Context:
Recently, Indonesia became the latest country to officially join the BRICS block.
More on the News
- BRICS member states unanimously approved Indonesia’s membership during the 2023 BRICS summit held in Johannesburg, South Africa.
- However, Indonesia chose to finalise its membership only after the establishment of its new government after its presidential election in 2024.
About BRICS
- The term “BRIC” (Brazil, Russia, India, China) was first coined by Goldman Sachs economist Jim O’Neill in 2001.
- BRIC, as a formal grouping, started after the meeting of the Leaders of Russia, India and China in St Petersburg on the margins of the G8 Outreach Summit in 2006.
- The grouping was formalized during the first meeting of BRIC Foreign Ministers on the margins of UNGA in New York in 2006.
- The first official BRIC (Brazil, Russia, India and China) summit was held in Russia’s Yekaterinburg in 2009 and South Africa joined the group in 2010.
At the 2023 BRICS summit in South Africa, BRICS extended invitations to 6 countries namely Saudi Arabia, Iran, the United Arab Emirates, Egypt, Ethiopia, and Argentina.
- Argentina later declined to join the organization.
- Saudi Arabia has yet to convey its decision to BRICS about formal acceptance of the joining.
- An invited BRICS member state becomes a BRICS member state when its Leader or Foreign Minister formally conveys to the BRICS Chair its decision to accept the invitation for BRICS membership.
Structure of BRICS
- It operates with a flexible structure, lacking a formal headquarters or secretariat.
Key Mechanisms:
- New Development Bank (NDB): It was established in 2014 to finance infrastructure and sustainable development projects in BRICS and other developing countries.
- Contingent Reserve Arrangement (CRA): This financial safety net provides liquidity support to member countries facing balance of payments crises.
- BRICS Academic Forum: A platform that fosters educational and research collaborations among universities in BRICS nations.
Recent Developments
- The most recent 16th BRICS summit took place in Kazan, Russia, in October 2024.
- At the summit, member states discussed strengthening local currencies and boosting non-dollar transactions.
- In response, US President-elect Donald Trump has warned of imposing 100% tariffs on BRICS if they create a currency that competes with the US dollar.