BRICS as a Rising Power in the Global Economy | Capacity, Challenges, and Future Prospects

Introduction: The Emergence of a New Pole in the Global Economy

The BRICS global economy is increasingly becoming a central topic in discussions about the transition from a unipolar to a multipolar world order.

Over the past two decades, the global economy has been shifting from a unipolar structure toward a more decentralized, multipolar system. Emerging blocs—particularly in Asia, Africa, and Latin America—are redefining the balance of economic power, and BRICS stands at the center of this transformation. Many analysts believe that this coalition has the potential to reshape global economic weight, influence financial systems, and gradually reduce the dominance of the U.S. dollar. Others argue that despite its impressive capacities, BRICS faces internal structural barriers, geopolitical tensions, and institutional limitations that may prevent it from becoming a fully cohesive economic bloc.

The central question remains:
Will BRICS become a defining power in the global economy, or will it remain a loosely coordinated coalition without deep integration?

In this comprehensive analysis, we examine the following dimensions:

• The historical evolution and foundational philosophy of BRICS
• Economic, demographic, and energy capacities of the bloc
• Geopolitical implications for the U.S. and Europe
• The expansion phase: BRICS 2.0 and the “BRICS+” concept
• Feasibility of a common BRICS currency or independent payment networks
• Structural and political challenges within the group
• The pivotal—yet controversial—role of China
• Impacts on global markets, energy systems, and foreign exchange
• Realistic scenarios for the future of BRICS

This article is not a promotional narrative; it is an evidence-based economic and geopolitical analysis grounded in data, historical patterns, and institutional research.

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History and Formation of BRICS: From an Analytical Concept to a Geopolitical Bloc

Understanding the BRICS global economy requires evaluating its demographic scale, resource dominance, and accelerating growth momentum.

The Origin of the Idea: Jim O’Neill and Emerging Market Models

The term BRIC was first introduced in 2001 by Jim O’Neill, an economist at Goldman Sachs. He argued that four emerging economies—China, India, Russia, and Brazil—possessed the demographic scale, growth potential, and resource base to become leading global economies by 2050.

Initially, the term was merely an analytical classification, not a geopolitical proposal.
Yet the global impact of the report led these countries to recognize their shared long-term potential.

From Concept to Political Cooperation

In 2006, foreign ministers of the four countries held their first joint meeting at the UN General Assembly.
The process quickly evolved into formal cooperation, culminating in the first BRIC Summit in Moscow in 2009.

In 2010, South Africa joined, and BRIC officially became BRICS.
This expansion strengthened the “Global South” identity of the group.

The Foundational Philosophy: Three Strategic Pillars

BRICS was formed to address key structural imbalances in the global economic order:

1. Balancing Western economic dominance

The members sought to diversify global value chains and reduce systemic dependence on the U.S. dollar.

2. Promoting a multipolar global economy

BRICS champions a world where economic decisions are distributed among multiple centers of power.

3. Strengthening South–South cooperation

Enhancing trade, investment, technology transfer, and infrastructure development among emerging economies.

In short, BRICS evolved from an analytical category into a geopolitical project.

Economic Weight of BRICS: Power in Numbers

Population: The Largest Demographic Sphere

BRICS nations collectively represent 3.6 billion people, nearly 40% of the world’s population.

This demographic scale brings:

• A massive consumer market
• An abundant labor force
• Strong FDI potential
• Long-term economic growth momentum

A structural advantage G7 cannot match.

GDP: A Historic Overtaking of G7

According to 2024 data:

• BRICS share of global GDP: 32%

• G7 share: roughly 30%

For the first time in history, an emerging bloc has overtaken G7 in global output share.

Energy: The Strategic Core of BRICS

In the expanded BRICS (2024):

• Russia: major gas producer
• Saudi Arabia & UAE: key oil exporters
• Iran: major player in oil, gas, and petrochemicals

Combined control:

• 45% of global oil production
• 60% of global gas reserves
• 40% of global energy consumption

This makes BRICS a strategic energy superpower.

Growth Engines: China and India

BRICS’ strength is not only volume—it is growth dynamics.

• China remains the center of global manufacturing

• India is projected to become the world’s third-largest economy by 2035

These two economies drive the bloc’s long-term competitiveness.

Why BRICS Matters to the West: U.S. and European Concerns

Initially viewed as a symbolic coalition, BRICS has become a strategic concern for Western powers. Three key areas explain this shift:

Dollar Dominance Under Threat

For nearly 80 years, the U.S. dollar has served as the backbone of global finance:

• 60% of global foreign reserves
• 88% of FX transactions
• 79% of global trade invoicing
• Dominance in pricing key commodities

BRICS is the first formal bloc advocating a systematic reduction of dollar dependency—a direct challenge to U.S. financial influence.

Energy Realignment: Pressure on the Petrodollar System

Most global oil transactions are denominated in USD—a major pillar of dollar supremacy.

However, with BRICS expansion adding Saudi Arabia, UAE, Iran, and Russia:
The possibility of non-dollar oil settlements becomes significant.

A shift of even 10% away from USD-based oil trade could have major financial repercussions.

Creation of Parallel Financial Institutions

BRICS has developed alternative systems:

• New Development Bank (NDB) → Infrastructure financing independent of the World Bank
• CIPS and Russian payment networks → Partial alternatives to SWIFT
• Discussions for a BRICS payment platform

These steps strengthen financial autonomy from Western institutions.

Geopolitical Realignment

BRICS aligns with non-Western blocs such as:

• The Shanghai Cooperation Organization
• African Union
• Eurasian alliances

This widens the geopolitical footprint of BRICS beyond economics.

BRICS Expansion: BRICS 2.0 and the BRICS+ Vision

A New Wave of Membership

In 2024, the following nations were formally invited to join:

• Iran
• Saudi Arabia
• United Arab Emirates
• Egypt
• Ethiopia

This expansion transforms BRICS from a regional coalition into a global network.

The BRICS+ Model: Toward a Wider Global Alliance

Countries that have shown interest include:

• Argentina
• Nigeria
• Kazakhstan
• Vietnam
• Turkey
• Indonesia
• Thailand

Their potential membership would amplify BRICS influence in energy, industry, and global consumption markets.

Can BRICS Reshape the Global Financial Order?

This question is central to ongoing geopolitical debates.

Depth of Dollar Dominance

Data from the IMF and the BIS show:

• 60% of reserves
• 88% of FX trades
• 79% of global commodity invoicing

The dollar is not simply a currency—it is a global financial infrastructure.

Changing such a system requires structural, not symbolic, shifts.

Is This Structure Changeable?

Yes—but only gradually.

BRICS can weaken dollar dominance if:

• Regional trade uses local currencies

• Central banks diversify reserves

• Energy trade shifts to multicurrency pricing

• Payment systems outside SWIFT expand

This transition requires 15–20 years under realistic scenarios.

National Currencies in BRICS: The Practical Path Forward

Why a Common BRICS Currency Is Unrealistic (For Now)

A unified currency demands:

• A central bank
• Unified monetary policy
• Coordinated inflation targets
• Political integration

BRICS members differ widely:

• China → State-managed market economy
• India → Democratic, diverse, decentralized
• Russia → Energy-driven economy
• Iran & Egypt → Sanctioned and structurally constrained
• Brazil → Commodity-based development model

This heterogeneity makes a shared currency impractical.

What Is Achievable?

Growing use of local currencies in trade:

• 60% of China–Russia trade is now conducted in yuan
• India settles oil deals with UAE and Saudi Arabia in rupees
• UAE executed its first yuan-denominated oil contract
• Iran increasingly uses alternative currencies

This “multicurrency trade system” is the real challenge to dollar dominance.

China’s Role in BRICS: Foundation or Fragile Point?

China accounts for over 70% of BRICS GDP, making it indispensable.

But this dominance also causes internal friction:

• India fears Chinese strategic influence
• Russia is becoming heavily yuan-dependent due to sanctions
• Smaller members worry about marginalization

China strengthens BRICS’ global weight, yet simultaneously risks creating asymmetry that weakens cohesion.

Energy Power of BRICS: A Strategic Global Lever

Energy is BRICS’ strongest asset.

A bloc controlling:

• 45% of oil production
• 60% of gas reserves
• 40% of global consumption

…holds structural leverage over global pricing and supply chains.

Talk of an “OPEC of BRICS” has emerged among analysts, though political tensions—especially Iran–Saudi and China–India—make coordination difficult.

Structural Challenges: Why BRICS Cannot Yet Rival the EU or G7

Major internal barriers include:

• Political rivalries (China–India, Iran–Saudi, Russia–India)
• Economic heterogeneity
• Lack of shared regulatory frameworks
• Heavy dependence on the U.S. dollar

These constraints limit BRICS’ ability to operate as a unified bloc.

Economic Cold War: BRICS vs. G7

The global landscape is moving toward economic bipolarity:

G7 advantages:

• Technological leadership
• Strong institutions
• Rule-based financial systems
• High trust in USD/EUR

BRICS advantages:

• Massive demographics
• Energy dominance
• Rising middle-class markets
• Rapid economic growth

G7 remains the core of the advanced economy, while BRICS serves as the engine of the emerging world.

Conclusion: A Rising Power, but Not Yet a Cohesive Bloc

BRICS has undeniable strengths:

• Population
• Resources
• Growth momentum
• Expanding geopolitical influence

Yet fundamental limitations persist:

• Deep political divides
• Economic asymmetry
• Lack of unified monetary structures
• Continued reliance on USD
• China–India competition

Therefore:

BRICS is a rising force—but still navigating a transitional phase.
Challenging the dollar is possible, but not without structural transformation and long-term political cohesion.