BRICS+ holds significant relevance to emerging markets by providing a platform for economic cooperation, financial support, and geopolitical alignment. The BRICS+ initiative, which extends beyond the core or new BRICS+ members, to include a broader range of developing and emerging economies, fosters mutual trade, investment, and political collaboration, particularly for nations in the Global South.
For emerging markets, BRICS+ offers access to alternative trading partners and investment opportunities, helping them diversify away from traditional economic powers like the United States and the European Union. By forming stronger ties within this group, emerging markets gain the opportunity to reduce their dependency on Western economies and engage in trade relationships that promote equitable growth.
BRICS+ serves as an important political platform for emerging markets seeking to challenge the dominance of Western-led international organisations like the United Nations, the World Bank, and the IMF. For countries in Africa, Latin America, and Southeast Asia, BRICS+ represents a chance to have greater influence on global governance and to advocate for a more multipolar world order.
The New Development Bank (NDB), (BRICS+’s bank) provides an alternative to traditional financial institutions like the World Bank and International Monetary Fund (IMF). This is crucial for emerging markets that may struggle to secure favourable loan terms or development funding from Western-led institutions. By offering more flexible loans, with no austerity measures and infrastructure investments, BRICS+ supports the sustainable development of critical sectors in emerging markets, from energy and agriculture to telecommunications and transportation, that play a long-term role in the sustainable development of the Global-South.
Alongside this, BRICS+ has been a strategic advocate for reducing dependence on the dollar in international trade. Emerging markets often face vulnerabilities tied to the dollar, such as fluctuating exchange rates and inflationary pressures. BRICS+ has begun advocating for financial autonomy that serves the growth of emerging markets. This advocation has led to an increase in conducting trade in local currencies or the yuan, ruble and rupee as alternatives.
BRICS+ offers valuable opportunities for economic diversification, access to development financing, enhanced financial independence and greater geopolitical influence to emerging markets. By engaging in BRICS+, emerging markets can strengthen their positions in the global economy and work toward more balanced and equitable growth.
Non BRICS countries: Prospective BRICS countries (How they can be benefitted)
Turkey, Malaysia, Thailand, and Argentina stand to gain significant benefits from joining BRICS, which could help them advance both economically and geopolitically.
For Turkey, membership would bolster its geopolitical influence by positioning it at the centre of a major global bloc, allowing it to diversify its international relations beyond its traditional Western alliances. Turkey could benefit from increased trade with BRICS nations, especially China and Russia, and gain opportunities for infrastructure development and energy cooperation. These advantages could help stabilise its economy, which has faced challenges like inflation and currency instability.
Malaysia would also see significant economic benefits from joining BRICS. As a key exporter in Southeast Asia, the country could deepen trade relations with massive markets like China and India. Additionally, Malaysia could access new streams of investment, especially in infrastructure, technology, and energy. In joining BRICS, Malaysia would be able to balance its traditional partnerships with the West while positioning itself more prominently in the Asia-Pacific region.
For Thailand, BRICS membership could provide valuable financial and infrastructural support. The country’s development goals, including infrastructure projects, align with the bloc’s objectives. By gaining access to financial resources through the BRICS New Development Bank (NDB), Thailand could further its efforts in building key sectors like transportation and energy. Additionally, joining the bloc would strengthen Thailand’s tourism and export sectors, as BRICS nations such as China, India, and Russia are crucial markets. Geopolitically, Thailand would enhance its influence in regional and global discussions by aligning with BRICS.
Argentina, which has faced persistent economic issues, could particularly benefit from BRICS membership as a means of economic stabilisation. By joining, Argentina would diversify its financial and trade partnerships, reducing its dependence on Western institutions like the IMF. Its rich energy resources and agricultural exports could be in higher demand within the BRICS bloc, especially from countries like China and Brazil. Furthermore, development financing through the NDB could help Argentina fund essential infrastructure projects, which would aid in its economic recovery. Although the incumbent dispensation is less of a friend to BRICS resulting in Argentina’s withdrawal from the list of prospective BRICS countries, its benefits cannot be emphasised enough. Additionally, many African countries like the Democratic Republic of Congo, and Algeria has shown interest in joining BRICS.
In sum, BRICS membership offers these countries the potential for increased trade, financial support, geopolitical leverage, and economic diversification, positioning them to better navigate both regional and global challenges.
The BRICS countries—Brazil, Russia, India, China, and South Africa—have steadily increased their share in global trade, with their combined nominal GDP accounting for over 31% of the global economy in 2023. Together, these nations have a key role in shaping global trade flows, with specific relevance to energy, infrastructure, and industrial goods.
China is the world’s largest trading nation, accounting for approximately 15% of global exports in 2023. Its ports, such as Shanghai (the busiest in the world), Ningbo-Zhoushan, and Shenzhen, are integral to global supply chains. Key maritime routes for China include the South China Sea, the Strait of Malacca, and the Pacific shipping lanes. China’s investments in the Belt and Road Initiative (BRI) have expanded its maritime and land route influence, strengthening its trade ties with Asia, Europe, and Africa. Additionally, China’s ports handle a significant amount of trade with BRICS nations, especially India and South Africa.
India has emerged as a vital trading partner within BRICS, with a focus on expanding its port infrastructure. Major ports like Mumbai, Chennai, and Kandla are central to its maritime trade. India is also a key player in land-based trade routes like the North-South Transport Corridor (INSTC), connecting it to Russia and Iran, significantly reducing the time and cost of trade with Europe. This route bypasses the Suez Canal and is set to be a critical artery for BRICS trade.
Iran’s geographical position makes it a critical node in global trade, especially for energy routes. The Strait of Hormuz, through which 20% of global oil passes, is Iran’s most significant maritime chokepoint. Iran is also integral to the International North-South Transport Corridor (INSTC), linking India to Europe via Iran and Russia, cutting shipping times by as much as 40%. Iran’s ports like Bandar Abbas are crucial for both land and sea routes within the BRICS+ network.
South Africa, the southernmost country in Africa, has strategic control over the Cape of Good Hope shipping route, a critical maritime route connecting Europe, Asia, and the Americas. Its largest ports—Durban, Cape Town, and Port Elizabeth—are essential for global maritime trade, especially with BRICS partners. South Africa’s participation in BRICS+ strengthens its role as a gateway for trade with the rest of Africa, particularly as intra-African trade grows under the African Continental Free Trade Area (AfCFTA).
BRICS nations, particularly China, India, South Africa, and Iran, hold strategic positions in global trade routes, influencing energy markets, manufacturing supply chains, and infrastructure development. By leveraging maritime chokepoints, expanding port infrastructure, and developing land-based corridors like the INSTC and Belt and Road Initiative, BRICS members are set to continue reshaping global trade patterns and strengthening their collective economic influence. This strategic alignment offers an alternative to Western-dominated trade blocs and sets the stage for greater economic cooperation among emerging markets.
The BRICS+ bloc, including its new member states such as Egypt, Ethiopia, the UAE, Saudi Arabia, and Iran, boasts some of the most strategically significant ports globally. These ports are essential for the region’s trade, connecting the BRICS+ economies with international markets. Here’s a breakdown of the major ports:
The ports within the BRICS+ bloc form a crucial backbone for global trade, particularly in emerging markets. They facilitate the efficient movement of raw materials, energy, and consumer goods across some of the world’s most critical trade corridors. The strategic location of these ports ensures that BRICS+ countries will continue to play an influential role in shaping global trade flows, particularly as new initiatives like the Belt and Road Initiative and the International North-South Transport Corridor gain momentum. BRICS+ countries hold sway over vital global energy and trade routes, further solidifying their importance in the global economy.
Logistics and transportation are vital for BRICS because they are the backbone of economic cooperation, trade, and development among member countries. Efficient logistics and transportation systems enhance connectivity, reduce the cost of goods, and improve supply chain efficiency, which is crucial for facilitating trade both within the bloc and globally. Given the geographical spread of BRICS countries across multiple continents, seamless transportation networks are essential for integrating their markets, enabling the movement of raw materials, manufactured goods, and services.
Importance of logistics and transportation for BRICS, along with key initiatives:
Logistics and transportation infrastructure are not just about the physical movement of goods—they are key drivers of economic integration, development, and competitiveness for BRICS. Efficient systems reduce bottlenecks, improve market access, and help BRICS nations assert their influence in the global economy.
BRICS trade finance refers to the mechanisms and financial arrangements that facilitate international trade among BRICS countries—Brazil, Russia, India, China, and South Africa—and with other nations. Trade finance involves a range of financial products and services that reduce the risks involved in international trade, such as letters of credit, guarantees, export financing, and payment facilities. For BRICS, trade finance is crucial in enhancing trade flows, enabling businesses to manage cash flows, and mitigating risks like currency fluctuations, political instability, and market uncertainty.
Key Aspects of BRICS Trade Finance:
Examples of BRICS Trade Finance in Action: