BRICS the outlooks: obstacles and opportunities

A look to 2025 and beyond:

BRICS was formed around 2006, with the purpose of reshaping the framework of the global economic landscape and reducing reliance on the American dollar. It is comprised of Brazil, Russia, India, China and South Africa.

Evidently, these countries have various challenges, grasping insight into how the BRICS economic governance will work, going forward will be imperative for institutions, western governments and investors.

Economic outlook:

Over the years, challenges and opportunities have presented themselves to the collective emerging economies. China, the now global power and largest economy among these countries (by GDP), consistently produces growth, grabbing the attention of the West. China is at the forefront of cutting edge technology as a hub for cheap labour, outsourcing and more- however it will be interesting to see whether upcoming US sanctions on imports from the country will affect China’s growth this year. 

India, also attracting the West's attention, aligns  itself with the spirit of innovation, and is firmly positioned with a major seat at the table. Again their ability to provide low-cost outsourced alternatives for other country’s staffing needs, as well as being a hub for clothing, food and natural resources has strengthened their global financial position, it will be interesting to see whether additional exporting requirements due to political shifts will sway in India’s favour in 2025. 

Brazil and Russia are rich in natural resources, finding themselves wrestling with political internal issues, as well as inflation. Additionally, Russia's decision to make a military move on Ukraine has yielded geopolitical problems. In 2025, we can’t see much change for these components of the BRICs as these problems reign on.

South Africa, faced with energy and infrastructure problems due to governmental corruption, still remains suitably positioned as an investment gateway to the rest of the African continent.

The bumpy road ahead:

• Economies within BRICS are still vulnerable to global economic turmoil, international hostilities surrounding trade, military conflicts, and the scars left over from COVID-19 global shutdown. Such factors can prevent economic growth and prosperity.

• Reforms: the BRICS members often encounter challenges surrounding reform, bureaucratic pressures, the absence of sufficient infrastructure, and poor labor markets. Firmly committed to reforming and improving these problems will help foster innovation and improve economic development.

• Financial Inequality: With the acknowledgment of a rising middle class in emerging economies, income inequality continues to plague the BRICS nations. Huge, noticeable income gaps inhibit collective belief, putting a stranglehold on consumer spending. This in turn allows for a much slower growth rate.

• Environmental outlook: the negative impacts of climate change have forced the BRICS nations to collectively commit to industrial scale cooperation regarding environmental sustainability. Migrating over to alternative energy sources and focusing on the prevention of air and water pollution. Allowing for such cooperation will help drive prosperity within these countries, financial and environmental.

• Digital improvements and development: These nations, especially India and China, have problems solving, rapidly evolving tech sector. This sector is fuelled by a young workforce, ambitious and innovative. Excepting the digital world leads to the creation of huge opportunities to grow productively and usher in a new generation of entrepreneurs.

• Infrastructure improvements: Financing new projects remains a top priority for the emerging economies. China's Belt and Road Initiative along with India's Smart Cities Mission clearly demonstrates that infrastructure development and innovation are vital at helping produce sustainable growth.

• Trade deals and investment opportunities: Collaboration between countries will boost trade and investment ties, trust between countries will increase resilience and curb the need for trade between external markets. Forming a partnership and agreeing upon de-dollarisation will benefit the trading block as a whole.

• Investing in citizens: Directing funds into health care services, schools and sufficiently working transportation will in turn, increase the likelihood of a strong and successful labour market. This is vital for economic growth.

Conclusion

It would appear that at some point in the future, if the BRICS nations continue to implement economic trust, and all goes smoothly, there may well be a noticeable change in the geopolitical landscape which will be felt throughout the world.

The Western, Atlantic system of the past will be particularly put to the test.