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BRICS' potential for changing global economic order
With Indonesia joining the BRICS, a platform looking for strengthening South-South Cooperation and setting into motion a new world order, it now accounts for 40 per cent of the world population and 35 per cent of the global gross domestic product (GDP). Indonesia becomes the 10th member of the inte
BRICS' potential for changing global economic order
Nilratan Halder
Published :
Jan 09, 2025 22:36
Updated :
Jan 09, 2025 22:36
With Indonesia joining the BRICS, a platform looking for strengthening South-South Cooperation and setting into motion a new world order, it now accounts for 40 per cent of the world population and 35 per cent of the global gross domestic product (GDP). Indonesia becomes the 10th member of the intergovernmental organisation comprising six of the 10 most populous countries on the planet. India and China lead the table with more than 1.4 billion inhabitants each. If Thailand and Malaysia which have shown their interest in joining the bloc become full members, the population size of the BRICS will be 4.032 billion nearly half the world population. Their GDP will also inch towards the 40 per cent mark.
Now that the BRICS has grown in influence and financial status, it is a matter of time more emerging countries will clamour for membership. Given the monopoly of dollar in international trade and currency exchange, particularly the financial woes suffered by poor and developing nations like Bangladesh, there is every chance of such nations participating in the de-dollarising initiative and setting an alternative economic order. Costlier dollar in the post pandemic time followed by the disruptive period of international trade due to the Russia-Ukraine war has made them realise the bitter truth of relying on an apex single currency for exchange.
With the most populous countries also emerging as the leading financial powerhouses by 2050, the centre of gravity of the world economy is sure to shift. Therefore, an initiative to give a shape to the transition had to be taken in all seriousness. Thus comes the BRICS into being. China is still trailing US so far as their economic sizes are concerned but some of the variables are in favour of not only the Asian emerging giant but also India is poised to become the third largest economy behind the US and China by the middle of the century.
The potential of the BRICS in the process of expansion is great and if attained even 70-75 per cent of the promises, it could more than challenge the G7 bloc. The five founding members of the BRICS, according to the IMF data, had 33.76 per cent of the global GDP (in purchasing power parity terms) in October last. This share is against the 29.08 per cent GDP (PPP) of the G7 nations. The main contributor to the BRICS' higher GDP is China which has become the world's largest economy if measured by purchasing power parity. Its share in the global GDP is 19.1 per cent in PPP terms and around 18 per cent in nominal terms. The US, on the other hand, had 26 per cent of the global GDP in nominal terms but only 15.0 per cent in PPP terms in 2024.
Although India is the fifth largest economy in the world, in PPP terms it has long been ranked the third. More interestingly, apart from China and India, no other major economy has managed to expand their share for over a decade. For an example, in 2010, the USA's share in the global economy was 17.2 per cent but in 2024, it has declined to 15 per cent (PPP). India has raised its contribution from 6.0 per cent in 2014 to 8.2 per cent in 2024. Its contribution in PPP terms is two and a half times that of Germany, the third ranked economy in nominal terms. So the two most populous countries are still on what can be termed modest to robust growth trajectories.
That is likely to be the clinching factors for the BRICS when it comes to establishment of an alternative monetary and financial system if not a multi-dimensional economic order. Now what are the driving forces behind this economic performance by the world's two most populous countries? It is the manufacturing and productive capacities. BRICS members and its likely partners enjoy a lead in producing key commodities like cereals, fish and meat, oil seeds, crude oil, natural gas and minerals such as iron ore, copper and nickel. BRICS nations have a clear edge in producing the primary crops. Together Brazil, India and China produce two-thirds of the global sugarcane output. China and Brazil have 30 per cent share in the global maize production. Then China and India are the producers of half of the world's rice.
With Indonesia's entry into the bloc, the share of palm oil receives a boost. The country is the world's largest exporter of palm oil with 54 per cent share. If Malaysia and Thailand join the organisation, their production of this oil will be 90 per cent of the global total. In terms of production of another important crop potato, China and India have 40 per cent of the global share. In the production of fish, China and India have a lead. Similarly, in meat --- from beef to pork to chicken---production, Brazil, China and India have a share between 20-40 per cent of the global output. China and India are also leading producers of chicken eggs with China alone producing 34 per cent of the global total.
Thus the organisation has both raw materials and industrial capability along with agricultural support required for spurring economic growth. China has proved its technological muscle so has India in some of the select and advanced technology. With Russian advanced scientific and cutting-edge technological backup, the organisation can indeed establish a new global economic order.
Last but not least, Bangladesh, unfortunately, was not considered for membership although it was invited as an observer. It was surprising given the publicity of the Hasina government. Although six countries on the last day of the Johannesburg summit were invited to join the group, Bangladesh was not.
Nilratan Halder
Published :
Jan 09, 2025 22:36
Updated :
Jan 09, 2025 22:36
With Indonesia joining the BRICS, a platform looking for strengthening South-South Cooperation and setting into motion a new world order, it now accounts for 40 per cent of the world population and 35 per cent of the global gross domestic product (GDP). Indonesia becomes the 10th member of the intergovernmental organisation comprising six of the 10 most populous countries on the planet. India and China lead the table with more than 1.4 billion inhabitants each. If Thailand and Malaysia which have shown their interest in joining the bloc become full members, the population size of the BRICS will be 4.032 billion nearly half the world population. Their GDP will also inch towards the 40 per cent mark.
Now that the BRICS has grown in influence and financial status, it is a matter of time more emerging countries will clamour for membership. Given the monopoly of dollar in international trade and currency exchange, particularly the financial woes suffered by poor and developing nations like Bangladesh, there is every chance of such nations participating in the de-dollarising initiative and setting an alternative economic order. Costlier dollar in the post pandemic time followed by the disruptive period of international trade due to the Russia-Ukraine war has made them realise the bitter truth of relying on an apex single currency for exchange.
With the most populous countries also emerging as the leading financial powerhouses by 2050, the centre of gravity of the world economy is sure to shift. Therefore, an initiative to give a shape to the transition had to be taken in all seriousness. Thus comes the BRICS into being. China is still trailing US so far as their economic sizes are concerned but some of the variables are in favour of not only the Asian emerging giant but also India is poised to become the third largest economy behind the US and China by the middle of the century.
The potential of the BRICS in the process of expansion is great and if attained even 70-75 per cent of the promises, it could more than challenge the G7 bloc. The five founding members of the BRICS, according to the IMF data, had 33.76 per cent of the global GDP (in purchasing power parity terms) in October last. This share is against the 29.08 per cent GDP (PPP) of the G7 nations. The main contributor to the BRICS' higher GDP is China which has become the world's largest economy if measured by purchasing power parity. Its share in the global GDP is 19.1 per cent in PPP terms and around 18 per cent in nominal terms. The US, on the other hand, had 26 per cent of the global GDP in nominal terms but only 15.0 per cent in PPP terms in 2024.
Although India is the fifth largest economy in the world, in PPP terms it has long been ranked the third. More interestingly, apart from China and India, no other major economy has managed to expand their share for over a decade. For an example, in 2010, the USA's share in the global economy was 17.2 per cent but in 2024, it has declined to 15 per cent (PPP). India has raised its contribution from 6.0 per cent in 2014 to 8.2 per cent in 2024. Its contribution in PPP terms is two and a half times that of Germany, the third ranked economy in nominal terms. So the two most populous countries are still on what can be termed modest to robust growth trajectories.
That is likely to be the clinching factors for the BRICS when it comes to establishment of an alternative monetary and financial system if not a multi-dimensional economic order. Now what are the driving forces behind this economic performance by the world's two most populous countries? It is the manufacturing and productive capacities. BRICS members and its likely partners enjoy a lead in producing key commodities like cereals, fish and meat, oil seeds, crude oil, natural gas and minerals such as iron ore, copper and nickel. BRICS nations have a clear edge in producing the primary crops. Together Brazil, India and China produce two-thirds of the global sugarcane output. China and Brazil have 30 per cent share in the global maize production. Then China and India are the producers of half of the world's rice.
With Indonesia's entry into the bloc, the share of palm oil receives a boost. The country is the world's largest exporter of palm oil with 54 per cent share. If Malaysia and Thailand join the organisation, their production of this oil will be 90 per cent of the global total. In terms of production of another important crop potato, China and India have 40 per cent of the global share. In the production of fish, China and India have a lead. Similarly, in meat --- from beef to pork to chicken---production, Brazil, China and India have a share between 20-40 per cent of the global output. China and India are also leading producers of chicken eggs with China alone producing 34 per cent of the global total.
Thus the organisation has both raw materials and industrial capability along with agricultural support required for spurring economic growth. China has proved its technological muscle so has India in some of the select and advanced technology. With Russian advanced scientific and cutting-edge technological backup, the organisation can indeed establish a new global economic order.
Last but not least, Bangladesh, unfortunately, was not considered for membership although it was invited as an observer. It was surprising given the publicity of the Hasina government. Although six countries on the last day of the Johannesburg summit were invited to join the group, Bangladesh was not.
