The BRICS group, comprising Brazil, Russia, India, China, and South Africa, has stirred considerable debate regarding its potential to challenge the dominance of the U.S. dollar. However, this notion has been regarded as a fanciful aspiration rather than a pragmatic likelihood. This skepticism arises primarily from the internal divisions among its leading members, particularly China and India, which complicate any efforts toward unified economic cooperation.
The BRICS group was initially conceptualized through the foresight of Jim O’Neill, former chief economist at Goldman Sachs. In the early 2000s, he introduced the BRIC acronym that recognized the burgeoning economic potential of these four nations, with the hope that they would play a pivotal role in global governance. Over the years, this group expanded to include South Africa, and more recently, other states such as Egypt, Ethiopia, Iran, and the United Arab Emirates have expressed interest in joining. Collectively, these nations account for approximately 45% of the world’s population and 35% of its economic output, significantly influenced by China’s overwhelming economic strength within the bloc.
Nevertheless, O’Neill has criticized the group’s effectiveness, stating that the BRICS have achieved little substantive progress over the last 15 years. He believes that the gathering serves more as a symbolic gesture than a functional economic alliance. While the member countries meet annually to discuss issues of mutual interest, they have not managed to form a cohesive strategy to significantly alter the global economic landscape or their relationships with Western powers.
The internal divisions, particularly between China and India, hinder the group’s potential for economic cooperation. India’s attempts to limit Chinese investments in its market since a border clash in 2020 exemplify the tensions that permeate their relationship. Despite their mutual recognition of the need to enhance cooperation, the nature of their historical disputes weighs heavily on the prospects for meaningful collaboration. Without a genuine effort to resolve their differences, the potential for the BRICS to act as a counterbalance to the U.S. dollar remains doubtful.
Moreover, Russian President Vladimir Putin has made attempts to use the BRICS summit as a platform to showcase Russia’s burgeoning ties with Asian powers in light of its isolation from the West due to the Ukraine conflict. This strategy, however, faces challenges, as O’Neill rightly notes that any move to establish an alternative currency or payment system would still require cooperation among the BRICS members—a goal that seems far from reach, given their varying national interests.
Russia’s ambition to create an alternative payment mechanism for BRICS members to bypass Western sanctions is another area of contention. O’Neill has pointed out that discussions about alternatives to the U.S. dollar have been ongoing since he began his career in finance. Yet, no viable alternative has emerged from the BRICS countries, primarily due to their reliance on China’s economic might. O’Neill argues that a BRICS currency could exasperate existing dependencies, with China playing a dominating role while minimizing the contributions from Russia and Brazil.
He also emphasizes the fundamental need for these economies to engage in more tariff-reduced trade. The absence of a solid framework for inter-member trading hampers the BRICS’ ability to present itself as a formidable alternative to Western economic governance. The momentous hurdles in striking agreements—while competing against each other—must be navigated if the bloc intends to solidify its influence worldwide.
The challenges posed by BRICS in terms of global governance should not be underestimated. O’Neill suggests that the G20 has not evolved into an effective platform for international collaboration, largely due to both the U.S. and China’s inward-focused policies over the past decade. This situation underscores the reality that to tackle many pressing global issues, collaboration among these nations is essential. For instance, they could significantly contribute to combating climate change or enhancing healthcare through research and vaccine development.
While the BRICS group presents itself as a coalition of formidable emerging economies, it faces significant obstacles in transforming into a coherent and impactful global bloc. Questions surrounding the feasibility of an alternative currency and the internal rivalry primarily between China and India cast long shadows over its potential. Until substantial diplomatic strides are made among its leading members, BRICS may remain more of a symbolic gathering than a functional challenger to Western economic supremacy. The root of its future viability lies in the ability of these nations to transcend their historical rivalries and confront contemporary global issues with a unified voice.