Why You Need To Be Paying Attention

We at 7C Lingo have been working extensively with many clients, both stateside and internationally, who are constantly assessing companies and economic movements in order to get an edge in their respective fields. While assessing individual companies is always important, many of those operations are allowed to expand into international markets based on the success stories of their governments in building a robust economic policy that inspires and incentivizes growth. Because of this fact, we wanted to make sure that all industry professionals, big and small, were aware of BRICS, the economic union of several powerful developing economies, and how they can factor this rising power into their success pipeline.

What is BRICS?

BRICS, with its formation in 2006, was originally composed of four countries: Brazil, Russia, India, and China. Building on this initial composition, the group added South Africa to its ranks in 2010. THis composition remained stagnant until recently, as the organization announced in January of 2024 that it was adding an additional four states: Iran, Egypt, Ethiopia, and the United Arab Emirates.
Overall, these countries represent 45% of the total world population, and 35% of the global GDP when it comes to purchasing power. Because of recent success stories, BRICS seems poised to continue expanding, as nine other states have already achieved partner status, including Turkey, Cuba, and Vietnam. On top of that, over a dozen other states have applied to work with the union, with some high profile applicants being Pakistan, Syria, and Venezuela.

BRICS Initiatives

While BRICS has spearheaded many operations to help struggling economies, some of their most important initiatives include the following.

New Development Bank
The New Development Bank was initially established in 2015 at the suggestion of the Indian government. It was created as a way to fund developmental projects primarily for BRICS members, but is open to all United Nations members. Most of their loans are devoted to building robust and sustainable infrastructure projects, with over thirty percent of the bank’s loans going towards research and development for renewable energy sources. Other high profile investments include initiatives in transportation, water and sanitation, and urban development. Another of the stated goals of the bank is to work alongside established financial institutions, such as World Bank Group, to expand infrastructure development projects for struggling governments.

BRICS PAY

Designed as a way to ease international transactions between member states, BRICS PAY is a theoretical system that would allow member-states of BRICS to pay for projects with their own currency and have the total automatically converted to the target currency, cutting down on much of the red tape that plagues international financial projects. While the system has yet to be made, China has fully backed its construction and implementation.

BRICS Contingent Reserve Arrangement

The Contingent Reserve Arrangement, or BRICS CRA, is a kind of “safety net” for BRICS member-states, designed to offer stability to said states if they are having difficulty repaying loans from outside financial institutions, such as the International Monetary Fund. The idea is this: if a member-state is having issues paying back a loan backed by another financial institution, they can perform a central bank liquidity swap using funds deposited in the New Development Bank by all members, rather than just the funds that the individual state can raise. This allows BRICS members who are struggling to repay international loans to do so without devaluing their own currency, bringing about greater stability.

Industries That Will be Affected by BRICS

As BRICS continues to expand, certain industries have continued to be mentioned in their economic plans. If your organization is part of or relies on one of these industries, you should take note and plan for the future.

Energy

BRICS has consistently shown their interest in revolutionizing the energy sector be investing and developing novel clean energy projects. BRICS has already stated their intention to scale wind and solar energy projects to produce 1,550 Gigawatts of electricity through these methods by 2030, which would place that energy production to be nearly double that of planned fossil fuel projects. Already, the member-states have cut their dependence on fossil fuels in half in the last five years, and show no signs of stopping in the years to come. Beyond clean energy, BRICS currently accounts for forty-two percent of the world oil and gas reserves, meaning that any industry, regardless of their reliance on either clean energy or fossil fuels, will have to contend with BRICS in the near future.

Micro-Electronics

The development of micro-electronics is heavily tied to BRICS due to the economic union’s strong investment in their member-states’ mining and production sectors. Seventy-two percent of all rare earth metals like manganese and lithium, are sourced from BRICS countries. These rare earth metals are essential to the construction of computer parts like computer processing units and graphics cards. Additionally, many of these computer parts are crafted in China, furthering the importance of the economic union when it comes to global technological developments.

What can you do?

With BRICs’ success, many industries are working to expand their reach and attempt to corner this emerging international market. If you want to expand your business, here are a few tips.

  • Research the Horizontals of your Industry – In a globalized economy, you would be surprised at how much invisible international labor your industry depends on. Do some research on where all the elements that go into your product or service are developed in order to plan accordingly.
  • Develop your Business’s Cultural Intelligence – Working with an international audience can be difficult, especially if you are not in tune to that culture’s folkways and practices. Prepare your employees by working with a Cultural Intelligence consultant to ensure a smooth transition.
  • Work with a Translation and Interpretation Agency – BRICS has eight official languages and dozens of unofficial ones. Start building a relationship with a language agency in preparation.