Will BRICS Change World Trade?
What is BRICS?
BRICS is an international economic union of five major emerging economies, Brazil, Russia, India, China and South Africa. These countries, because they have similar economic potential, aim to come together to create a stronger voice in the global economy. These countries are considered important players because of their size, rapid development and strategic importance in the world economy. BRICS aims to play an influential role in international relations by collaborating in the fields of economic cooperation, political dialogue and development.
How was the historical development of BRICS?
The historical development of BRICS is based on a 2001 report by Goldman Sachs economist Jim O'Neill. O'Neill called these countries "BRIC", drawing attention to the growth potential of Brazil, Russia, India and China in the world economy. The famous economist predicted that the total GDP of these countries would surpass the G7 countries (US, Canada, Germany, UK, France, Italy and Japan) by 2050.
G7 COUNTRIES
The term BRIC accelerated discussions on the rising economic power and potential of these countries. These countries began to draw attention as major economies, traditionally outside the Western-based global economic order.
Later, with the inclusion of South Africa in 2010, BRIC became BRICS. During this period, BRICS emerged as a platform among countries that wanted to have more say in global economic governance. The BRICS began to hold summits and aimed to increase cooperation on economic, political and strategic issues.
Although BRICS is made up of countries that differ in themselves, it has come to the fore as a union that has something in common, for reasons such as their potential for economic growth and their desire to play a more effective role in the global economic order.
At the summit in Johannesburg in August 2023, it was decided that Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the UAE would join BRICS from 1 January 2024.
BRICS Countries
- Brazil, Russia, India, China (BRIC)
- Republic of South Africa (BRICS)
- Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, UAE (BRICS+)
Countries that explain their interest in BRICS (i.e., potential for membership): Afghanistan, Lebanon, Indonesia, Mexico, Turkey, Nigeria, Sudan, Syria, Bangladesh and Greece
Global Economy
BRICS Relationship with Turkey
Recently, there has been frequent emphasis on the benefit of Turkey's full membership in the BRICS group in business and political fields. Especially after the plane crisis between Turkey and Russia, relations became strained and then returned to normal, and Turkey-European Union relations, which cooled significantly after 2013, brought the issue of full membership to BRICS one step further. The then deputy prime minister, Mehmet Simsek, stated in 2017 that Turkey is seriously considering the possibility of full membership in order to benefit from the projects and funds offered by BRICS countries.
The Role and Importance of BRICS in the Global Economy:
- The share of BRICS countries within the total GDP and their contributions to the global economy: The table below shows the position of BRICS countries in the global economy. BRICS countries account for about 29% of the global GDP, with a total GDP of $30,767 billion in 2023. This ratio, G7 countriesWith a total GDP of $45.916 billion, it falls below the 43% share it receives from the global GDP. However, BRICS, along with new members, has increased its economic potential, especially by adding countries with natural resources, and is expected to close in the future.
BRICS countries GDP for 2023
- The role of BRICS in global trade and the competition of these countries with other major economic blocs: BRICS countries have a strategic position in global trade and make major contributions, especially in areas such as energy, minerals and agricultural products. This bloc competes with developed economies such as the United States and the EU by establishing alternative trade and financial structures for emerging markets, which has the potential to influence international trade balances.
- The impact of BRICS' rise on global economic policies: The rise of the BRICS has caused a shift in global economic policies, especially with the growing influence of members such as China and India, towards greater multipolarity and opportunities for cooperation. Russia's strong positions in strategic sectors, such as energy resources and Brazil's agricultural products, shape their relations with other economic blocs and emerging markets, while affecting global trade norms and policies. South Africa's rise as a regional leader further reinforces the impact of BRICS on the African continent and strengthens the continent's role in the global economy.
Commercial Relations and Economic Cooperation between BRICS Countries:
- The most traded sectors within BRICS and the effects of this trade on economic growth: According to UN Comtrade data, among BRICS countries, the most traded sectors include energy, agricultural products, metals, and electronic products. To give an example of numbers;
Energy Products:
- Russia's oil exports to India in 2023 are worth about $49 billion.
- South Africa exports coal to Brazil, worth about $850 million in 2022.
Terraced rice field in the Far East
Agricultural Products:
- Brazil's soybean exports to China amounted to around $20 billion in 2023.
- Exports of rice from India to Russia were recorded at approximately $1.2 billion in 2023.
Metals:
- Exports of iron ore from South Africa to China were worth $4.5 billion in 2023.
- Russia's aluminium exports to Brazil amounted to $600 million in the same period.
Electronics and Technology Products:
- China's exports of electronic products to Brazil were worth about $15 billion in 2023.
- India's exports of information technology services to South Africa amounted to around $3 billion.
Looking to the Future: Challenges and Opportunities that BRICS Can Face:
BRICS countries have a significant impact on global security and political balances and stand out as a platform for leadership and cooperation in emerging markets. With western-based power blocs such as NATO, the EU and G7, it occasionally develops competitive or alternative policies, supporting diversity and multipolarity in international policy. In addition, in international crises, the role of China and Russia in mediation and diplomacy is trying to be effective at the regional and global level in line with their strategic interests. This leads to the adoption of BRICS as an important actor in the global order.
Turkey's Unending EU Journey
Interline of Ryabkov's Statements
Russian Deputy Foreign Minister Ryabkov should read well between the lines of his statements. Targets under the BRICS roof can be summarized as follows:
1- Breaking the hegemony of the G7 countries,
2- First, the development of trade with countries' own currencies, then BRICS currency,
3- Leaving the SWIFT system in the United States monopoly,
4- Establishment of the Community Central Bank,
5- BRICS is spread across a wide range of geographies such as Asia, the Middle East, Africa and Latin America; To make an economic community, such as the Customs Union or the African Union (Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates, officially joined the BRICS on 1 January 2024),
6- Fully independent of its members in domestic and foreign policy,
As a result...
The growing impact of the BRICS on global trade and economic policies places it as a strategic powerhouse. Economic cooperation among members creates new opportunities that can change the dynamics of the global economy and pave the way for a multipolar world order. However, various political and economic challenges may prevent this union from fully realizing its potential. However, with the participation of new members in the coming years, it is possible to say that BRICS will play a more prominent and effective role in international relations.
02.09.2024 Dated Note: While fulfilling its obligations as a key member of the North Atlantic Treaty Organization, Turkey has formally requested to join BRICS in a multipolar world with a desire to improve its relations with all parties.
2- https://www.aa.com.tr/tr/dunya/brics-6-yeni-ulkeyi-uyelige-davet-etti/2975005#
3- https://tr.wikipedia.org/wiki/BRICS
5- https://www.visualcapitalist.com/charted-comparing-the-gdp-of-brics-and-the-g7-countries/
6- https://databank.worldbank.org/data/G7—GDP-growth-(annual-)—2003—2012/id/e21a15d8
7- https://www.imf.org/external/datamapper/NGDPD@WEO/OEMDC/ADVEC/WEOWORLD
9- https://www.china-briefing.com/news/chinas-trade-development-with-brics-analysis-and-opportunities/
