1. Formed on paper https://www.cnbc.

com/id/44006382

Actually, the BRICS were first formed on paper rather than as a real group. Here's how it started. The
acronym has been attributed to Goldman Sachs chief economist Jim O'Neill in a 2001 paper he wrote
called, "Building Better Global Economic BRICs." In his paper, O'Neill argued that since the four BRIC
countries were developing rapidly, by 2050 their combined economies could eclipse all the
economies of the richest countries in the world. The BRICS acronym has come to be used as a
symbol of the shift in global economic power away from the developed G7 economies—like the U.S.
—and toward the developing world. The five nations if combined would be the largest entity on the
global stage, according to Goldman Sachs, which has continued to monitor the four countries since
2001. They are considered among the biggest and fastest growing emerging markets, or those
markets still developing. Many analysts consider the BRICS a good place for investment because of
their growing populations, infrastructure building, and expansive middle class.

2. What makes the BRIC countries powerful?

The BRICS have a lot going for them. These countries encompass

over 25% of the world's land coverage and 40% of the world's
population and hold a combined gross domestic product or GDP of
18.5 trillion dollars
– As of 2014, the five BRICS countries represent almost 3 billion people, or
approximately 40% of the world population.

– The five nations have a combined nominal GDP of US$16.039 trillion, equivalent to
approximately 20% of the gross world product,

– They have an estimated US$4 trillion in combined foreign reserves.

Brazil's resources include massive amounts of oil, along with large supplies of agricultural products.
Russia, too, has great repositories of oil, along with coal and natural gas. India has iron ore, bauxite,
and copper ore and is one of the major producers of iron in the world.South Africa is the largest
energy producer and consumer on the African continent. In addition to diamonds and gold, the
country also has reserves of iron ore, platinum, manganese, chromium, copper, uranium, silver,
beryllium, and titanium. China has coal, iron ore, petroleum, natural gas, mercury, rare earth
elements, uranium, and the world's largest potential for hydropower. Also world’s largest exporter.

3. History of Brics

BRICS is the acronym coined for an association of five major emerging national economies: Brazil,
Russia, India, China and South Africa. Originally the first four were grouped as "BRIC" (or "the
BRICs"), before the induction of South Africa in 2010. The BRICS members are known for their
significant influence on regional affairs; all are members of G20.
It was the Russian side that initiated the creation of BRICS. On 20 September 2006, the first BRICS
Ministerial Meeting was held at the proposal of Russian President Vladimir Putin on the margins of
a UN General Assembly Session in New York.

The growing economic might of BRICS countries, their significance as one of the main driving
forces of global economic development, their substantial population and abundant natural
resources form the foundation of their influence on the international scene.

BIRCS forum was formed in 2011

4. New Development Bank - to provide infrastructure financing to BRICS members and other
developing countries

The backdrop to its creation is rooted in the real and continuing power shift in the
international system, from the developed industrialized world towards emerging market
economies

President: K.V. Kamath - former chairman of infosys

Parent organization: BRICS
Headquarters: Shanghai

 Multilateral development bank operated by the BRICS states and

Formed as an alternative to the existing American and European –
dominated world bank and IMF.
 Unlike world bank ,Each participant country holds an equal shares and
equal voting rights in the banks management regardless of the GDP
size.
 Proposed by india at the 4th BRICS summit in 2012 and Formed on july
2014 and came in to force in july 2015.

Objectives:

 To support infrastructure and sustainable development projects , public and

private in the BRICS and other major emerging economies and developing
countries.

 Establish an extensive network of global partnerships with other multilateral development

institutions and national development banks.
 Build a balanced project portfolio giving a proper respect to their geographic location,
financing requirements and other factors.
 Fostering development of member countries.
 Supporting economic growth.
 Promoting competitiveness and facilitating job creation.
 Building a knowledge sharing platform among developing countries.

Need of a BRICS bank

1. Global financial institutions like IMF and world bank are dominated by U.S and western
countries

2. IMF and world bank follows different voting power based on quota system. Though China
is second largest economy after U.S it has fewer voting rights.

3. The financial institution created by BRICS will reduce the importance of US dollar as a
global currency and eventually it will increase importance of Yuan

4. IMF cash assistance program is conditional. If a country's foreign policy clashes with US
then it will be difficult to obtain a loan.

5. It will provide resources for infrastructure development of developing countries.

5. Objectives of BRICS

 To achieve regional development

 The BRICS group also acts as a bridge between developed and
developing countries. For example, in the WTO, the BRICS countries
are trying to promote a fair order regarding agricultural policies.
They are attempting to promote the liberalization of the
international economic order to diminish agricultural subsidies in
the United States and the European Union, which would make
developing countries’ agricultural products more competitive.
 The BRICS group will also play an increasingly important role in
assisting developing countries in gaining an advantage in trade and
climate change negotiations, as well as on issues related to the
export of manufacturing products.
 They have a shared interest in challenging the current governance
of Western financial institutions like the International Monetary
Fund and the World Bank for that they have announced the
establishment of the bank
 The BRICS also formed an information-sharing and exchange
platform that expands beyond economic cooperation to also involve
educational, cultural, and environmental engagement.