The leaders of Brazil, Russia, India, China, and South Africa (BRICS) are gathering in the Russian city of Ufa for their seventh annual summit. The bloc is expected to usher in a pair of institutions, a development bank and a currency reserve fund, that they hope will diminish Western control of the global financial system. Stewart M. Patrick, director of CFR’s International Institutions and Global Governance Program, offers three things to know about the BRICS.
Diverse but Cooperative: The BRICS countries vary tremendously in terms of their political systems and economic strength. Brazil, India, and South Africa are liberal democracies, while China and Russia are authoritarian, explains Patrick. And China’s GDP is larger than that of the four other countries combined. However, “for all their differences, the BRICS find common ground in the principles of sovereignty and nonintervention,” he says.
Financial Alternatives: Developing countries remain underrepresented at the Bretton Woods institutions (the World Bank and the International Monetary Fund, or IMF), and so the BRICS are launching their own financial organizations, says Patrick. The BRICS will seek to use their New Development Bank, funded at $50 billion, and a Contingency Reserve Arrangement, funded at $100 billion, to finance projects throughout the developing world. “New BRICS organizations offer an attractive alternative to U.S.-led institutions,” says Patrick.
Inclusive Multilateralism; The BRICS are central members of multilateral arrangements, like the G20 and the Nuclear Security Summit process, that offer emerging economies a seat at the table. Like the BRICS, other rising powers such as Indonesia, Mexico, South Korea, and Turkey are eager to play a more prominent role in global governance, says Patrick.