“The role of BRICS in the world economy will only increase.” 
— Russian President Vladimir Putin at the 2024 BRICS Summit in Kazan

From 22 to 24 Oct  2024, the countries upholding 37.4 percent of the Global GDP, a quarter of global exports of goods, and 45 percent of the worldwide population, met in Kazan, Russia for the BRICS Summit. It was not a mere meeting, but a Summit of countries ready to take up the global economic leadership and reshape the Polycentric world order. During the Summit, major global contemporary issues were part of the discussion from the global economy, the Russia-Ukraine War, the Middle East Conflict, Global Climate Change, Sanctions, and the International Financial System’s reforms to global food security. The Summit was attended by UN Secretary General, Antonio Guterres despite criticism from the Kyiv administration.

It was the 16th official BRICS Summit with Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates attended for the first time as official members. During the Summit, Russian President Vladimir Putin insisted on how fast the growth of the BRICS economy compares to G7 and what impacts the BRICS economy will have on sustainable global development. In another way, President Putin was declaring the BRICS economic victory over G7.

What Opportunities do BRICS have to Reshape the World Order?

The New Development Bank (NDB)

“Over more than three decades since the collapse of the bipolar system, it has become increasingly clear that from the perspective of Western powers, peace, democracy, prosperity, and development can only be achieved through pathways defined by them”. Iranian President Masoud Pezeshkian during the 2024 BRICS Summit.

Since its establishment, the NDB has provided funds to projects worth USD 35 billion in prioritized sectors of Infrastructure, Energy, Environment, Water and Sanitation within BRICS+ member states countries and Bangladesh. These projects have been supported through loans and equity investments both in the Public and Private sectors. The equal vote and the equal share distribution have been signified as a symbol of equality and mutual respect between member states. Both founding members hold 18.98 percent of the subscribed capital, while Bangladesh holds 1.79, Egypt 2.27 and UAE, 1.06 percent respectively.

In August 2023, Uruguay joined the NDB, a year later on September 2024, Algeria, Africa’s leading exporter of natural gas also became a member.

Reflecting its fundamental principles of Non-interference in internal politics compared to WB and IMF, which have been highly criticized as U.S tools in cementing the Western agendas; NDB is now regarded as a substitute for the Bretton Woods institutes in the global south hemisphere. As how the non-interference policy led to China’s penetration in Africa, Latin America, and Asia countries, the NDB has high odds of succeeding too.

Challenges face by the NDB

Investments

The key challenge facing the NDB is the low number of completed projects. From 2016 to 2024 only 17 projects among 138 were reported completed. For instance, India had 4 completed projects out of 34 and no completed project had been reported since 2020. Meanwhile, India plans to become a developed nation by 2047 through mega investment from infrastructure to sectors stimulating economic growth, so for India to become one, NDB has to fully function and play a major role and make India a showcase for NDB achievement through investments. The BRICS+ countries have to set an example through NDB’s remarkable performance.

During its establishment, the founding members made an initial subscription of five hundred thousand shares that sum up to 50 USD billion, which included one hundred thousand shares corresponding to a paid-in capital of 10 USD billion and four hundred thousand shares corresponding to a callable of 40 USD billion. In anyhow, it can be concluded that the NDBs’ members have neither again added up their shares nor have added up a little share to indicate on and hence leads to few projects implemented.

Among the five most indebted countries by the World Bank, three are members of NDB that’s India, Bangladesh, and China, while Brazil is the sixth.

The BRICS Currency

“We welcome efforts to increase financial integration among BRICS countries. Trade in local currency and smooth cross-border payments will strengthen our economic cooperation”. Indian Prime Minister, Narendra Modi during the 16th BRICS Summit in Kazan, Russia.

The BRICS+ member states contribute to 40 percent of global oil production while Russia leads as the largest oil reservoir with Saudi Arabia as the second. The block contributes to 38.3 percent of the global industrial production, and 40 percent of the global infrastructure investment and accounts for two-fifths of global trade in goods. It also accounts for half of global food production and possesses 53 percent of natural gas reserves and 40 percent of coal reserves. During the 16th Summit, it was reported that 34 countries had shown interest in joining BRICS+.

BRICS+ is now becoming the global powerhouse block overtaking G7 under the U.S.

What is the stumbling block for that? The Financial System. During the summit; Russian President, Vladimir Putin condemned the U.S. by using the dollar as a weapon and insisted on BRICS+ to launch its own currency. Putin’s claims come after the U.S. imposed financial sanctions against Moscow by removing major Russian banks from SWIFT. This prevented Russian banks from accessing international markets.

Launching the currency is one thing, the major one is how to keep the currency sustainable and competitive with the dollar. For the BRICS+ currency to be sustainable, it has to emphasize the intra-BRICS trade relation which as of now stands at 56 percent. With the global potential resource, the BRICS+ possesses, it won’t be a big challenge to influence trade via its currency.

The U. S has been accused on many occasions on imposing trade and financial sanctions to the governments that “doesn’t fit to its national interest”. Through the BRICS non-interference policy, it might magnetize countries imposed sanctions by the U.S. into the trade block and enlarge the intra-trade thus boosting the use of BRICS currency.

There is a bright future for BRICS+ and the global south. BRICS has to progress from admitting new members and holding conferences to emphasizing economic integration, trade, security, and technology. If treated equally, each country in the globe has something positive to offer. NDB has to magnify its sphere and create partnerships with regional banks such as the Africa Development Bank, the Inter-American Development Bank, and the Asia Development Bank to counter the World Bank’s influence.

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Ezra Nnko is a geopolitics and international policy expert based in Dar es Salaam, Tanzania. He works at Liberty Sparks, an independent think-tank based in Kenya, Tanzania, Uganda, and Malawi.

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