Thibault Rabiller ees8re PLCP 3130

The BRICS effect for Brazil and South Africa

Introduction

In 2005 Brazil was a rapidly developing economy after recovering from the 1998
crisis and it was looking to create strong alliances to keep this development strong. 1 The
country allied with India, China, and Russia to form the BRICS alliance, and they were then
joined by South Africa in 2010. South Africa was going through a strong phase of
development between 2005 and 2010 with its percentage of population living under the
poverty line receding from 68% in 2005 to 57%in 2010.2 This gave a strong incentive for
South Africa to join BRICS as well as for BRICS to welcome South Africa in its ranks. It also
allowed the BRICS alliance to now be present in South America, Asia, and Africa, the three
continents with the most developing nations. The World System Theory published by Chirot
postulates that Brazil and South Africa are semi-peripheral states. A cooperation such as
BRICS is the opportunity to allow these two countries to leverage their positions and
eventually reach the status of Core nation. Has the BRICS alliance helped Brazil and South
Africa towards the status of core nations?

Relevant Theory

According to the World System Theory, Chirot believes Wallerstein in some of his
works suggests that core countries are the upper class of countries, and semi periphery
countries are the middle class of countries 3. Chirot explains that there are categories of

1
https://www.imf.org/external/pubs/ft/fandd/2005/06/fonseca.htm
2
https://www.worldbank.org/en/country/southafrica/overview
3
Chirot, Daniel, and Thomas D. Hall. “World-System Theory.” Annual Review of Sociology, vol. 8, 1982, pp. 81–
106. JSTOR, http://www.jstor.org/stable/2945989. Accessed 14 Mar. 2024. P85.

1
Thibault Rabiller ees8re PLCP 3130

countries, with core nations being the most developed. This theory suggest that “ Core
countries are wealthy, militarily strong, and hold significant social power and colonial
power.”4 The theory also states that “Peripheral countries are poor, have exploitable
resources, and do not possess great social stability or government.” And that semi
peripheral countries have some characteristics of both archetypes, but do not belong to
either, thus why they would be the middle class of countries, living comfortably, but not at
the top of society. For a country to move from a semi peripheral state to a core state, it
needs to improve on economic diversity, technology, sustainable development as well as
peace and security. The BRICS had for goal when it was instituted to help the members
achieve these goals.5 The BRICS organization is one that is made for the purpose of having
a strong alliance and opportunities to collaborate to enhance their bargaining power in the
world economy. The theory also suggests it would allow for more investments and an
improved attractiveness. The alliance should additionally bring joint initiatives with
countries such as China which would therefore accelerate the development of both
countries. However, the status of core nation is complex to acquire and one that would
take time to achieve.

Brazil

Brazil has joined BRICS when it started in 2006. Therefore, according to the World
system theory an impact on its GPD per capita should be expected after a few years. An
impact that would be greater than the changes in the same GDP per capita before the
BRICS alliance.

4
https://study.com/learn/lesson/world-systems-theory-
wallerstein.html#:~:text=World%20systems%20theory%20took%20the,great%20social%20stability%20or%
20government.
5
https://www.investopedia.com/terms/b/brics.asp#:~:text=BRICS%20refers%20to%20certain%20emerging,
counterbalance%20to%20traditional%20Western%20influence.

2
Thibault Rabiller ees8re PLCP 3130

fig 1.16

Figure 1.1 is a table showing the evolution of the GDP, GDP per capita and
population of Brazil between 2003 and 2022. In this table, the data that is important to
compare is the change in GDP to the change in populations in the last 3 years before
joining BRICS and then in the years after joining BRICS. On average in the last 3 years
before joining BRICS the GDP changed by 3.37% whilst the population changed by 1.15%.
This means the GDP increase was 2.9 times more important over this period of time than
the population change. Considering there was a major crisis in 2008 and that there should
not be expectations of results for the first 5 years of joining such an alliance, the
comparison will be made with the data from 2012 to 2018. This gives an average growth of
GDP of 0.24% per year. The change is population is 0.84% per year. This means the
increase in GDP was less than a third (0.28) of the increase in population in that time in
Brazil. In terms of absolute value, looking at the table the GDP per capita has increased by

6
https://www.worldometers.info/gdp/brazil-gdp/

3
Thibault Rabiller ees8re PLCP 3130

around 1300$ since joining the BRICS, but when looking in terms of percentage, Brazil has
its economic development and growth slowed down since joining the BRICS, even when
not accounting the years in which the 2008 crisis happened, or the years affected by
COVID. It is however important to understand that this data is limited over 7 years and that
the data it is compared to is a sample of only the last three years before joining BRICS,
which were established earlier to be years in which the Brazil economy had started
flourishing again after a crisis in 1998. This data also does not account for a potential
support of the BRICS nation that could have helped maintain a stability or avoid crisis that
would not have been possible without the alliance. FIrgure 1.2 shows that the alliance has
allowed Brazil to increase its exports as a % of GDP from 14% in 2006 to 20% in 2022,
which brings nuance and explains that the growth and development do not show only in
GDP statistics.

fig1.27

7
https://www.macrotrends.net/global-metrics/countries/BRA/brazil/exports

4
Thibault Rabiller ees8re PLCP 3130

South Africa
South Africa entered the BRICS alliance in 2010, after 5 consecutive years of
encouraging economic results. Figure 2.1 shows the GDP per capita in $ evolution of South
Africa in those 5 years before joining BRICS and since joining BRICS until 2022. This Chart
indicates a volatile GDP per capita and despite seeing a general increase from 2010 to
2018, BRICS does not seem to have had a strong impact nor to have helped with the
volatility of the country’s GDP per capita. However like Brazil, this data is flawed in the way
that it is only over a short number of years and development does not reflect perfectly in
the evolution of the GDP per capita of a country.

fig 2.18

8
https://www.statista.com/statistics/578853/gross-domestic-product-gdp-per-capita-in-south-africa/

5
Thibault Rabiller ees8re PLCP 3130

fig2.29

This is even further amplified by the same effect as Brazil. Following their addition to
the BRICS alliance, South Africa saw their total exports increase, but also their exports as a
percentage of their GDP jump from 26% in 2010, to 33% in 2022(figure 2.2), showing that
the BRICS alliance has had an impact on the development of certain areas of the economy.
Additionally with exports taking such an important place in the South African economy,
having allies such as India and China will be crucial for the long-term economic
development of the country.

BRICS alliance
Looking at these statistics, it is crucial to understand that GDP and GDP per capita
as well as their growth are important factors in measuring the economic development of a
country, but that they are more relevant in a long-term explanation than a short terms,
whilst an increase in export will happen with faster effects following an economic alliance.
The GDP at purchasing power parity however is another index that can give good ideas of

9
https://www.macrotrends.net/global-metrics/countries/ZAF/south-africa/exports

6
Thibault Rabiller ees8re PLCP 3130

how well a country is developing especially in comparison to others. Looking at figure 3.1
and 3.2 there is a clear gap closing between the G7 and the BRICS country which indicates
a fast development of the BRICS countries, however when looking into a country basis,
Brazil and South Africa have seen their share decrease every year since 2006 until 2022.

fig 3.1

fig3.210

10
https://www.visualcapitalist.com/cp/animated-chart-g7-vs-brics-by-gdp-ppp/

7
Thibault Rabiller ees8re PLCP 3130

Conclusion
The analysis and data show a trend of the BRICS alliance being a beacon for
economic development, with increased exports in Brazil and South Africa as well as the
BRICS GDP at purchasing power parity percentage increasing through the years. It does
seem that this increase in development however is geared towards benefitting the bigger
countries in the alliance such as China. China and India have used this opportunity to
increase their status and reach or get closer to reaching the status of Core Nation. The
BRICS alliance seems to not be working towards the immediate development of Brazil and
South Africa; however, the alliance has existed for less than 20 years and therefore its long-
term impact is going to take some time to appear. It is also important to keep in mind that
the best way for China India and Russia to help Brazil and South Africa would be to be in the
core nation position themselves. The sample size is also quite small as it is an alliance of
only 5 nations over 15-20 years. It will become easier to understand whether an alliance
like this can allow countries to more from semi-peripheral to core nations, especially with a
lot of developing countries being mentioned as potential new additions due to their
disappointment in the management of the COVID crisis. With more countries and more
economies joining in, the opportunities for diversification of exports and technology should
rise for countries such as Brazil and South Africa, allowing them to look towards rising to
the status of Core Nation.

I have neither given nor received unauthorized aid in writing this paper. Thibault Rabiller

Resources:

8
Thibault Rabiller ees8re PLCP 3130

Direct references in order:

• https://www.imf.org/external/pubs/ft/fandd/2005/06/fonseca.htm
• https://www.worldbank.org/en/country/southafrica/overview
• Chirot, Daniel, and Thomas D. Hall. “World-System Theory.” Annual Review of
Sociology, vol. 8, 1982, pp. 81–106. JSTOR, http://www.jstor.org/stable/2945989.
Accessed 14 Mar. 2024. P85.
• https://study.com/learn/lesson/world-systems-theory-
wallerstein.html#:~:text=World%20systems%20theory%20took%20the,great%20so
cial%20stability%20or%20government.
• https://www.investopedia.com/terms/b/brics.asp#:~:text=BRICS%20refers%20to%
20certain%20emerging,counterbalance%20to%20traditional%20Western%20influe
nce.
• https://www.worldometers.info/gdp/brazil-gdp/
• https://www.macrotrends.net/global-metrics/countries/BRA/brazil/exports
• https://www.statista.com/statistics/578853/gross-domestic-product-gdp-per-
capita-in-south-africa/
• https://www.macrotrends.net/global-metrics/countries/ZAF/south-africa/exports
• https://www.visualcapitalist.com/cp/animated-chart-g7-vs-brics-by-gdp-ppp/

Other resources:

• https://www.reuters.com/world/what-is-brics-who-are-its-members-2023-08-21/
• https://www.statista.com/statistics/254281/gdp-of-the-bric-countries/
• https://www.imf.org/en/Publications/WP/Issues/2024/03/08/Strengthening-
Income-Stabilization-through-Social-Protection-in-Emerging-and-Developing-
545498
• https://www.taylorfrancis.com/chapters/edit/10.4324/9780429507946-7/brazil-
emerging-power-ra%C3%BAl-bernal-meza
• https://www.dfat.gov.au/trade/organisations/g20#:~:text=The%20members%20of%
20the%20G20,Union%20and%20the%20European%20Union.
• https://infobrics.org/page/history-of-brics/