The evolution of Brics and its challenges today

The Brics group of nations, comprising Brazil, Russia, India, China, and South Africa, recently convened in New Delhi for their annual summit amidst escalating geopolitical tensions, energy market disruptions, shipping challenges, and global trade issues. This bloc, initially formed in 2001 by Goldman Sachs Chief Economist Jim O'Neill, aims to challenge the US-led world order dominated by Western powers.

With membership now expanded to include Egypt, Ethiopia, Iran, and the UAE, Brics represents over 40% of the world's population and nearly a quarter of the global economy.

Established in 2015, the New Development Bank, a key Brics achievement, has financed 139 infrastructure and sustainable development projects in emerging markets, totaling nearly $43 billion. However, the bank suspended new transactions with Russia due to sanctions. Additionally, Brics is developing a cross-border payment system, exploring the link between its members' central bank digital currencies, and settling trade in national currencies to reduce reliance on the dollar-based financial system.

Despite these successes, Brics faces numerous challenges today. Divergent interests and disagreements on the bloc's purpose create friction among its members. While Russia and China view Brics as a counterbalance to Western powers, India and Brazil see it more as a platform for economic reform. The recent expansion of Brics has complicated its consensus-based approach, leading to disagreements during the foreign ministers' meeting in May.

Western nations, particularly the US, view Brics with caution, wary of its potential to shift geopolitical power.