No longer just a catchy acronym - initially designed to assist institutional investors in exploring new investment opportunities in the developing world - the BRIC grouping (Brazil, Russia, India, China) has emerged as a serious contender on the global stage. To expand their geographical scope, the BRIC, which began their first summit in 2009, became BRICS by admitting South Africa to their group in 2011.
Within a decade from the publication of Goldman Sachs' economist Jim O'Neill's paper, Building Better Global Economic BRICS, the world's leading emerging powers have gradually established alternative global institutions to the western-dominated Bretton Woods system. During their latest summit in Brazil, they agreed to establish a New Development Bank (NDB), with a staggering $100bn in its coffers. The NDB is poised to finance infrastructure and development projects across the developing world with a focus on sustainable development, where the emphasis will be more on job creation and poverty alleviation.
Bearing in mind the debilitating impact of the 2007-2008 Great Recession, and earlier episodes of debt crises across the developing world, the BRICS have also created a joint cushion against prospective disruptions in global capital markets by establishing a $100bn Contingent Reserve Arrangement (CRA), allowing member countries to access much-needed funds during crisis periods. The CRA's greater relevance lies in the fact that it paves the way for emerging powers to pool their massive foreign exchange reserves together, giving them greater flexibility in crafting their national monetary policies as well as enhancing their leverage in global financial markets.
The BRICS' rising global prominence, however, doesn't necessarily reflect the emerging powers' determination to upend the existing liberal international order. After all, China and India have been among the biggest beneficiaries of economic globalisation, absorbing unprecedented amounts of foreign direct investments (FDIs) in recent decades. Commodity-driven economies of South Africa, Russia, and Brazil, in turn, are largely dependent on continued expansion in rapidly developing countries such as China as well as the more traditional western markets.
The BRICS' aim, instead, is to complement the existing gaps in the global financial system, lobby for greater influence in International Financial Institutions (IFIs), and provide an alternative voice to the West on international security issues, ranging from the Iranian nuclear programme to the Israel-Palestine conflict. But given the sheer dominance of China within the grouping, there is a lingering concern that the BRICS will end up reinforcing Beijing's purported battle for global dominance.
Global south 2.0
The BRICS combined Gross Domestic Product (GDP) rivals that of the US and the European Union or EU. By contributing to almost 50 percent of world GDP growth in the past decade, they have practically served as the locomotive of global economic expansion.
The BRICS dwarf the West in terms of demographics and geographical scope, encompassing 46 percent of the world's population and 26 percent of its land mass. In many ways, one could argue that the BRICS is a better reflection of the international community than many global institutions, particularly the World Bank and the International Monetary Fund, which continue to be dominated by the triangular alliance of Washington, Tokyo, and Brussels.
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In the heady aftermath of the 2007-2008 Great Recession, the Obama administration took the fateful decision to transform the G20 - the grouping of the world's 20 most influential economies - into the primary platform for coordinating global economic policies. The decision effectively ended the controversial reign of the G8 - a club of primarily western industrial powers - which became increasingly anachronistic in a multipolar global economy.
The elevation of the G20, which encompasses most non-western powers, was supposed to be followed up by greater reforms within the IFIs, which stubbornly fail to reflect the rising economic contribution of emerging powers such as China. The G20's greatest achievement was the prevention of a global economic depression by facilitating the coordination of counter-cyclical economic measures among the world's leading nations.
But western powers continued to resist any major reforms in the international system, with the IMF and World Bank still dominated by Brussels and the US: The heads of the IMF and World Bank are still, respectively, European and American, while China's (the world's second largest economy) voting shares in the IMF are comparable to European countries. The BRICS establishment of their own NDB and CRA is an attempt to directly challenge the existing order, pressuring the West to consider deeper reforms in the IFIs.
Unlike the Non-Aligned Movement (NAM), a largely symbolic gathering of the developing world, the BRICS has displayed greater internal coherence and geopolitical heft. The BRICS is a potent expression of 20th century third-world and south-to-south solidarity movements in the 21st century. In short, the BRICS reflects a more muscular and assertive global south. Down the road, other emerging powers such as Indonesia, Mexico, Turkey, and Iran could also chip in. Therefore, the BRICs could represent the beginning of a new end, as non-western powers demand greater voice within the existing the global architecture of governance.
A global 'Beijing Consensus'?
A deeper look at the BRICS, however, reveals a more complicated picture. China overwhelmingly outshines all its peers. China's GDP, poised to be the world's biggest in coming months, and foreign exchange reserves, standing at almost $4 trillion, is greater than those of India, Russia, and Brazil combined.
It was precisely such undisputable dominance that encouraged India to vociferously oppose, among other things, China's plans to place the NDB headquarters in Shanghai - a top contender to replace New York as the world's financial center in coming decades.
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China's contribution to the CRA ($41bn) also dwarfs the contribution of other members. While the BRICS have sought to strike a compromise on the management of the NDB and CRA - for instance, India will serve as the first president of the NDB, with Brazil and Russia heading the board of directors and governors, respectively - China will undoubtedly hold huge sway - if not a de facto veto - over the direction of BRICS' development programmes.
In recent decades, China has already presented a direct challenge to the Bretton Woods system by establishing what Sinologist Joshua Cooper Ramo calls the "Beijing Consensus". To quench its voracious appetite for raw materials, China has strategically deployed massive amounts of soft loans and development aid across the world, especially Latin America, Southeast Asia and Africa, without any stringent demands for political and macroeconomic reforms from recipient countries.
This has allowed China to become major player in the global extractive industry, a top trading partner for commodity-driven economies, and a key source of infrastructure funds and technology for much of the developing world.
Confronting western sanctions over the Ukrainian crisis, Russia has become increasingly more dependent on China in terms of energy trade and capital. For Brazil, South Africa, and India, which are contending with a combination of economic downturn and domestic political discontent, China has become an even more indispensable economic partner. Relishing its global economic dominance, China has become more territorially ambitious, pushing its maritime claims across the Western Pacific with greater assertiveness - and relentlessly pursuing its vision of becoming America's sole global peer.
Overall, the BRICS' new development institutions carry the promise of becoming major sources of capital for the developing world, which is in dire need of infrastructural development. But China's dominance within the grouping could complicate their professed goals for establishing a democratic global architecture of governance. Quite ironically, an internally imbalanced BRICS has sought to create a more balanced global order.
Richard Javad Heydarian is a specialist in Asian geopolitical/economic affairs and author of How Capitalism Failed the Arab World:The Economic Roots and Precarious Future of Middle East Uprisings.
Follow him on Twitter: @Richeydarian
The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial policy.