What are BRIC and BRICS?

What does BRIC mean?

BRIC is a mechanism for political-economic cooperation between Brazil, Russia, India and China. It is an acronym for the names of participating countries and was named for the first time in 2001 by financial consultancy Goldman Sachs. The term BRIC designated the group of emerging countries with the greatest growth potential at the time. In 2010 it was updated to BRICS, after the entry of South Africa (South Africa, in English).

The projection was that in the year 2050 these countries would surpass the current richest nations in the world, with India and China being the largest suppliers of labor in the world, and Russia and Brazil the largest exporters of raw materials. The purpose of the report that created the BRIC was to draw investors’ attention to such developing countries as promising markets. However, he ended up suggesting the organization of the mechanism with the objective of creating conditions for a new world economic order, reducing the dependence on the United States and the influence of the dollar on the markets.

Although they have held meetings since 2006, the BRIC countries do not form an economic bloc or political group. The meetings emerged as an opportunity for joint growth of these countries, based on the same agenda of interests. The first BRIC summit took place in 2009, in the Russian city of Yekaterinburg. It included Luiz Inácio Lula da Silva, President of Brazil, Dmitri A. Medvedev, of Russia, Hu Jintao, of China, and the Prime Minister of India, Manmohan Singh.

BRICS

BRICS is an acronym for Brazil, Russia, India, China and South Africa, and represents a mechanism for political and economic organization between these countries. They do not constitute an economic bloc or political group, such as the European Union, for example. But they are a formal organization and hold summit meetings annually, in addition to promoting mutual cooperation activities with the aim of strengthening their economies and distancing themselves from the dependence of the great powers.

The term was originally BRIC and meant the emerging economies of the world: Brazil, Russia, India and China. It was coined in 2001 by financial consultancy Goldman Sachs. But in 2010, South Africa (South Africa) was invited to take part, thus forming the BRICS.

Characteristics of BRICS

Since it is not a formal bloc or group, there is no list of prerequisites for a country to compose the BRICS. What there are are common characteristics among the states, which made South Africa later enter the mechanism by presenting them:

  • Developing country with recently stabilized economy
  • Interest of great powers in their markets
  • Economic growth potential
  • High productive levels
  • Increase in the volume of exports
  • Large reserve of natural resources
  • Supply and advancement in the qualification of labor
  • Infrastructure investment
  • Political stability
  • Reduction of social inequality, digital inclusion and active public policies

New Development Bank: Banco dos Brics

The main achievement of the first decade of the BRICS organization was the creation of its own development bank, the New Development Bank (NBD), an alternative to the World Bank. The BRICS financial entity has been operating since July 2015 with the objective of providing investment in development and infrastructure to emerging nations. Emerging countries not belonging to the BRICS can also join the bank.

Another economic solution found by the BRICS was the creation of the Reserve Contingent Arrangement (ACR), a US $ 100 billion emergency fund. The objective is similar to that of the IMF (International Monetary Fund), but with an offer only for emerging countries and different rules for the rescue of the fund.