BRICS: The Global South as the New West
The economic downturn and political instability in a number of Western countries are making the rapidly developing markets of the BRICS countries increasingly attractive to entrepreneurs and investors. Let's try to understand the main reasons.
The Growth Factor
The economies of the BRICS countries are among the fastest-growing in the world. Currently, according to the International Institute for Middle East and Balkan Studies (IFIMES), the collective contribution of the BRICS countries to the global economy is about 32%, which is 2% more than the contribution of the G7 group to the global GDP (30%). According to IFIMES forecasts, by 2040, the total share of the bloc's countries in global GDP will exceed 50%.
What is behind this growth? First, the population of the member countries is increasing. Thus, local labour markets are becoming more attractive and competitive on both regional and global scales. A growing number of multinational corporations are relocating their production here. At the same time, the wealth of citizens is increasing, expanding the middle class with high consumer potential. All this creates a vast market for both mass-market products and high-tech solutions and infrastructure projects.
Most of the BRICS countries invest significant funds in science and education. Steps aimed at the theoretical development of technologies and the practical implementation of innovations create a favourable environment for the creation and development of technological startups.
A Winning Position
Another important component of the explosive growth of BRICS is the strategically important geographical position of the member countries, which gives them unimpeded access, and in some cases full control, over key regional markets and trade routes. These include the Suez Canal, the Bab-el-Mandeb and the Strait of Hormuz, as well as the Persian Gulf. Businesses that have access to these markets and trade routes can significantly reduce their logistical costs and diversify risks.
It's also worth noting that the geography of BRICS, among other advantages, gives these countries access to the richest deposits of natural resources such as oil, gas, coal, and metals, including rare earths. The climatic conditions allow for the production of a major share of critically important agricultural products. Doing business with and within these countries means having priority access to these resources.
A Policy of Stability
Despite internal and external challenges, the BRICS countries remain some of the most stable from both political and economic points of view. This creates a favourable environment for long-term investments and strategic business development. In addition to this, the governments of many of these countries are actively improving their legislative and regulatory frameworks, liberalising tax codes to attract and protect foreign capitals. For example, Brazil and India have already announced reforms of their tax and labour laws, which will make the countries more welcoming to foreign investors.
In recent years, BRICS has been actively expanding, and, even as an informal international club, it is becoming an increasingly influential and authoritative organisation and a new global politico-economic centre of gravity. Countries of the Global South see BRICS as an inclusive structure, devoid of ideology and excessive politicisation; a union that prioritises principles of multipolarity, equality, fair distribution of goods and resources. For these countries, as well as for global business, cooperation with BRICS is an opportunity to join a large and successful organisation and receive a new development impulse.