General Awareness

Changing Role of BRICS and Its Influence on the Global Economy

February 25, 2025

134

The global economy is ever-changing, and world blocs dictate its fate. One of them is a highly influential one, BRICS, the abbreviation for Brazil, Russia, India, China, and South Africa. These five countries possess a significant portion of the global economy and continue to influence international trade, politics, and financial institutions.

In this blog, we are going to discuss the changing role of BRICS and how it is shaping the world economy. We will see how BRICS has changed with time, how it has affected global markets, and what the future of this giant block holds.

What is BRICS?

BRICS are five emerging next-generation big-sized economies, i.e., Brazil, Russia, India, China, and South Africa. BRIC was the term used until 2010 when South Africa was included, and thereafter it is known as BRICS. It is an organization established with the objective to foster economic cooperation, trade, and financial cooperation among member countries.

The Changing Role of BRICS in the World Economy

BRICS contribution has been path-breaking long enough. Let’s observe how:

1. New World Economies to World Giants

The emergence of BRICS was initially conceptualized as a group of fast-emerging economies that would replace Western economies’ dominance in the coming decades. Today, all BRICS nations collectively contribute to nearly 25% of world GDP and are part of world trade and economic policy-making.

2. Growing Trade and Investment

The BRICS countries have expanded trade among themselves and with the rest of the emerging world. They would like to reduce their reliance on Western economies and facilitate local currency trade.

3. The establishment of the New Development Bank (NDB)

The BRICS nation formed the New Development Bank (NDB) in 2014 to finance the development and infrastructure of the emerging markets on sustainable foundations. The bank serves as an alternative to institutions like the World Bank and IMF, since it reduces their dependence on Western financial institutions.

4. Geopolitical Influence

The BRICS alliance has come to be a competitor in the international scene. It is a reaction to Western dominance of the world power centers like the United Nations, G20, and World Trade Organization (WTO).

5. Technological and Innovation Development

BRICS member nations are heavily investing in technology, space research, and artificial intelligence (AI). India and China, in particular, are being envisioned as innovation hubs and thus BRICS is being positioned competitively in the cyber world.

Impact of BRICS on the Global Economy

BRICS has an impact on the global economy in one way or another. Here’s how:

1. Global Economic Growth

The BRICS countries possess over 40% of the entire world’s population as well as nearly 25% of total global GDP. Their growth stabilizes world markets and provides new opportunities for investment.

2. Shift in Trade Trend

BRICS are shifting international trade away from Western nations. Various BRICS members are trading between them in bilateral terms with their domestic currencies in an effort to be less reliant on the US dollar.

3. Alternative Financial Systems

By establishing the NDB and through the progressive conversion to the BRICS common currency, the nations are gradually moving away from the Western financial system. This allows them to be less dependent on external parties in managing their economy.

4. Control of Energy and Resources

Russia and Brazil are richly endowed játurás land, and China and India are among the world’s biggest consumers. Members of BRICS are accelerating their gears towards the achievement of energy security, stabilizing oil prices, and expanded sustainable energy opportunities.

5. Creating World Economic Parity

By promoting the economic growth of the emerging economies at a faster rate, BRICS is lessening the gap between the emerging and developed economies. This is helping to build a world economy that is more balanced.

BRICS versus Western Economies

Western economies and BRICS are shaping the world order and the form of the global world of the future in business and politics. Here, let’s make a comparison of some of the economic indicators:

Feature	BRICS	Western Economies (USA & EU)
Contribution to GDP	25% of global GDP	25% of global GDP
Population	40% of the world population	15% of the world population
Expanding Trade	Growing at high speed	Growing relatively slowly
Dependence on Currency	Establishment of national currency	US dollar and euro hegemony

Challenges Facing BRICS

Despite the success, BRICS is also faced with the following:

1. Economic slowing down

Even though the economies of the BRICS nations have grown at a very rapid pace, economic slowdown in nations such as Brazil and South Africa has negatively influenced growth overall.

2. Political Differences

The BRICS nations have different political systems and ideologies and hence decision-making becomes cumbersome at times.

3. Dependence on China

China is the largest BRICS economy and contributes over 60% of the aggregate GDP of the group. It brings economic imbalance in the group.

4. Trade Disputes

Disputes over trade among member states, such as between China and India, are likely to lead to tensions that deter economic cooperation.

Future of BRICS in the Global Economy

The future of BRICS is good since the group continues to grow. The following is what the future holds:

1. BRICS Widening Membership

BRICS will widen its membership to encompass developing countries in Asia, Africa, and Latin America. This will make it stronger in the world for trade.

2. The Consolidation of the BRICS Currency System

BRICS is developing a unified payment system and promoting local currency exchange to balance the dominance of the US dollar.

3. Increased Global Governance Engagement

BRICS is demanding reform in global institutions like the United Nations and the World Trade Organization to acquire more power over the globe.

4. Technological Advancements

The BRICS nations are exploring space exploration, e-commerce, and artificial intelligence to emerge as world technological giants.

Conclusion

The changing role of BRICS is reshaping the world economy in the next few years. It has grown from an association of emerging economies to a political and economic giant on the global platform. Through efforts like the New Development Bank, local currency trading, and technological advancement, BRICS is shaking the West and driving economic growth in the Third World.

But economic downturns, political tensions, and trade wars are all something that can be overcome so that prosperity will still be the case. And as BRICS continues to expand, the world economy’s focus will still be on BRICS, so it will just be an even bigger player in the global economic landscape.

For students and professional workers looking for worldwide economic trends, ixamBee has expert guidance, courses, and practice tests to be ahead of the game. More info, stay current, and prepare for a successful future with economics!

Preparing for the SBI PO exam requires the right strategy, and ixamBee offers everything you need to succeed! With our SBI CBO online course, expert faculty provide structured learning. Practice with SBI PO Prelims mock tests and analyze your performance with SBI PO Prelims PYP . Enroll in our Target Banking online course for comprehensive guidance and boost your chances of success. Start your journey with ixamBee today! 🚀

At ixamBee, we specialize in providing comprehensive online courses for government exams and online courses for government jobs. Our expertly designed courses for government jobs cater to a wide range of upcoming government exams. Whether you’re preparing for specific courses for government exams or seeking general guidance, ixamBee offers the resources like Beepedia previous year papers, SSC CGL, SSC CHSL, SSC MTS and other mock tests to succeed in exams like RBI Grade B, SEBI Grade A, NABARD Grade A, RRB NTPC, SSC MTS, NIACL Assistant, and more.