Will the BRICS Tumble Amid Russia’s Invasion of Ukraine?

Jim O'Neill

Image courtesy of Alexey Nikolsky / Sputnik / AFP

As international sanctions over the war in Ukraine slow Russia’s growthglobal knock-on effects – from higher gas prices to faster inflation – are easy to see. Others, like whether the Russian invasion will lead to an end of the official grouping of emerging economies known colloquially as the BRICS, require closer examination.

The BRICS – Brazil, Russia, India, China, and South Africa – is a political body created about seven years after I coined the original term in 2001 (with a small ‘s’ for plural rather than a large ‘S’ for South Africa) to represent the changing economic power drivers of the world economy. They were identified for their significant influence on developing country affairs, including integration into the global economy.

Although the central piece of my original thesis was to highlight the need for representative global governance, the BRICs acronym garnered acceptance because of the rising economic powers of these countries, especially China. While leaders of the BRICs were excited by the publicity for their economic potential, their attraction to the idea of a club was also to foster political recognition beyond the global institutions dominated by the United States.

Indeed, it is this initial motivation that keeps them enthusiastic members today, rather than undertaking any genuine joint policy development. That impulse will remain regardless of Russia’s military adventurism, which is why I suspect the BRICS political entity will live on for quite some time. Whether it matters is another question entirely.

The aggregate size of the BRICS countries is dominated by China, which, according to data from the end of 2021, had an economy in nominal dollar terms of about $18 trillion. This is more than six times the size of India’s economy, about 10 times Brazil’s and Russia’s, and some 55 times the size of South Africa’s. Collectively, the BRICS today are worth about $25 trillion, roughly the size of the US economy.

But China is the only BRICS country with an economic performance that has exceeded the potential anticipated in 2001. India has come close, but 20 years on, Brazil and Russia have disappointed significantly, while South Africa has done even worse. In this sense, many economists, businesspeople, and journalists have stopped paying much attention to the BRICS nations’ collective actions.

With Chinese involvement, the BRICS remain an economic force, and because of this, it remains feasible that by the mid- to late-2030s, their collective economic size may become as large as the G6 (the G7 minus Canada). On the other hand, without China, the collective weight of the others would be greatly dependent on India achieving its true potential.

Given the current state of affairs, the superficial awareness grows that the group may find it harder to be truly influential. I have sometimes joked that, economically at least, maybe it should be thought of as simply the “ICs,” to symbolize the economic importance of China and India. Certainly, for Brazil and Russia to justify the global economic recognition that the BRICs acronym provided, it is time to start performing dramatically better (which in Russia’s case seems especially unlikely).

Against this background, let’s consider the BRICS in the context of the Russian invasion.

As I wrote in the Financial Times last November to mark the 20th anniversary of the BRICs, the political club has not undertaken any major joint policy initiative since it was created, except for the formation of the BRICS Development Bank (now called the New Development Bank). It is disappointing that, despite the economic weakness of three members, there has been little appetite for initiatives that might boost their individual or collective economic performance.

Evidence of this apathy can be seen in India’s fraught bilateral diplomatic, security, and defense ties with China. Indian Prime Minister Narendra Modi has yet to attend a single meeting for China’s much discussed One Belt One Road initiative, snubs that are reflective of India’s objections to China’s ties to Pakistan. In areas where there could be exceptional benefits of economic cooperation – such as trade agreements or infectious disease prevention – the BRICS, led by the ICs, has been completely absent.

Viewed in this context, the political club excels at symbolism and little else, highlighting the ongoing, deteriorating state of global governance institutions that I had hoped the BRICS creation might improve. To be fair, it is also true for other global clubs, both those with and without the BRICS.

Even the G20, which gave the BRICS countries an individual global voice, has been disappointing since 2008, when it was instrumental in navigating the global financial crisis.

The BRICS’ mixed response to the Russian invasion highlights the realities of the BRICS group today. While Brazil, India, China, and South Africa have all refused to criticize Russia’s hostilities in Ukraine and have not voted against the invasion at the UN, none have done anything to actively support Russia, either. I doubt this position will change.

As for Russia, which is economically not much bigger than South Korea, its global slide will continue, unless there are huge reforms. President Vladimir Putin realized long ago that his country couldn’t keep its early noughties economic boom going, and instead has appealed to the historical and nationalist tendencies of many Russian citizens to keep his popularity. This will have long-term negative consequences for Russia. It will also virtually ensure that the BRICS grouping remains little more than a symbolic shell of unreached potential.

Jim O’Neill is a former chief economist at Goldman Sachs and served as a UK treasury minister.