The BRICS: a good idea distorted by political ambition

By: Beatrice E. Rangel - 02/10/2024

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No one was surprised by the recent statement by a spokesman for the BRICS group indicating that this group had never considered Venezuela's entry. Because if it had considered it, that decision would have been the final nail in the coffin for the BRICS group. Because it is difficult to imagine that a country that has reduced its gross product by 80% in the last 20 years and caused the largest wave of emigration in the history of the region it inhabits could be valued as a member of a group characterized by having within its midst the most thriving economies of the developing world.

In fact, to appreciate the dimension of the nonsense of considering Venezuela's entry, it should be remembered that the BRICS are the creation of a North American investment bank, specifically Goldman Sachs, whose analysts observed that the behavior of a group of emerging economies seemed to have left underdevelopment behind to arrive at sustainable growth that would later translate into full development. These countries were and are Brazil, Russia, India and China. Later, South Africa joined. If you put the initial letters together, you get the word BRICS. The idea behind the grouping of these nations was to highlight their future vocation and potential as investment destinations to continue favoring the growth of individual development rates and through the increase of trade between these nations and the rest of the world to stimulate their growth. Each of the BRICS nations boasted, at the end of the last century, exuberant growth rates and reductions in poverty levels. International capital flowed to these destinations because, in addition to presenting comparative advantages over the rest of the developing nations, they had all embraced the creed of deregulation, opening of markets and strengthening of education and health services.

In short, they were nations that were successfully navigating globalization. And thanks to globalization, they enjoyed a tailwind that was projecting them towards better economic destinies. But at the beginning of this century, the BRICS ceased to be a banking classification to become a bureaucratic organization with political definitions. In 2006, Brazil, Russia, India and China decided to create an association to challenge the power of developed nations and encourage the emergence of a new focus of world power. Once this decision was made, the founders proceeded to consider replacing the American dollar with other currencies in international trade; to promote regulated trade and to develop authoritarian tendencies in government conduct. They also invited nations that lack clear development paths, such as Egypt and Ethiopia, to join the cause. They also invited Saudi Arabia and the United Arab Emirates, countries that hesitate between joining or staying out.

One of the most significant initiatives to foster the development of nations whose economies were beginning to take off on their own was thus perverted. The consequences of this unfortunate institutional shift have not gone unnoticed. Investors have lost interest in the BRICS and are looking for better destinations in emerging nations that prefer to adhere to the rule of law and exploit their comparative advantages to the maximum, such as Vietnam; Chile; Senegal, the Philippines, Indonesia, the Ivory Coast and Rwanda. These countries seem more willing to confront the challenges of development without political paradigms and feel comfortable with the creation and growth of their middle classes. If they continue along the paths of trade openness, adherence to the rule of law and investments in infrastructure, education and health, they will soon leave behind the BRICS, which will continue to debate how to operate outside the influence of the two largest economies in the world: the United States and Europe.

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