Since the BRICs acronym was first developed in 2001, the BRICS have been a symbol for economic growth and an increasingly global economy. Until recently, the five BRICS countries all enjoyed above average growth rates, and were seen as the leading emerging economies in the world. The acronym originally referred to four countries, Brazil, Russia, India, and China, until 2010, when South Africa was added to complete the acronym. Recently, the BRICS have seen their high growth rates decrease, and in Russia and Brazil, historic recessions are crippling their economies. Through these uneasy times, the BRICS development bank hopes to renew some growth in the slumping economies.
Established last year, the BRICS development bank hoped to complement the existing structure of investment banks by giving emerging and developing economies more of a voice in the international lending market. With an initial capital investment of $50 billion, the bank planned on immediately investing in new infrastructure projects in the five BRICS countries. Just last month, the bank announced plans to begin making loans for projects, with a focus on environmental sustainability. The first loan is expected to go to India to assist a new solar energy project, while projects in each of the other four countries are also being finalized.
The success of the development bank could depend largely on how the BRICS economies are able to respond to their recent economic downturn. Besides India, the other four economies have seen significant slowdowns in growth, leading governmental officials to worry about the long term effects of the economic downturn. Some economists wonder if the incredibly high growth rates seen in the beginning of the decade can ever return for the BRICS countries, as new economies such as Mexico and the Philippines become the new centers for rapid growth and economic expansion. The development bank hopes to maintain the BRICS importance among emerging markets, and hopefully in the future, propel the group into a major player in the global economy.