BRICS is bolstering its impact on the global economy. This trend is largely driven by the emergence of BRICS+ and the vocal networking among this international association’s member states, as well as by the establishment of various cooperation formats. The BRICS+ Fashion Summit to be held in Moscow for the second time this year is one such format. In fact, the fashion industry demonstrates one of the highest growth potentials within BRICS: industry experts predict that China, India, Brazil and Russia will dominate in this sector by 2050.
Let us see how BRICS is reshaping the global economic landscape.
The history of BRICS began in 2006, when Brazil, Russia, India and China held their first ministerial meeting, while the first BRICS Summit took place in Yekaterinburg, Russia in 2009. In those days, the BRICS countries were playing it by ear in many ways but they already knew that the world had to change: the disparity between the economic strength of the West and the countries with booming economies in terms of their political capital, representation in global governance institutions and the impact on decision-making was becoming increasingly obvious.
The BRICS acronym was invented back in 2001 by Jim O’Neill, a British economist who then worked at the US investment bank Goldman Sachs. He explored the economic strength of developing countries, picked the most promising ones and put their names together as BRIC (Brazil, Russia, India and China). Back in 2013, Jim O’Neill said in an interview with our magazine: “By 2050, the world’s largest economies will probably not be the richest. In fact, the four BRIC countries are on track to outgrow the G7 by 2035.” And his forecast has come true even faster than the economist expected (see G7 vs BRICS chart).
In 2011, South Africa joined the organization, turning BRIC into BRICS, and since the beginning of 2024, the number of its member countries has doubled after Saudi Arabia, Iran, the UAE, Egypt and Ethiopia entered the grouping. In early September this year, Türkiye applied to join BRICS, making no secret of the fact that it did so being frustrated by the lack of progress in the country’s decade-long attempts to join the EU, as well as because of Türkiye’s motivation to diversify its economy and build new ties beyond the circle of its traditional Western allies. In his interview with Tucker Carlson in February 2024, President Vladimir Putin drew the following parallel: in 1992, the share of the G7 in the global economy reached 47%, “dropping to just over 30%” in 2022, while the share of the BRICS nations was just around 16% in 1992 and has now outmatched the “big seven.”
Almost 30 countries have already declared their interest in joining BRICS. These include Azerbaijan, Algeria, Bangladesh, Bahrain, Belarus, Bolivia, Venezuela, Honduras, Zimbabwe, Cuba, Kuwait, Nigeria, Pakistan, Senegal and Sri Lanka. Malaysia and Thailand, the key economies of Southeast Asia, are now in the spotlight: experts believe that, if these countries join the BRICS core or the group of partner countries, other major economies in the region might also decide to strengthen their ties with BRICS.
“BRICS+ creates a forum that, at minimum, gives emerging markets an opportunity to align themselves on global topics and new opportunities,” Boston Consulting Group (BCG) experts state in their analytical report “An Evolving BRICS and the Shifting World Order”. BCG analysts believe that a stronger BRICS+ could have a significant global impact on energy, trade networks, infrastructure, monetary policy and technology.
The textile and fashion industry is yet another branch of the global economy where BRICS+ is strengthening its influence year by year, which could have both economic and sociocultural effects given the impact of fashion on society and people’s mindset.
BRICS has taken a much stronger grip on the energy market since the five new members joined the alliance. With Iran, Saudi Arabia and the UAE, the bloc’s members will account for almost 40% of global oil production and around 30% of that of natural gas. In addition, almost half the countries that have applied for membership are major global hydrocarbon suppliers.
An important feature of BRICS is that the grouping includes major oil importers – China and India. Having big oil consumers and suppliers within a single organization could create a parallel system of energy trading, BCG analysts say. They point out that this would allow transactions between BRICS+ countries outside the Western financial system, potentially enabling BRICS to manipulate oil prices.
By all means, trade drives the economic development of BRICS members, although technically the countries are not bound by economic preferences and trade with one another on old terms. The bloc offers a platform for regular consultations and sends investors a clear political signal to explore new markets. Between 2017 and 2022, trade turnover between the top five BRICS members grew by 56% to reach $422 billion.
China almost doubled its trade with other BRICS countries in five years, while its turnover with the United States remained almost unchanged. Beijing has strengthened its role as both supplier and importer. Western sanctions have also contributed to the growth of trade within BRICS, redirecting Russia’s exports to China and India.
Growing volumes of trade between BRICS countries will intensify the trade flow within the Global South and could determine how the bloc’s participating countries will trade with their regional partners. This, in turn, will open up new opportunities for using national currencies and give an extra boost to investment.
Experts believe that de-dollarization is a long-term global trend. The trade between BRICS countries will rely increasingly on national currencies. Almost 90% of all payments between Russia and China are already made in roubles and yuan, Russian President Vladimir Putin said during the meeting with Chinese President Xi Jinping in May 2024. In 2023, the amount of Russia–India payments in rupees and roubles via the Sberbank infrastructure increased 11-fold over 2022, according to Anatoly Popov, Vice-Chairman of Management Board at Sberbank, in an interview with TASS. He mentioned that “the rupee already ranks second as a payment currency in Sberbank, after the Russian rouble, of course.” Development banks of the BRICS countries might also play an essential role in de-dollarization. The BRICS New Development Bank (NDB) has extended almost 1/5 of its loans in Chinese yuan and announced its intention to use real and rand, the national currencies of Brazil and South Africa.
Independent payment systems and other financial infrastructure will help reduce global dependence on the US dollar. Russia is now working with its foreign partners to launch the BRICS Bridge platform, which will allow payments in national digital currencies: central banks are expected to be able to issue digital financial assets similar to tokens. There are also plans to introduce a separate currency named “Unit” for payments among the BRICS countries.
One BRICS achievement is the New Development Bank (NDB) established in 2014 to finance infrastructure projects and sustainable development initiatives. Since its founding, the bank has extended a total of $33 billion in loans to 96 projects in five BRICS countries.
Analysts from the Franklin Templeton Institute call the NDB a “strong signal of intent”. They say that, before the NDB, BRICS was only pondering on an alternative to the Western-centric world order, criticizing organizations such as the United Nations and the World Bank. The NDB amplifies the existing rhetoric and is positively beneficial for the BRICS countries, the analysts report. They believe that investors should treat the NDB as a project that will grow in both size and importance as a lender to the Global South because this is one of the few areas where all BRICS+ members can reach an accord.
At the 2023 BRICS Summit, Indian Prime Minister Narendra Modi proposed establishing a BRICS space research consortium. This proposal came right after the triumph of India’s space program, when the Indian lunar station Chandrayaan-3 made a soft landing on the Moon. Mr. Modi, who was then attending the summit in Johannesburg, watched the landing live. Expansion of cooperation was also discussed at the Moscow meeting of the Heads of BRICS Space Agencies in May 2024.
The BRICS Partnership on New Industrial Revolution (PartNIR) is an important initiative that involves shaping a new approach to manufacturing via extensive introduction of information technology in the manufacturing industry and automation of business processes. China’s leader Xi Jinping proposed the pooling efforts in this domain in 2017. The PartNIR Innovation Centre was launched in Xiamen in 2020, its opening ceremony marking conclusion of investment agreements on 28 projects to a total of approximately 13 billion yuan (~$2 billion).
According to the Global Innovation Index, most BRICS member countries are leaders in innovation within their respective income groups and occupy dominant positions in their regions. All BRICS countries are working to enhance their scientific capacity, China certainly being the leader in this respect, both within BRICS and globally. According to the Economist, “China has become a scientific superpower”. The country tops the Nature Index of research publications and issues more patents than any other country. Starting in the late 2000s, more scientists have been returning to China than emigrating and China today has more researchers working in the country than the USA and the entire EU combined.
With population growth and middle class expansion, the role of BRICS countries as markets for the global textile sector and fashion brands is gaining strength. After all, BRICS today is the world’s fastest growing fashion market. China is its undisputed leader as the biggest producer and exporter of clothing, as well as the biggest consumer. The country produced 30 billion garments in 2019, which was 35% of global clothing exports. India is the world’s second biggest producer of textiles. The fashion industry in Brazil is expected to show a 3.5% annual growth. South Africa is the key player within the African fashion market today. Experts say that Russia’s market for luxury fashion goods will grow by up to 8% a year.
The BRICS+ countries can transform global fashion, make it more differentiated and decentralized, with a greater focus on local manufacturers, which is in line with sustainable development principles. The BRICS countries today demonstrate a clear trend towards developing their own fashion industries, bringing them to the global stage and shaping a new fashion system. The BRICS+ Fashion Summit in Moscow, the first international platform enabling BRICS+ industry professionals to engage in dialogue and cooperation, and come up with their own development strategy for a better future, is the venue designed for pursuing these goals.