BRICS and Global Governance: Challenging the Western-Dominated Financial Order

BRICS global governance efforts are gaining momentum in response to a shifting geopolitical landscape and growing dissatisfaction with the Western financial order. The alliance has evolved into a dynamic bloc redefining multilateral frameworks and global economic structures.

Introduction

The BRICS grouping—comprising Brazil, Russia, India, China, and South Africa—was initially conceived in 2001 by economist Jim O’Neill of Goldman Sachs as a symbol of emerging market potential. Over the years, it has transformed from a nominal acronym into a geopolitical and economic coalition. In 2024, the group expanded to include Egypt, Ethiopia, Iran, the UAE, and Indonesia, representing an even broader swathe of the Global South.

With escalating tensions in global geopolitics—such as the Russia-Ukraine war, US-China tech rivalry, and Israel-Palestine conflict—BRICS is now being perceived as a counterweight to Western-dominated institutions like the IMF, World Bank, and G7.

Role Of BRICS In the Global Financial and Economic Order

Promoting Financial Sovereignty and De-dollarisation

• BRICS nations are advocating alternatives to dollar dominance, e.g., Brazil's President Lula da Silva questioned the need for the USD in global trade.
• The New Development Bank provides funding in local currencies, reducing dependence on Western financial systems (e.g., recent loans in ZAR, INR).
• Although India stated in March 2025 that it is not pursuing de-dollarisation, discussions around BRICS Pay and a BRICS currency continue.
• Example: Russia and China already settle large volumes of trade in yuan/Ruble, bypassing SWIFT, which has been weaponized via sanctions.
• Government Initiative: India's Unified Payments Interface (UPI) is being linked with BRICS nations for cross-border payments.

New Development Bank (NDB) and Development Financing

• NDB offers a non-conditional, alternative funding route to IMF/World Bank.
• Focuses on sustainable infrastructure and climate resilience projects.
• Case Study: In 2023, the NDB financed a solar energy project in South Africa worth $400 million.
• Indian Scheme Linkage: India’s International Solar Alliance (ISA) is being synergized with NDB’s climate investment goals.

Trade Rebalancing and Market Access

• BRICS aims to reorder global trade rules, advocating for fair trade terms for developing nations.
• At the Rio BRICS Summit 2025, there was consensus on reforming WTO mechanisms to remove bias against Global South economies.
• Example: BRICS trade ministers' pushback against WTO’s e-commerce moratorium that disadvantages developing country digital taxation.

Contesting Bretton Woods Institutions

• BRICS criticizes the voting power asymmetry at IMF and World Bank, where the US holds veto power.
• Joint efforts are being made to demand quota reforms, ensuring better representation.
• Survey: A UNCTAD report (2024) found African countries receive only 3% of global FDI despite being home to 17% of global population—cited by BRICS for systemic inequities.

Diplomatic, Strategic and Security Dimensions

Alternative Global Governance Narrative

• BRICS champions multipolarity, questioning the unilateralism of G7 or NATO-led interventions.
• The Rio Declaration (2025) criticized U.S. actions in Gaza and Iran, calling for adherence to international law.
• Example: BRICS support for Palestine statehood and non-interference doctrine at the UNGA.

Strategic Autonomy and Balanced Alliances

• India, while a member of QUAD, maintains active BRICS participation, asserting multi-alignment in foreign policy.
• South Africa leverages BRICS to balance Western-African neocolonial narratives.
• Case Study: India's simultaneous participation in G20, QUAD, SCO, and BRICS underlines strategic hedging.

Security Cooperation and Anti-Terror Frameworks

• Rio Declaration included strong language against terror financing and cross-border terrorism (including mention of Pahalgam attack).
• Example: Joint Working Groups on Counter-Terrorism and Cybersecurity established in 2023.
• Indian Scheme Linkage: India's National Cyber Security Strategy (2024) aligns with BRICS digital trust frameworks.

Reform of Global Institutions

• BRICS nations consistently call for expansion of the UN Security Council (UNSC).
• Brazil and India received full support at the 2025 Summit for greater roles in the UN system.
• Example: BRICS Foreign Ministers meeting (April 2025) stalled on African consensus over UNSC reform language—highlighting internal divergences.

Internal Challenges and Limitations to BRICS Cohesion

Geopolitical Rivalries Within BRICS

• India-China border tensions (e.g., Galwan 2020) create mutual distrust.
• Brazil's and South Africa’s pro-West tilt occasionally contrasts with China-Russia alignment.
• Example: Lack of joint communiqué at BRICS FM meet (April 2025) due to African members resisting China-led language.

Divergent Economic Systems and Priorities

• China's state-led model contrasts with India's liberal market; Russia's economy is under sanctions.
• Economic crises (e.g., in Argentina and South Africa) impact BRICS credibility.
• Real-life Data: IMF 2024 estimates show South Africa’s GDP growth at just 0.7%, affecting BRICS balance.

Operational Inefficiency and Lack of Institutional Depth

• Unlike NATO or EU, BRICS lacks a binding charter, secretariat, or permanent structure.
• NDB disbursement delays, overlapping agendas, and weak dispute mechanisms persist.
• Survey: An ORF 2024 analysis rated BRICS institutionalization at 3.1/5, citing lack of coherence.

Overreach in Expansion

• With new members like Iran and Ethiopia, ideological and strategic divergences may intensify.
• Saudi Arabia’s non-commitment reflects caution toward BRICS efficacy.
• Example: UAE’s close defence ties with the U.S. conflict with BRICS' criticism of American unilateralism.

Conclusion

While BRICS faces significant internal contradictions and operational gaps, it has undeniably carved a space in reshaping global governance narratives. The group's emphasis on inclusive growth, reform of multilateral institutions, and multipolarity is particularly relevant as the Global South seeks greater representation.

As India prepares to lead BRICS in 2026, its balanced diplomacy and Digital Public Infrastructure (DPI) model (recognized by the World Bank’s G2Px Report) can act as a template for collaborative, resilient, and inclusive governance.