BRICS+, an intergovernmental organization originally comprised of Brazil, Russia, India, China, and South Africa, recently expanded its membership to include Iran, Egypt, Ethiopia, and the United Arab Emirates. The expansion, finalized at the 16th BRICS Summit held in Kazan, Russia, from October 22 to 24, 2024, marks a historic moment in international relations and economics. BRICS+ now represents about 47 percent of the world’s population and accounts for 36 percent of global GDP. The bloc’s combined GDP is expected to reach $65 trillion, significantly increasing its economic clout on the world stage. The bloc is positioning itself as a geopolitical rival to the G7, which represents about 29 percent of global GDP and a much smaller portion of the world’s population, about 10 percent. The emergence of BRICS+ signals the rise of new technological and financial alternatives, redefining the global order. More than 40 countries, including Turkey and Indonesia, have expressed interest in joining, underscoring its
appeal as an alternative to Western-dominated institutions.
History of BRICS
BRICS originated as an economic concept coined by Goldman Sachs economist Jim O’Neill in 2001, referring to emerging markets with significant growth potential. In 2009, these nations formalized their cooperation with the aim of addressing global challenges and reforming international financial institutions. The inclusion of South Africa in 2010 expanded the group into BRICS, and the addition of new members in 2024 under BRICS+ reflects the bloc’s ambition to foster a more equitable and multipolar world order.
BRICS+: A platform for multipolarity
BRICS+ is not just an economic bloc; it is a vehicle for geopolitical cooperation among emerging powers. By challenging Western-led institutions, BRICS+ seeks to establish a multipolar world order that recognizes the growing importance of the Global South. Initiatives such as the New Development Bank (NDB) and BRICS Pay provide member countries with alternatives to US-dominated financial
systems, allowing for greater autonomy and reducing reliance on Western financial mechanisms. Historically, global politics and economics have been dominated by the United States and its Western allies. However, the rise of BRICS+ signals a shift toward a multipolar world where no single power dictates the global agenda. The bloc’s emphasis on sovereignty, mutual respect, and non-interference challenges the colonial mentality that has characterized Western powers for centuries.
New BRICS Development Bank: A Strategic Alternative to the IMF and the World Bank
The New Development Bank (NDB), established by the BRICS in 2014, offers a compelling alternative to the Western-dominated IMF and World Bank. Focused primarily on infrastructure development and sustainability in emerging markets, the NDB offers financing options free of the political strings often attached to loans from Western financial institutions.
The initial authorized capital of the NDB is $100 billion, divided into 1 million shares, each with a
par value of $100,000. Of this, the initial subscribed capital is $50 billion, divided into $10 billion of fully paid-up shares and $40 billion of callable shares. The subscribed capital has been distributed equally among the five founding members-Brazil, Russia, India, China and South Africa-ensuring balanced ownership and representation.
A distinctive feature of the NDB is its governance structure, which promotes equality among its members. Each member state has one vote and, importantly, no member has the right of veto. This governance model underscores the bank’s commitment to fostering a more inclusive and cooperative international financial system, where all members have an equal voice and decision-making power, in contrast to the unequal power dynamics often observed in traditional financial institutions such as the IMF and the World Bank.
BRICS Pay and DCMS: The Future of Financial Independence
BRICS Pay is a decentralized cross-border payment system being developed by BRICS countries, aimed at fac
ilitating international transactions in local currencies and reducing reliance on the US dollar. It serves as an alternative to SWIFT (Society for International Financial Telecommunications).
SWIFT, established in 1973, is a global financial messaging system that connects more than 11,000 financial institutions in over 200 countries, facilitating secure communication for international transactions. Each institution is assigned a unique SWIFT code or BIC (Bank Identifier Code) to standardize and secure transaction messages. Although SWIFT does not directly handle funds, it enables nearly half of all high-value cross-border payments worldwide.
Headquartered in Belgium, SWIFT operates under Belgian law and is subject to some regulatory oversight by the European Union. However, because many SWIFT transactions are conducted in US dollars, the United States has significant influence over SWIFT policies, including sanctions and financial controls. This influence allows the United States to use SWIFT as a tool of g
eopolitical strategy by pressuring the network to disconnect certain countries that conflict with its foreign policy, effectively isolating them financially. For example, Iran was cut off from SWIFT in 2012 due to its nuclear program, and several Russian banks faced disconnection in 2022 following the conflict in Ukraine. The strategic use of SWIFT as a geopolitical tool underscores the dominance of Western powers over the global financial system, with serious consequences for countries that are excluded, as they lose access to international markets and banking services.
BRICS Pay, introduced in 2018 by the BRICS Business Council, works similarly to China’s Cross-border Interbank Payment System (CIPS) and India’s Unified Payments Interface (UPI).
At the heart of BRICS Pay is the Cross-Border Decentralized Message System (DCMS), developed by Saint Petersburg State University. The DCMS is designed to operate without a central hub, with participants running their own nodes, making it resistant to external cont
rol or interference. The system allows for optional transaction fees, automatic transaction routing, and strong encryption, ensuring secure and efficient communication even in the absence of direct links. With the capacity to process up to 20,000 messages per second and minimal hardware requirements, the DCMS is a powerful tool for improving international financial cooperation. The DCMS is expected to be open source after passing its pilot phase, providing transparency and adaptability for future innovations.
of US-led Western hegemonyThe dominance of the West, particularly the United States, has been maintained through control of global financial institutions, economic coercion, and military interventions. BRICS+ challenges this hegemony by advocating for institutional reforms and offering regional solutions that respect the sovereignty of member states. The bloc emphasizes cooperation, mutual respect, and development, empowering countries that were previously marginalized on the global stage.
The West ha
s also used its financial and political dominance to impose unilateral sanctions on perceived adversaries. However, BRICS+ and its development of alternative financial systems, such as BRICS Pay and the NDB, threaten to weaken these sanctions. BRICS+ countries can now trade and transact without relying on the US-dominated financial infrastructure, bypassing the sanctions associated with the dollar-based global economy.
De-dollarization and its impact on the American empire
The de-dollarization process driven by BRICS+ will have profound economic consequences for the United States. Demand for the U.S. dollar has long allowed the United States to run large deficits while maintaining low inflation. As more countries adopt alternatives to the dollar, the United States could lose its power over global finance, leading to a decline in U.S. geopolitical influence.
Towards a new world order
The rise of BRICS+ and its commitment to creating a multipolar world order poses a substantial challenge to Western dominanc
e. The expansion of BRICS+ and the development of financial and technological alternatives, such as the NDB and BRICS Pay, signal a shift toward more equitable global governance. As the world moves toward a multipolar future, the power and influence of BRICS+ could redefine global dynamics, offering new opportunities for cooperation and development for traditionally marginalized countries.
*Fasil, MBA from ARU Cambridge, is a versatile professional, co-founder of Digisuite Solutions LLC and management consultant at Pangeacons Ltd, also author of the guide ‘THE HANDBOOK FOR BUSINESS MANAGEMENT AND ADMINISTRATION’.
Source: Africa News Agency