According to recent financial data, BRICS has surpassed the G7, which currently contributes 30.7% of the global GDP, as the largest group of countries in terms of gross domestic product (GDP). Brazil, Russia, India, China, and South Africa are together known as BRICS. In 2001, the Chief Economist of Goldman Sachs used it to refer to the global emerging economies. Initially known as BRIC, the “S” was eventually added when South Africa formally joined the group in 2010.

According to recent financial data, BRICS has surpassed the G7, which currently contributes 30.7% of the global GDP, as the largest group of countries in terms of gross domestic product (GDP).

When the emerging alliance established the New Development Bank in 2014 with $50 billion in seed funding, BRICS started taking significant moves toward closer integration. The organization was ready to take action to oppose Western hegemony over international financial institutions, particularly the World Bank and the IMF.

Following the ongoing geopolitical conflict that resulted from the conflict between Russia and Ukraine, the organization saw a resurgence as China and Russia moved to oust themselves from western control structures, including the U.S. dollar, a key component of global trade and hegemony.

The Chinese Yuan would be used as a settlement currency with rising economies, according to an April 2023 agreement between Chinese President Xi Jinping and Russian President Vladimir Putin. At the same time, data from China’s State Administration of Foreign Exchange (SAFE) reveals that for the first time ever in the month of March 2023, the RMB Yuan surpassed the US dollar to become the most widely used currency in the nation’s cross-border transactions.

While India is also moving away from the dollar, China and Brazil have also decided to settle trade using their own currencies rather than the US dollar. A senior Russian official said that in addition to the bilateral steps, the BRICS countries are developing a new currency, the details of which would be announced at a summit conference to be held in South Africa in August 2023.

With numerous additional nations expressing interest in joining, the five-nation bloc may also soon grow in size, including:

Argentina
UAE
Mexico
Egypt
Algeria
Saudi Arabia

The New Development Bank has also received approval from Egypt’s Parliament, with legislators expressing support for the nation’s membership in the BRICS Bank and seeing it as a way to lessen dependency on the US dollar.

While the Ukraine-Russia conflict affects developing nations due to the disruption of regular supply chains, developing nations’ economies also see an opportunity to loosen the hold the US dollar has on their economies as higher interest rates in the west are stifling domestic economic activity. Developing nations are also apprehensive of the American-led system, which combines financial assistance with an overtly political purpose or subtly manipulates and controls regional economies. Although this approach is entirely tied to privatization and opening markets for foreign investor-led western firms, it is frequently defended under the pretext of human rights and democracy.

The U.S. dollar has an effect on the G7 as well, and none other than the president of France, Emmanuel Macron, has urged Europe to concentrate on reducing its reliance on the U.S. dollar. The United States has put sanctions on nations like Russia, China, and Iran during the past few years in an effort to limit their access to the main dollar-denominated international banking system. The ‘weaponization’ of the dollar by the United States, which compelled European businesses to cut relations with third parties or face being subjected to severe secondary sanctions, has drawn criticism from some quarters in Europe.

Western power over the South will weaken the more successful BRICS become. Although some western politicians and media outlets continue to minimize the impact of the BRICS on the creation of the new global order, the transition appears to be genuine and irreversible.