It was this phenomenon that resulted in the BRICS group becoming a relevant bloc within both the economic and political spheres, introducing the possibility of a multi-polar world, in which developing states have a voice on the international stage. However, after almost a decade of demonstrating an impressive ability for GDP growth, increasing their political influence, and even challenging the US-dominated world order through the creation of institutions such as the New Development Bank (NDB), trade deals, and annual summits, the future of the BRICS bloc as a relevant global phenomenon is being questioned as geographical, political, and economic diversity, as well as diverging opinions on current events threaten the cohesion of the group.

On November 14, 2019 the BRICS countries held their eleventh annual summit in Brasilia, with the theme of this year’s meeting being, ‘BRICS: Economic Growth for an Innovative Future.’ While the official focus of the summit was developing strategies to stimulate the countries’ investments amid a slowing global economy, the countries also reaffirmed their commitment to “uphold multilateralism in the face of unprecedented challenges and rising protectionism,” with the reparation of the relationship between leaders Xi Jinping and Jair Bolsonaro on the unofficial agenda. The tone of the meeting was ultimately positive, with the bloc releasing a public declaration of the numerous commitments made in relation to stimulating economic activity, combating terrorism, strengthening intra-group cooperation, and promoting multilateralism in the global order. However, to say this summit serves as evidence of the group’s relevancy is simplistic, insofar as the complex relationships between the group’s members, as well as between members and external parties such as the United States and South America suggest the group is experiencing a decrease in power and strength, and if it is to continue along a path of success, its leaders must first set aside their differences and focus on their common objectives.

The New Development Bank as a Vehicle for Economic Success

As one of the key strategies for stimulating investments and economic growth, the BRICS announced their intention to further expand the New Development Bank and increase the bank’s lending capacity for infrastructure and other projects. To date, the Bank has a total authorized capital of $100 billion, with each BRICS country contributing equally to the pool, and an additional Contingency Reserve Arrangement, which can be accessed by BRICS members in need of immediate funds. While the bank’s membership is currently restricted to BRICS countries, the Bank’s loans are available to all members of the UN, with a proposed amendment to extend membership opportunities to outside states, so long as the proportion of BRICS-contributed capital in the fund does not fall below 55 percent.

Established in order to rival the US and Europe-dominated International Monetary Fund (IMF) and World Bank, the NDB was explicitly intended to break the West’s hold on finance and development, and to date, represents the BRICS’ most tangible achievement. Unlike the IMF and World Bank which often impose strict conditions and high interest rates on debtor countries, pushing them deeper into economic turmoil, the NDB has been a key institutional factor in the financing of projects both within the BRICS countries and others outside the grouping. Given the agriculture-based economies of many developing and periphery countries, these projects have mainly involved either water or food-related infrastructure, helping effectively grow, harvest, and process products, regardless of uncontrollable factors such as weather. As a result, countries that have received financing from the New Development Bank have experienced slight increases in economic growth due to stronger infrastructure and more efficient processes.

While the NDB has proved effective in helping developing countries that would otherwise be unable to receive financing from traditional financial institutions such as the IMF and World Bank, the changing economic landscape and ‘Industry 4.0’ have resulted in its agro-based lending mechanisms being insufficient in helping developing states keep pace with the global value chain. The technological revolution, characterized by increased automation and connectivity, as well as highly-skilled workers, puts developing countries with agricultural-based economies at an even larger disadvantage than their developed counterparts. Furthermore, the large territories and extensive rural or remote areas in many of the BRICS countries result in connectivity being an ongoing issue, hampering their entrance into the digital economy. While Russia and China experience this issue to a lesser extent than Brazil, India, and South Africa, cooperation, knowledge sharing, and greater funding measures are critical if the bloc intends to further the development of their respective rural, and often poverty-stricken areas. Without such increases in connectivity, the BRICS countries will be unable to remain competitive in the global market, increase demand, and enhance economic growth during the current economic slowdown, as they did in the years following the 2008 crisis.

 

In response to this need for adaptation, during the summit, the BRICS countries proposed the introduction of a common curriculum based on a foundation of future skills development. Highlighting the importance of developing human capacity through the provision of skills-based training, this foundational curriculum would include industry-specific subjects such as cybersecurity, artificial intelligence, reverse engineering, blockchain-based solutions, big data, and industrial design in order to prepare the working-age population, especially young people, for the new technology-based labor force. The intended consequence of this common curriculum throughout the BRICS is not only preparation for the labor markets within their respective borders, but also to allow members of the BRICS populations, industries, and sectors to regain access to the global economy in attempts to reinstate the BRICS as the economic and political disrupters they once were. While Industry 4.0 affects each region and sector in different ways, a country’s ability to adapt, develop, and integrate into global value chains or innovation systems, as well as develop social and political factors such as regulation, education, and accessibility to the labor market are strong indicators of how well a country and its industries will succeed in the current industrial wave. With the help of increased funding by the NDB, coupled with a strong commitment to adapting to the changing economic landscape, the BRICS countries remain capable of once again demonstrating their capacity for progress during periods of global economic uncertainty.

The Importance of Maintaining Relationships

While increased funding by the New Development Bank is one critical factor contributing to the future success of the BRICS grouping, the importance of maintaining relationships within the bloc cannot be overlooked. The BRICS currently represent close to a third of global output, with many of the countries serving as primary trading partners with each other for goods and services; however, recent developments in other regions such as Venezuela, Bolivia, the United States, and the Middle East threaten these political and economic ties as the countries have contrasting opinions regarding the unrest and/or violence experienced in each of these locations.

In particular, China’s trade war with the US, coupled with a rise in protectionism, threaten the relationship both within the bloc and between the bloc and other parties. Despite moving toward a Phase-1 trade agreement, hostilities between President Donald Trump and President Xi Jinping remain high with President Xi publicly stating that the ‘bullying’ tactics used by President Trump, President Bolsonaro, and others have eroded international trade and investment, and have contributed to the decline in international growth. While China remains Brazil’s largest trading partner with $98.7 billion in two-way trade throughout 2018 disagreements between China and Brazil in regard to President Trump and his unilateral sanctions threaten the strength of this relationship. Although the BRICS countries have publicly stated and re-affirmed their commitment to intra-group cooperation and multilateralism, international trade agreements are not free from the influence of emotion, and continue to be guided by national self-interest. If the BRICS bloc intends on maintaining its status as a political and economic powerhouse capable of challenging US-hegemony and progressing throughout another economic slowdown, it is imperative that the group’s leaders remain cognizant of the external forces that threaten the stability of the grouping and actively work towards maintaining strong relationships.

Looking Forward: Do the BRICS Have a Future?

For over a decade the BRICS have served as a stabilizer of international volatility, representing a new type of international relations, and while shared multilateral interests restrain behavior, and mutual intra-BRICS cooperation is a useful cementing factor, the geographical, political, and economic diversity of the BRICS sets limits on its cohesion, posing the question: Does the BRICS have a viable future? To this question, the answer is a qualified ‘yes.’ The BRICS bloc may no longer be the global sensation it once was, however, the geopolitical importance of the group is still undeniable, as it retains a high degree of credibility as a ‘middle power,’ bridging the gap between the developed and developing worlds and serving as a system of checks and balances for Western powers and their institutions.

Comprised of five of the world’s largest economies, populations, and territories, with an average growth rate of 8 percent compared the rest of the world’s average of 1 percent over the last decade, it is simplistic to disregard this grouping entirely, however it is also not incorrect to question its path. On the one hand, although a commitment to an equitable multipolar world order, strengthening multilateralism, respecting sovereignty, and non-intervention in internal state affairs are staple BRICS tenets, the interpretation of these pillars depends on each country’s national interest in specific circumstances, resulting in diverging opinions on key issues, as exemplified by tensions surrounding Venezuela, Bolivia, the US, and the Middle East. On the other hand, all five countries maintain a strong national self-interest to stay in the group, and in turn, are unlikely to cease their promotion of the BRICS as an economic and political force on the international stage. Due to their failure to materialize into predicted superpowers, Brazil and South Africa benefit from participation in the group, as it serves as a vehicle for these two countries to maintain geopolitical influence. For India, the grouping continues to serve as a method for the country to promote multilateralism and provides a space for the ‘world’s largest democracy’ to have a voice on the international stage. China and Russia on the other hand, despite their economic strength and influence as individual states, continue to benefit from this grouping insofar as they use the other members as part of a greater strategy to avoid push-back and opposition to any perceived Russia-China alliance against the West.

The precise future of the BRICS grouping, like many things in the current political and economic climates, remains uncertain, however key indices such as the motivation to expand the New Development Bank, the reparation of intra-BRICS relationships, and the national self-interests to remain in the grouping serve as strong evidence to advocate the bloc is not as irrelevant as some critics believe. While points of divergence persist and continue to threaten the strength and stability of the group, the BRICS countries remain committed to multilateralism, to maintaining peace and security, and advancing sustainable development in order to create a diverse and multipolar world order.