC as a concept representing a coalition of developing countries that would emerge as an alternative to the unipolar world dominated by the US dollar.

The realism of these ideas warrants further analysis.

BRICS – AN ENTITY WITHOUT UNITY

Is BRICS a well-organized organization in terms of economic and financial policies, key decision-making, and consolidated joint institutions? It must be admitted that BRICS still does not have the institutional and organizational structure, nor the commitment and political will necessary to impose joint policy-making in certain sectors or well-defined rules for all its members.

Each member country retains full sovereignty over its economic and financial policies, which are not conditioned by participation in BRICS. Unlike supranational organizations like the European Union, which have clear criteria and obligations for membership, BRICS is still in its early stages of development. 

We can say that a significant step in this journey was taken in 2014 when the "New Development BANK" - BRICS was founded as an alternative mechanism of the IMF and the World Bank. The Shanghai-based bank, chaired by Dilma Rousseff, the former President of Brazil, would credit participating countries in their joint projects of mutual interest.

This bank started its activity with a capital of 100 billion dollars (the base currency is that of all BRICS countries converted to dollars for accounting purposes). The goal of competing with the IMF and the World Bank which essentially has a capital of 77,000 billion dollars was more like a utopia and was quickly abandoned. The European Union (admittedly, with a much longer and more serious institutional history than BRICS) has built a well-defined policy for all member countries, mobilizing common funds for each country's development projects based on a certain philosophy with a clear goal. All EU economic policies have very clear objectives. Such elements are still not observed at N.D. Bank - BRICS.

As far as the political dimension is concerned, there still does not seem to be a deep political convergence, which would be ratified with a clear document, where the obligations, rights, or commitments of each country would be essentially determined. Since we are not dealing with a well-defined alliance, paradoxes are also noticed, such as the fact that India is simultaneously a member of BRICS, but also of QUAD (Quadrilateral Security Dialogue), a strategic security dialogue platform between Australia, India, Japan, and the United States.

So, on the one hand, India is in BRICS and on the other, it goes counter the interests of China, the main ally in this organization through participation in QUAD. Also, India is at the same time a member of "The Shanghai Cooperation Organization" (SCO), which is a response to the QUAD. All these elements show that BRICS still has a long way to go to be identified as an international organization with a clear profile.

THE BRICS TRAJECTORY STARTING FROM THE 2009 CRISIS

The economic analysis of the BRICS countries must begin with the crisis of 2009, a pivotal moment that posed significant challenges to these emerging economies. Dividing the BRICS nations into two groups based on their economic structures is essential. Russia, Brazil, and South Africa rely heavily on raw material exports, while India and China exhibit industrializing tendencies.

During the 2009 crisis, the first group faced considerable difficulties due to the decline in raw material prices exported to developed nations. However, through strategic market interventions, they managed to limit the decline to 1-2%, realizing that the crisis would be relatively short-lived.

In contrast, India and China, with their export-oriented economies, experienced minimal impact from the crisis. Despite a noticeable slowdown from their accustomed double-digit growth rates, both countries sustained GDP growth of around 4% from 2009 to 2011, with some years even reaching 8% or 9%.

The crisis prompted a restructuring of India and China's economies, attracting investments from G7 countries seeking to expand production bases. However, this trend did not extend to the other BRICS nations due to greater sensitivity to the crisis, political corruption, and technological deficiencies.

These economic shifts also precipitated social changes. Before the 2008 crisis, India's middle class was around 1%, while China's was at 3%. By 2015, as the crisis abated, these figures soared to 15% in both countries, fueled by increased focus on innovation and technology, resulting in more lucrative job opportunities.

Post-2015, the recurrence of raw material crises affected Russia and Brazil, while South Africa endeavored to sustain positive development momentum. These economic and social transformations underscore the dynamic nature of the BRICS nations' economies and their evolving roles in the global landscape.

Those who did not feel the crisis were India and China. The latter, despite the US trade war, managed to maintain high rates of development, thanks to exports and technological development. So at the end of 2019, China and India produced 81.1% of the GDP of the BRICS countries. This is how the basic economic powers of this Union are defined. In 2010, China surpassed Japan in terms of GDP level and thus became the second economic power after the USA. Its economic role in the international arena increased significantly and with it, its influence in the BRICS. Today we can say that the union of BRICS countries where China is the undisputed leader, is the answer to the economic grouping of the main Western countries headed by the USA.

Analyzing the differences and perspectives of the two groups within the BRICS, we can observe the impact of the Russia-Ukraine war on the forum's dynamics. Official statements from China, India, and other BRICS nations suggest a cautious approach to the conflict, with attempts to mediate between Russia, the US, and Europe. However, contradictory stances and decisions, particularly evident in UN votes, reveal the complexity of the situation.

The war's repercussions are felt economically, particularly for Russia, whose exports of raw materials to BRICS countries face pressure due to perceived "discounts." While the European embargo on Russia has yet to yield immediate effects, experts foresee long-term negative consequences for the Russian economy.

The divergent economic trajectories of BRICS nations further complicate matters. Countries like India and China, characterized by robust growth rates exceeding 4%, constitute one group. In contrast, another group comprises nations facing short-term and long-term development crises. This dichotomy mirrors the theory of "two-speed spreading" observed in the EU but is unfolding at a faster pace within the BRICS framework.

Moreover, candidate countries seeking BRICS membership, such as Iran and certain African nations, receive preferential prices for Russian raw materials but wield minimal political influence on the global stage. This underscores the emerging disparities and challenges within the BRICS alliance, necessitating nuanced approaches to address the varying needs and interests of member states.

The crisis of the war in Gaza and the Israeli policy on the "rule of Palestine" seems to be somewhat strengthening the BRICS politically in terms of military exchanges and political information. However, all specialists think that the military unity of BRICS is far from the structure of NATO and that it is more about political support than military and economic ones. In conclusion, experts judge that it is too soon to think that BRICS can affect the current state of global affairs, even though in 2050, China is predicted to be the main producer of world GDP.

CAN BRICS CHANGE THE NEW WORLD ORDER?

To comprehensively assess the potential of BRICS countries to influence the existing world system, we must consider factors beyond traditional economic metrics like GDP and growth rates. Several key elements merit attention:

1. State and Economic Organization: Some BRICS countries are autocratic regimes, whereas democracies such as Brazil, India and South Africa display hegemonistic traits. While autocracy can initially foster economic development, sustained success depends on factors such as corruption levels and the ability to compete in free markets. Historical examples, such as the formerly autocratic European states like Spain, Portugal, and Greece, illustrate that economic gains can erode over time due to systemic corruption and inefficiencies.
2. Per Capita Income Disparity: Despite contributing a significant portion of global GDP, BRICS countries exhibit large disparities in per capita income compared to Western nations. For instance, per capita income in the USA is approximately ten times higher than that of China and other BRICS nations. Economic dominance should not only be measured by production levels but also by the well-being of the population.
3. Lack of Political Unity: BRICS nations lack doctrinal political unity and often have cultural and territorial disputes among themselves. For example, China and India have ongoing territorial claims, leading to tensions and covert maneuvers along their borders. These internal differences may hinder cohesive action on the world stage.
4. Demographic Trends: China faces challenges from an aging population, which could impede future development due to increased healthcare costs and a shrinking workforce. In contrast, India boasts a youthful population more adept at embracing new technologies and innovations. This demographic advantage may fuel India's growth rates, potentially leading to heightened competition with China and reshaping the global economic landscape.

Despite these complexities, the BRICS phenomenon warrants continuous and in-depth analysis due to its potential to introduce new economic and military forces on the world stage. However, many experts agree that the US dollar will remain the central currency for the foreseeable future, underscoring the enduring dominance of the United States in global finance and geopolitics.

*Academician, economy expert, former Finance Minister and MP, Prof. Dr. Angjeli is president of the Mediterranean University of Albania