BRICS is an alliance of five major emerging economies: Brazil, Russia, India, China, and South Africa. Formed with the goal of creating a platform for economic cooperation and growth among developing countries, BRICS promotes a multipolar world order where global decisions are made through dialogue and inclusivity. Here’s how BRICS functions and the mechanisms it uses to advance economic cooperation among its member states.
1. Economic Collaboration and Trade
- Trade Agreements: BRICS members work on trade agreements that remove barriers to trade between them, making it easier and less costly to exchange goods and services. This includes reducing tariffs and creating favorable customs procedures.
- Market Access: By prioritizing access to each other’s markets, BRICS aims to boost the internal trade volume and reduce reliance on Western markets. This helps their economies grow through increased exports and imports.
2. Developmental Finance through the New Development Bank (NDB)
- Project Funding: The New Development Bank, established by BRICS, provides loans to member countries for infrastructure projects and sustainable development. These projects include roads, power plants, and environmental initiatives.
- Reduced Dependence on Western Financial Institutions: By funding their own projects, BRICS countries reduce reliance on Western banks and international organizations, which sometimes come with conditions. This promotes financial independence among member states.
3. Technological Cooperation and Innovation
- Digital Economy Collaboration: BRICS countries work together to advance digital economies through initiatives in e-commerce, technology startups, and innovation in information and communication technology (ICT).
- Research Partnerships: Member nations collaborate on joint research in fields like energy, medicine, space exploration, and environmental science, aiming to solve common problems through collective knowledge.
4. Political Dialogue and Diplomatic Support
- Unified Global Presence: BRICS represents nearly 40% of the global population and over a quarter of the world's GDP. Their collective voice provides a counterbalance to traditional Western influence in global politics.
- Support in International Disputes: The BRICS countries often support each other diplomatically in international forums, advocating for fair policies and balanced geopolitical influence.
5. Currency and Payment System Cooperation
- Alternative Payment Systems: Some BRICS members are exploring alternatives to SWIFT, the international payments system, to ensure secure and independent financial transactions. This would help shield their economies from sanctions and facilitate easier trade among them.
- Local Currency Trade Agreements: BRICS nations are looking to trade in their local currencies instead of the U.S. dollar, reducing currency exchange costs and stabilizing their economies.
