BRICS expansion – a threat to the West?

The BRICS (Brazil Russia India China and South Africa) countries have long been concerned about the dominance of the West in global financial institutions and trade. In order to try and increase its influence the BRICS countries agreed to add new members to the Alliance – Saudi Arabia UAE Iran, Egypt, Ethiopia and Argentina. BRICS countries represent 42% of the global population and over 25% of global GDP – see table. BRICS have overtaken the G7 leading industrialised nations in their share of World GDP (PPP based) 32% compared to the G7 of 30% – see graph.

However BRICS’ voting power in the IMF and the World Bank does not equate to its share of global GDP. Recently they have been increasing trade in their own currencies to reduce their reliance on the US$ and there has been talk of creating their own common currency. However, although India South Africa and Brazil are all keen on a positive relationship with the West the same could not be said about Russia and China. Add to this the cross border issues between China and India. Below is a video from Al Jazeera – ‘Counting the Cost’- where they discuss the impact on the West and the threat to the US$ dominance.

Sign up to elearneconomics for comprehensive key notes with coloured illustrations, flash cards, written answers and multiple-choice tests on trade and exchange rates that provides for users with different learning styles working at their own pace (anywhere at any time).