Bigger Brics club faces challenges amid opportunities

Business Times

a day ago

FOR years, the emerging-market club of Brics appeared to lack momentum at successive summits. But that perception changed last year, with the club welcoming new members from the Global South, alongside its growing global economic footprint and efforts at non-Western innovation, including in artificial intelligence (AI).
Brics leaders are preparing to meet for their two-day summit in Brazil hosted by President Luiz Inacio Lula da Silva on Sunday (Jul 6), at an event for a club that has doubled in size in the last 12 months.
Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates (UAE) have become members, alongside longstanding members Brazil, Russia, India, China and South Africa; Saudi Arabia is mulling an invitation to join as a full member of the club.
As the new members bring diversity to the club, the number of Brics 'partner countries' has also grown; these now include Belarus, Bolivia, Malaysia and Thailand.
Diversity aside, a second source of enhanced appeal of Brics membership is the club's growing global footprint, a point highlighted by Russian President Vladimir Putin at the St Petersburg International Economic Forum in June.
He noted that in 1992, the G7 industrialised countries accounted for 45.5 per cent of global growth, while the original Brics members were at 16.7 per cent.
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By 2023, these figures were dramatically different – at 29.3 per cent and 37.4 per cent, respectively. With the expansion of the Brics in 2024 and 2025, Putin said last month that Brics now accounts for around 40 per cent of the world economy.
He also asserted that it was inevitable the growth gap would widen. 'In recent decades, the entire global economic dynamics came from the Brics countries.'
He noted, for instance, that trade between Brics countries had now passed US$1 trillion and cited the dominance of corporations headquartered in the Brics bloc, in industries such as energy resources, metals and food.
A third area of attractiveness for the Global South is innovation from a non-Western perspective. For example, the club last year agreed to a 'Charter on Responsible AI'.
This initiative is promoting culturally sensitive AI development, to reduce the Global South's reliance on Western cloud providers and foundational models. Financial support is coming from the New Development Bank (NDB), which launched a US$5 billion digital sovereignty fund this year to boost AI infrastructure.
China, India and Russia are developing their own large language models (LLMs); last year, Brazil and China launched a joint project to build a Portuguese-Spanish LLM.
Efforts are ongoing to cultivate a Brics-based compute stack. China's Semiconductor Manufacturing International Corporation and India's Centre for Development of Advanced Computing are reportedly accelerating 7-nanometre chip production, and Iran and the UAE are investing in quantum computing and national AI entities.
Another aspect is development finance and alternative currencies, including a joint cross-border payments system and a reinsurance company. Putin described the NDB, set up in 2015 by the founding Brics members, as an alternative forum to the World Bank and International Monetary Fund. A key driver for the bank is to finance infrastructure and technology projects across the Global South.
One priority for many Brics members, including Russia, is advancing the use of national currencies in trade between member states and away from the US dollar.
Following increased Western sanctions since 2022, after Russia's invasion of Ukraine, Moscow has been particularly keen to continue to lead the push to create alternative non-Western economic platforms that rely less not only on the US dollar, but also other currencies like the euro.
This includes a proposal for a new payments system, based on a network of commercial banks linked to each other through Brics central banks. This would reportedly use blockchain technology to store and transfer digital tokens backed by national currencies, reducing the need for US dollar transactions.
Russia, the world's top wheat exporter, is also promoting a Brics grain-trading exchange backed by a pricing agency. The goal is to develop an alternative to key Western bourses where international prices for agricultural commodities are commonly set.
Challenges
Yet, despite having more 'wind in its sails', the reality is the Brics bloc faces challenges, too. Part of the reason is the heterogeneity of the membership.
Even among the original five members, there are key differences. Take the example of China's periodic tensions with India, including over border issues.
This rivalry may be one of the reasons Chinese President Xi Jinping will not attend Sunday's summit. While Beijing has officially cited a scheduling conflict, the fact that Brazil issued a state dinner invitation to Indian Prime Minister Narendra Modi may have discouraged Xi, in case it gave the appearance of him being less important than Modi.
These differences are likely to mean that, for the foreseeable future at least, Brics would probably not decisively move beyond an increasingly institutionalised forum for emerging-market cooperation. The growing size of Brics has raised fears that the bloc could ultimately become a unified anti-Western alliance.
This concerns many, given that the founding members alone encompass over a quarter of the world's land area and 40 per cent of its population. This Western fear is partly why Argentina President Javier Milei, an ally of US President Donald Trump, turned down an invitation to join the bloc.
There is also a wider economic challenge for Brics. While Putin, who will also not attend the Brazil summit, has highlighted the economic dynamism of many of its members, there is vastly different performance even among its original members.
China and India have delivered a generally robust economic performance over the past two decades, in contrast with disappointing results in Brazil, Russia and South Africa. The result is that the group is unbalanced. For instance, China's economic output is around 50 times that of South Africa's.
Still, Brics is likely to continue growing in appeal among others in the Global South, even as some pro-Western states like Argentina have declined to join. While some see geopolitical cooperation rising to the fore in coming years, the bloc's centre of gravity remains as an increasingly institutionalised forum for emerging-market cooperation.
The writer is an associate at LSE IDEAS at the London School of Economics