1. By 2030 BRICS will surpass the G7 in the world economy
BRICS economies have been skyrocketing over the past decades and are expected to take the lead in the world economy in the forthcoming years. While in 1980 more than 50% of the global GDP was produced by the G7 countries and only 10% by the BRICS five (Brazil, Russia, India, China and South Africa), the share gap has been gradually decreasing. In 2023, for the first time in history, the BRICS economies surpassed the GDP of the G7 countries in terms of purchasing power parity (PPP). It is only a matter of time when BRICS will take a lead nominally too. According to some estimates, this could happen as early as 2030, with the bloc contributing over 50% of global GDP. There are other key indicators that need to be considered – the group accounts for 25% of global exports, it produces 43% of crude oil and over 70% of rare earth minerals globally. The bloc represents over 43% of the global population, an invaluable resource for further economic expansion. With a stable population and economic growth, BRICS countries will account for 59% of all new middle classes in 2024 globally.
2. BRICS challenges Western international institutions and sanctions policy
The BRICS cooperation challenges the Western-centred legal and institutional frameworks of global economy and international relations. The group effectively debilitates unilateral sanctions regimes – there is a gentlemen’s agreement among members that they will not comply with sanctions imposed by third parties on any of the BRICS member states. The group has also taken a lead in de-dollarization efforts – today less than 29% of bilateral trade among BRICS economies is accounted in US dollars, the rest is done in local currencies. Last year over half of China’s cross-border payments were conducted in Yuans, surpassing the share of the dollar (43%). Moreover, a study is being prepared in Russia on the creation of an independent BRICS payment system, which will be presented to the leaders of member states at the BRICS Summit in Kazan in October 2024. The document includes key initiatives such as the cross-border payment system, the establishment of a structure to ensure inter-custodial interactions and the creation of its own reinsurance system. The BRICS cooperation also lays a great emphasis on the creation of a political cohesion within the bloc by investing into soft power mechanisms – the current Russian presidency organized more than 260 events that included cultural exchanges, educational programs, youth forums and even sports events and a fashion show.
3. Despite divergent visions on the bloc’s orientation, the common ground of reforming the international system will remain
Intra-BRICS trade is expanding rapidly; however, this has mainly been an increase in bilateral trade with China, and mostly Chinese imports. The growth potential of the Indian economy may alleviate some of this imbalance, but the sheer size of the Chinese economy, its central position in global supply chains and Beijing’s growing great power politics will continue to reinforce its dominance within the group. One of the consequences of the China-centricity of the formation may be that Beijing will increasingly be able to use the BRICS as an instrument of its own foreign policy. Since the escalation of US-China relations and Russia’s invasion of Ukraine, Moscow and Beijing’s BRICS objectives have converged, with the two countries increasingly seeking to position the group against the West and the United States in particular. Nevertheless, India, Brazil and South Africa, do not share this vision, but see BRICS primarily as a tool of reforming the existing international system and helping to create a multipolar order in which developing countries do not have to choose sides in the US-China rivalry. The future of BRICS will be largely determined by whether the anti-Western or the non-aligned line prevails. However, in the short run the basic common denominator of BRICS cooperation is not likely to disappear, as it is in the interest of all member states to accelerate the change of the current international system.
4. A successful expansion in Kazan could send a strong signal to the West that BRICS+ cooperation can overcome internal challenges
Expansion will be a key issue during the 2024 summit in the Russian city of Kazan. According to official announcements, representatives from 32 countries, including 24 heads of state, have confirmed their participation, highlighting the bloc’s increasing appeal. Signalling the rapid expansion of BRICS’ influence, countries like Azerbaijan, Belarus, Cuba, Malaysia, and Pakistan have formally applied for membership, while Sri Lanka is expected to submit its bid during the event. Türkiye has also expressed interest, viewing BRICS as a complementary platform to its existing partnerships. On one hand, the growing interest in BRICS will be seen as a failure of Western efforts to isolate the group, but expansion could also lead to internal divisions. The 2023 wave of new members already brought underlying tensions to the surface, particularly between China, Russia, and India. China and Russia have been eager to expand BRICS quickly, aiming to increase their influence among key developing nations – many of which see BRICS as a chance to strengthen economic ties with China. India, however, is concerned about losing its own influence if the group admits too many new members that align closely with China’s agenda. A successful expansion in Kazan could send a strong signal to the West that BRICS+ cooperation can overcome internal challenges. However, the bloc will need to improve its institutions to maintain internal cohesion and build trust among its significantly expanded membership.
5. Hungary maintains pragmatic and good relations with most BRICS member states, but this is not incompatible with its NATO and EU membership
A decade ago, the Hungarian government announced its policy of ‘Opening to the East’, followed by ‘Opening to the South’, aimed at diversifying the country’s economic relations. During the 1990s and 2000s, Budapest focused on Euro-Atlantic integration. During this time, its relations with countries in the Global South weakened, just as new economic power centres were emerging there. Over the past years, Hungary has identified the key to its progress in capitalizing on the growth of emerging economies, while continuing its collaboration with traditional Western partners. The BRICS states are seen as key partners in this regard. The bilateral relationships established with these countries are based on mutual benefits, are pragmatic, and are not influenced by ideological questions: the goal of all parties involved is fruitful economic cooperation. These relationships do not replace Hungary’s traditional partnerships with Western states; rather, Budapest seeks to build good relations with BRICS states alongside them. Budapest also has the ambition, under the framework of the Connectivity Program, to serve as a bridge between its Western partners and its partners within the BRICS group.
Written by Viktor Buzna, Péter Goreczky, Péter Kránitz, Gergely Salát & Sándor Seremet