BRICS: The Swan Song

By: Beatrice E. Rangel - 09/07/2025

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The annual meeting of the BRICS group in Rio de Janeiro leaves all observers of international affairs with the strong feeling that we have witnessed the beginning of the end of this multinational grouping. Signs of dissolution were perceptible in the attendance. China, the new and powerful global player, sent its Prime Minister while the President remained in Beijing, showing no signs of facing a complicated situation that kept him at home. And the Prime Minister recused himself from approving a set of initiatives presented by the host country, considering them to be matters within presidential jurisdiction.

New Development Bank President Wilma Rousseff delivered a bureaucratic report highlighting the growth in the number of projects, the entry of Colombia and Uzbekistan, and indicating that while some nations in the Global South have preferred to finance development projects in local currency, the dollar's share in international transactions has not diminished.

In this statement by Rousseff lies the key to the dissolution process. Because, in a somewhat ill-considered manner, Brazilian President Innacio Lula da Silva decided to become Russia's pawn in the campaign to reduce the dollar's participation in international transactions. The issue fell like a stone in the abyss among the other members of the group, given that China holds dollars in its international reserves and $778 billion in US Treasury bonds alone. India, for its part, has 14% of its international reserves denominated in dollars, and Brazil, the country of which Luis presides, holds 62% of its reserves in dollars. Thus, a dollar substitution would directly affect the value of the reserves of all the main members of the BRIC group, and as Lord Callaghan said, "Any political crusade dissolves when it affects the pockets of the participants."

And to add pressure to the tension, President Trump openly declared that any country joining the BRIC would be subject to a 10% tariff on its exports to the US to begin with. Given that the stagnation of European economies, China's slowing growth rate, and Japan's economic paralysis make the North American market the only dynamic and growing one, I see the list of candidates for BRIC entry shrinking significantly.

Thus ends one of the most daring economic forecasts of the beginning of this century. Indeed, economist Jim O'Neill of the American bank Goldman Sachs predicted in an article titled "Building Better Global Economic Building Blocks" in 2001 that Brazil, India, China, and Russia (BRIC) would be among the world's most powerful economies this century. The prediction came true in the cases of China and India, but in the cases of Brazil and Russia, not only did they fail to achieve their goal, but they are clearly regressing.

If Lula's policies of boosting public spending without increasing revenue continue, and Putin's policies of occupying Ukraine continue, both nations could face major systemic shocks, with the resulting consequences for Europe and Latin America.

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