The world economy consists of a web of nations filled with different interests, various economic structures, and variable development paths. The BRICS (Brazil, Russia, India, China and South Africa) is one of the prominent organisations shaping the international economic landscape, whereas the OECD (Organisation for Economic Cooperation and Development) is another one.
Though both groups serve important roles in global economic governance, their membership, goals, and methods of international cooperation are quite different. BRICS, however, are viewed from a broader angle as a complement to OECD in which they can provide a counter world to the developed economies and promote a more all-inclusive and diverse global development.
The economic features of OECD member states are also similar, a high GDP per capita, advanced technological infrastructure and a well-developed financial system
The OECD was set up in 1961 as a club of those advanced economies. Its member countries are primarily economically developed countries with a market economy and relatively high per capita income. The principles upon which the organization was founded were based on economic cooperation and support for policies that ensure growth and global economic stability. The OECD is an organisation with 38 countries as its members in Europe, North America, and some parts of the Asia Pacific region. The economic features of these member states are also very similar: a high GDP per capita, advanced technological infrastructure and a well-developed financial system.
The countries of the BRICS (Brazil, Russia, India, China and South Africa) are countries of high economic growth, large populations and emerging markets
BRICS is a much newer formation. In 2010, following South Africa’s inclusion, it was established as an official group after being coined initially as BRIC (without South Africa) by economist Jim O’Neill in 2001. The countries of the BRICS (Brazil, Russia, India, China, and South Africa) are countries of high economic growth, large populations, and emerging markets.
The countries are spread across the continents and have various political systems, but they all have similar development, poverty reduction, and building of infrastructure challenges or opportunities. Although the BRICS nations themselves are not on a par with OECD members in respect of economic development, they are major actors in the global trade, investment, and finance scenes.
BRICS is one of the major ways by which BRICS complements the OECD; it finds an alternative model of development. The OECD is basically a group of industrialized nations that have taken the capitalist development path and are focused on market-based growth, high technology, and advanced services sectors. They have now attained an economic maturity that enables them to focus on issues like sustainable development, protection of the environment and industries based on knowledge.
The focus of the OECD is to sustain high income economies, and the focus of the BRICS is to enable developing economies to come to their full potential
Modelling by contrast estimates that BRICS countries continue to be in various levels of development, and significant characteristics of their economies are agriculture, natural resources and manufacturing. Nevertheless, these countries are quickly becoming diversified economies with China and India quickly becoming global technology powerhouses. BRICS nations are more concerned with matters such as poverty reduction, income inequality and development of infrastructure.
BRICS offers a complementary model of pursing policies in favour of social welfare and long-term development goals on top of a more market-driven model proposed by the OECD. So, vertically, these picture two sides of the coin; the focus of the OECD is to sustain high-income economies, and the focus of the BRICS is to enable developing economies to come to their full potential.
There is also a space in which BRICS fills the gap left by the OECD, specifically in global governance. However, the OECD is established and basically represents the interests of the developed economies. In this sense, it constitutes an essential factor in shaping the policies on trade, finance, and development of the member countries in the international arena. However, its influence has been criticized for not being large enough in impact to consider the interest of emerging economies or the Global South. Some of this lack of inclusivity has made for a disenfranchised brand of developing nations that maintain that the global economic policy tends to privilege the ‘big’ countries.
BRICS is a collective voice for the Global South. The group advocates for reforms at the level of international institutions
In contrast, BRICS is a collective voice for the Global South. The group advocates for reforms at the level of international institutions, such as the International Monetary Fund (IMF) and the World Bank, to register the growing economic power of the emerging markets. Creation of the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA) by BRICS. By doing so, BRICS complements the OECD to facilitate emerging economies to set some sense in global economic policies.
Also, trade and investment flows illustrate the complementary roles of BRICS and OECD in the economy of the world. OECD member countries are important international traders, especially in high-value sectors such as finance, technology, and manufacturing. These are also the major sources of foreign direct investment (FDI) and possess the desired financial resources to culminate the process of economic integration across borders.
Nevertheless, because of the changes in the global economic movement, there is an increased importance of emerging economies, including China and India, as the sources of growth and investment. BRICS countries have become important consumers and producers of goods and services because of the rapid expansion of their economies.
The growing economic clout of BRICS nations has led them to announce increased trade between the active trade bloc and other emerging markets. These countries have deliberately fostered greater financial and economic cooperation beyond traditional Western-dominated institutions by creating alternative trade and investment frameworks such as the BRICS New Development Bank as well as the Asian Infrastructure Investment Bank or AIIB. OECD countries still occupy a considerable part of the world trade and the world investment, but the increasing weight of BRICS promises it a fairer involvement and participation in global economic growth.
BRICS serves emerging economies to create their own future and play a role in global development
Though the OECD emphasizes knowledge interchange and development in its member countries, BRICS is a gigantic cultural exchange and collaborative route to technological growth that is generally broader and more inclusive than the OECD approach. For instance, China and India have made great progress in the areas of digital technology and innovation, which in its turn, boosted the world adoption of artificial intelligence, renewable energy and e-commerce. BRICS nations are collaborating on education, technology and health fronts, thus enabling the sharing of resources and ideas between the nations as they improve each other’s economies and contribute to the development of the whole world.
By collaborating, BRICS nations determine chances for cross-cultural debates and the distribution of technological discoveries otherwise limited to the developed world. The reach of innovation is broadened, and the progress is to benefit everyone on the planet.
Despite their difference in composition, goals, and emphasis, BRICS and the OECD, to all extent and purposes, are mutually complementary forces in the global economy. The OECD primarily focuses on servicing developed nations and seeks to maintain mature economies, while BRICS serves emerging economies to create their future and play a role in global development. Together, they comprise a balanced and dynamic global economic order that features citizens’ needs of both developed and developing nations.
Disclaimer: The opinions expressed in this article are solely those of the author. They do not represent the views, beliefs, or policies of the Stratheia.
