BRICS is an acronym for Brazil, Russia, India, China, and South Africa, an intergovernmental organization headquartered in Shanghai. In January 2024, BRICS expanded to include Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates. Argentina was on track to join but withdrew its application. BRICS has evolved as a combination of US allies, non-allied nations, and avowed rivals or outright enemies. The one common denominator is that the BRICS nations are not included in the G7: Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, with the EU being considered a “non-enumerated member” since France, Germany, and Italy are formal members.
BRICS announced the formation of the New Development Bank (NDB) in 2012 to augment lending to member nations. BRICS’ perspective was that the World Bank, the IMF, and various other development lenders had failed to lend enough and focused available lending on priorities chosen by the US and other Western countries. The NDB began lending in 2016, particularly emphasizing green and environmentally friendly projects. The BRICS’ 2015 summit announced they would explore creating a new reserve currency that they would use in preference to the dollar.
What is a reserve currency, and how did the dollar come to be one? Under the gold standard, virtually all payments for international trade were made in gold coin, making a reserve currency irrelevant.
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