Indonesia Becomes Full Member of BRICS

Syllabus: GS2/ International Organisation

In News

• Indonesia has officially joined BRICS as the 11th member effective from January 2025.
  • The inclusion of Indonesia marks another step in expanding BRICS’ influence among emerging economies.

About BRICS

• Definition: BRICS is an intergovernmental informal grouping of emerging economies aimed at fostering cooperation and enhancing their global influence.
• Members: Brazil, Russia, India, China (these are founding members); South Africa joined in 2010; Iran, UAE, Egypt, Ethiopia, Saudi Arabia joined in 2024.
  • Argentina was initially expected to join in 2024 but later opted out.
• Background: The first BRIC Summit was held in Russia in 2009.

Significance of BRICS

• Economic Influence: Represents a large share of the global economy:
  • Accounts for approximately 35% of global GDP.
  • Comprises 46% of the world’s population, providing a vast market and workforce.
  • Encourages trade and investment among emerging economies.
• Counterbalance to Western Dominance: Provides a platform for emerging economies to challenge the G7 and other Western-led financial systems.
  • Promotes a multipolar global order, reducing reliance on dominant powers like the US and Europe.
  • Focus on Local Currencies and Non-Dollar Transactions: Aims to reduce dependence on the US dollar in international trade and finance.
  • Strengthens local currencies, reshaping global trade practices and reducing vulnerabilities to dollar-based systems.
• Advocacy for Global Institutional Reforms: Pushes for greater equity and inclusivity in global institutions like the IMF and UN.
  • Addresses the need for a more balanced representation of developing nations in global decision-making.
• Collaboration Among Emerging Economies: Encourages cooperation in areas like technology, sustainable development, and infrastructure.
  • Facilitates knowledge sharing and joint efforts to tackle global challenges like climate change and public health crises.
• Energy and Resource Security: Many BRICS members are major producers or consumers of energy resources, allowing for strategic partnerships in energy security and sustainability.
• Support for Multilateralism: Strengthens multilateral institutions by emphasizing collective problem-solving over unilateral approaches.

Challenges Faced by BRICS

• Diverse Economic Interests: BRICS consists of countries with vastly different economies, ranging from advanced economies like China and India to resource-rich nations like Brazil and Russia.
  • These differences often lead to conflicting priorities on issues like trade policies, economic reforms, and foreign investments, which can complicate consensus-building within the group.
• Political Differences: While the members of BRICS share common goals, their political ideologies and alliances vary widely.
  • Tensions between member states (e.g., China and India over border disputes, Russia’s geopolitical tensions with Western countries) can hinder the group’s ability to present a unified stance on global issues.
• Geopolitical Rivalries: The geopolitical conflicts between China and India, and between Russia and Western nations, create challenges in BRICS working cohesively.
  • Competing alliances with countries outside BRICS, such as India’s ties with the US and Russia’s isolation from the West, may impact the group’s collective influence.
• Economic Dependence on Global Markets: Many BRICS countries are still heavily dependent on global trade networks dominated by Western economies, which can limit their ability to shift entirely away from the US dollar or create an independent financial infrastructure.

Source: IE