Ayanangsha Maitra, COGGS
The 16th BRICS summit in Kazan, Russia, on October 22-23 is expected to be a landmark summit, teeming with expectations for innovative announcements and remarkable changes in geopolitics and geo-economics. There will be talks beyond currency mechanism. As the group expands into BRICS+, the significance of the bloc continues to rise. The bloc has welcomed five new members: Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates. This expansion not only enriches the group’s diversity but also creates a powerhouse with a combined population of approximately 3.5 billion—about 45% of the world’s total. The collective economies of these member states now exceed $28.5 trillion, accounting for roughly 28% of the global economy. Remarkably, with the inclusion of Iran, Saudi Arabia, and the UAE, BRICS nations now command an impressive 44% of global crude oil production, making BRICS a formidable force in both geopolitical and economic arenas.
Why is BRICS getting popular?
Several Global South nations feel marginalized by the current world order, which they believe disproportionately favors a handful of wealthy Western countries. Accusations of hypocrisy against the U.S. regarding its selective application of international law—especially in conflicts like those in Ukraine and Gaza—underscore the need for a more equitable global framework. Consequently, BRICS, which promises a fairer international system and proper representation of developing nations’ interests and aspirations, is emerging as a viable alternative to Western-led mechanisms.
However, Jim O’Neill, who coined the term BRIC and is a noted commentator on the bloc, argues that “BRICS has done nothing to effect meaningful organizational or structural change within international institutions.”
Despite Western efforts to isolate Russia following its military actions in Ukraine, Moscow continues to find solidarity among middle powers and Global South nations. This perception is immensely significant for BRICS+, which seeks to challenge the privileges enjoyed by Western nations, primarily through the creation of alternative and parallel institutions. The 16th BRICS summit could mark a pivotal moment for BRICS+, aiming to provide a platform for emerging and middle powers to advance their often overlapping interests while subtly reshaping the global multilateral system.
BRICS+ nations are increasingly driven to gain greater independence from the Western-dominated international monetary system. Presently, approximately 90% of global foreign exchange transactions are conducted in US dollars, and most of them processed through banks in the U.S. and Europe.
Will BRICS+ Appeal to Corporations?
BRICS+ is expected to deliver what the original BRICS could not. Some major corporations, not only from Russia and China but also from Southeast Asia and Africa, are likely to support BRICS+ for a variety of compelling reasons.
First, BRICS+ offers a platform for emerging markets to align on key global issues, creating opportunities for corporations to tap into burgeoning markets across continents. To establish an effective and smooth supply chain and trade network, BRICS nations—Brazil, Russia, India, China, and South Africa—must leverage their unique strengths, which will attract more multinational corporations for economic integration. This would involve setting up a comprehensive framework for trade facilitation, including streamlined customs procedures, reduced tariffs, and standardized regulations. There must also be a serious and continuous focus on enhancing infrastructure connectivity, such as transportation and logistics networks, which are crucial for reducing transit times and costs.
With India and China, two tech giants, on board, BRICS needs to deliver technology-driven solutions, such as digital platforms for trade and supply chain management. Collaboration in sectors like agriculture, renewable energy, and manufacturing among BRICS members is essential, especially given the vast FMCG market in the Global South that presents opportunities for MNCs from BRICS+ nations.
As BRICS+ continues to evolve—establishing political and financial institutions along with a payment mechanism for transactions—it could significantly influence several markets and marketers. The implications for energy trade, international finance, global supply chains, monetary policy, and technological research are substantial. Corporations from BRICS+ nations can position themselves at the forefront of these developments, enhancing their competitive edge in a well-networked market.
The expansion of BRICS or formation of BRICS+ represents a strategic initiative to unite a diverse array of developing countries. At the same time, it has the capability to address the concerns of Global South nations. If BRICS+ maintains its commitment and delivers tangible outcomes, it could dictate several rules of the game. To achieve this, BRICS+ must address economic growth, climate change, resource equity, and the pressing issues affecting its population.
