Indonesia joins BRICS bloc as full member

 Context: Indonesia has formally joined the BRICS group, a bloc of emerging economies featuring India, Russia, China and others, viewed as a counterweight to the West.

 What is BRICS? 

• BRICS is an intergovernmental organisation comprising ten countries – Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, United Arab Emirates and Indonesia.
  • The acronym ‘BRIC’ was coined by economist Jim O'Neill in 2001.
  • Founding countries of BRIC: Brazil, Russia, India, and China. 
  • First formal BRIC summit: Held in 2009 in Yekaterinburg, Russia
  • South Africa joined BRIC in 2010, transforming BRIC to BRICS. 
• New members:
  • In 2024, four new members- Egypt, Ethiopia, Iran, and the United Arab Emirates - joined BRICS as full-time permanent members.
  • In 2025, Indonesia was admitted as a full member of the BRICS.
• BRICS was conceived as a counterweight to the Group of Seven (G7) developed economies, made up of the United States, Canada, the United Kingdom, France, Germany, Italy and Japan.

Objectives:

• To promote economic growth, strengthen cooperation in areas like trade, investment, and infrastructure.
• Coordination in global governance and advocating for reforms in institutions like the United Nations (UN) and International Monetary Fund (IMF). 
• Cultural and social exchange by enhancing people-to-people connections.

Economic Importance:

• BRICS+ represents over 45% of the world's population and accounts for around 35% of global GDP, based on purchasing power parity.
• Growing influence in global trade and investment through the New Development Bank. 
• Contingent Reserve Arrangement (CRA) under BRICS USD 100 billion CRA is established to provide financial support to member countries in times of balance of payments crises.

New Development Bank: 

• The New Development Bank (NDB) is a multilateral development bank established by BRICS.
• Objective: To mobilise resources for infrastructure and sustainable development projects in emerging markets and developing countries (EMDCs).
• Initial authorised capital: $100 billion.
• Headquarters: Shanghai, China.

BRICS as platform for South-South Cooperation:

BRICS grouping has emerged as a significant platform for fostering South-South cooperation in the evolving global order. 

• Diversified Representation: BRICS+ has included countries from Africa and Asia to enhance BRICS' representation of developing nations. Diverse BRICS gains legitimacy to advocate for Global South issues like fair-trade, climate justice, and technology access.
• Economic Collaboration: Intra-BRICS integration encompasses free trade agreements and export-oriented strategies, including tariff exemptions and reductions. This has led to trade expansion, and rise in both inward and outward foreign direct investment. 
• Financial Independence:
  • The New Development Bank (to finance infrastructure and development projects) is a credible alternative to existing financial institutions (IMF, World Bank dominated by western powers).
  • BRICS nations have agreed to promote use of local currencies in trade. E.g., UAE and India trade in Rupees and Dirhams instead of the US Dollar.
  • The plans to launch a common BRICS currency is under consideration. 
• Global Governance Reforms: BRICS have collectively called for reforms to the UN Security Council to include more representation from the Global South.
• Technology Sharing: BRICS+ members share technology particularly in areas like digital payments and renewable energy. E.g., Collaboration in digital payment systems (India’s UPI and China’s Cross-Border Payment Systems). 

Challenges faced by BRICS:

• Diverse Interests:
  • Member states have varying economic interests and geopolitical alignments which can hinder collective action. E.g., India and Brazil maintain strong ties with the US, while Russia and China adopt anti-West stances​. 
  • New members like Iran and UAE add to the ideological diversity complicating consensus-building.
• Lacks Institutional Framework: BRICS lacks formal treaty or secretariat, or enforcement mechanisms and thus relies on consensus-based decision-making​. This makes it difficult for coordination and policy implementation.
• External Pressures and Sanctions: BRICS members (particularly Russia) face economic sanctions from Western countries. This can limit their ability to cooperate and implement joint initiatives.
• Internal Economic Challenges: Some BRICS members (such as Brazil and South Africa) face significant domestic economic challenges which can divert attention from regional cooperation.

BRICS+ marks an important step toward a multipolar world and empowerment of the Global South. However, the grouping needs to overcome internal divisions, address external pressures and build a strong institutional framework to meet its long-term goals and objectives.