Brics Investment Platform as a Connectivity Enhancement Project for the Developing World

At a time of globalization and rapid change in the global economy, developing countries are facing new challenges and opportunities. President Vladimir Putin’s suggestion to establish a BRICS investment platform that could help the associa- tion interact with rapidly developing economies, which voiced at the BRICS forum in Kazan, is a promising way to enhance the economic connectivity of develop- ing countries. The project aims to create new profitable investment opportunities for BRICS countries, contribute to the development of innovative technologies and strengthen trade connections between the member states and the rest of the developing world [1].
This is particularly relevant given the existing need for funding infrastructural and socioeconomic projects in developing countries. Many developing countries are struggling to find funds for financing the development of infrastructure. The shortage of roads, power networks and ports hinders intense economic growth. Moreover, social infrastructure — education, healthcare and other socially import- ant areas — requires substantial investments to improve people’s quality of life and create more competitive workforce. It is high time to discuss the establishment of the BRICS investment platform given both its challenges and the opportunities

the platform can offer to developing countries across the planet. The creation of this platform is especially important given the limited access of many developing economies to traditional financing sources, such as international financial insti- tutions, the IMF and the World Bank. Their funds are ohen either insufficient or these international organizations impose stringent lending conditions. This makes need for implementing this initiative all the more evident.
We assume here that the BRICS investment platform could contribute to strengthening economic ties between developing countries, boosting their eco- nomic potential and improving the social situation. To confirm this hypothesis, we need to investigate key aspects of the platform’s operation, analyse statistical data and forecasts, and identify the ensuing economic and social effects.
We would like to stress the need to invest in developing markets that demon- strate rapid economic growth, which primarily means South Asia, Africa and partly Latin America. This is obvious fr om the demographic dynamics in these regions, including active population growth, accumulation of capital and growing urbaniza- tion. Increasing urbanization will give rise to new economic growth centres, which means that people will strive to improve their standard of living and well-being, and governments should take these trends into account when formulating their eco- nomic policies.
This is confirmed by the global development report; please see Tables 1 and 2 below.
This shows that Africa, despite a number of challenges, like political turmoil and economic hardship, demonstrates the highest growth rate. The economic growth in this region has remained above the world average for several years, indi- cating promising economic potential.
The same is true about South Asia. This region shows impressive growth rates. India and Bangladesh are at the top of the list of the fastest growing economies. The number of foreign investments and high level of consumption are expected to contribute to further growth in these countries and in the regions as a whole.
Africa and South Asia are growing faster than the global economy on average, indicating dynamic development and a great investment potential.
Growth rates in Latin America are noticeably lower than in two abovemen- tioned regions. This have to do with political troubles and economic instability. Latin America, despite its more modest growth rates, can boast a number of rapidly developing countries, like Peru and Chile, which substantially improve the overall outlook of the region.
It should be noted that as of today, BRICS are already implementing common investment projects through the New Development Bank. However, despite sub- stantial advantages associated with transition period projects, they are way more difficult than “greenfield” or adaptation projects to implement and invest in. This is explained by a combination of long-term investments with delayed economic benefits, the global nature of transformation and subsequent changes in produc- tion processes.
The key Russia’s objective today is a just transition to low-carbon develop- ment without economic shocks or damage to the national commercial and techno- logical agenda. It is extremely important for any international institution to adopt common and comparable regulation principles, and the taxonomy of the transi- tion period is an important tool to align standards and better understand climate change projects; it also helps determine further technical priorities and national policies in each country. In the course of the last two years, it has become clear that Russia is struggling to find sources of finance for “green” and transition projects outside the country. International financial institutions, like the World Bank, the European Bank for Reconstruction and Development and the Green Climate Fund, earmarked substantial funds for sustainable development projects but shut off any investment inflow into Russia. According to Ernst & Young Green Investment Attractiveness Index (Ernst & Young Renewable Energy Country Attractiveness Index), Russia has not been among the top 40 countries since 2016. Therefore, the only external resources are friendly BRICS and BRICS+ countries. The Russian Central Bank as the key domestic investor supports all green economy projects and has developed a legal framework for investment as early as in September 2022.

However, the problem of the high cost and, consequently, limited number of tran- sition projects is still unresolved.
This is why, during the 16th BRICS summit held on October 22–24, 2024, in Kazan, Kirill Dmitiyev presented key investment projects that would be imple- mented in the nearest future and involve companies from BRICS countries. In order to streamline investing in joint projects, the RDIF director proposed creating a common investment platform. Projects for economic and technological develop- ment of BRICS countries require substantial financing totalling 500 billion euro. The BRICS investment platform proposed by the RDIF will cover up to 10% of the total equity financing required by such projects, adding up to 1.5% to the yearly GDP growth in BRICS countries. The Fund will foster the development of interna- tional cooperation between BRICS countries in the field of acquisition, improve- ment and use of artificial intelligence technologies [3].
The BRICS association is playing a major role on the international political arena and greatly affects and improves economies of many developing countries. Specifically, in 2023, the BRICS share is global GDP, according to the World Bank, amounted to 26% (vs. 43.7% for the G7) and their GPD at PPP was 35.7% (vs. 30% for the G7), wh ere China accounted for 70% of the total GDP of BRICS; India for 13%; Russia for 8%; Brazil for 7%; and South Africa for 2%. Aher the expansion of the association, its share reached 35% of the global GDP at PPP, which was confirmed in January 2024 (based on calculations for 2023) by Elvira Nabiullina, the head of the Bank of Russia. BRICS+ countries are home to 46% of the world population.
According to the Bank, China accounts for 70% of the total BRICS GDP; India for 13%; Russia for 8%; Brazil for 7%; and South Africa for 2%, which in sum is equiv- alent to 26% of the global GDP. Aher new countries join BRICS, its share in the global oil production will raise dramatically. It is estimated that it will increase from the current 18% to 40%. This will have great repercussions for the global payment system and global oil pricing, as said the official representative of the State Bank of India. Increasing the number of BRICS member states will also boost their share in global trade in goods, which will rise from 20% to 25%, and in trade in services, which will go from 12% to 15%. The proportion of BRICS in global currency reserves will grow by 600 basis points, to 45%. In 2024, BRICS+ will account for 46% of the world population, which shows their growing importance for the global economy.
Therefore, one can say that the BRICS investment platform produces a major economic effect: it creates new jobs, and growing investments help develop new industries and upgrade existing factories, which, in its turn, will reduce unemploy- ment. For instance, there is a job growth in the hi-tech and sustainable develop- ment sectors in India and Brazil, which has a positive effect on the standard of living of the local population.
Social effects are also very important. Investments in education and health- care carried out under the BRICS platform help improve people’s quality of life. For instance, projects to modernize educational and healthcare facilities are being

implemented in China and South Africa, strengthening quality of services and making them more accessible for people.
Therefore, the BRICS investment platform is an important tool for strength- ening engagement and deepening cooperation between developing countries. The platform is a promising solution for attracting capital and financing a variety of projects in developing countries. This project could help BRICS countries and other developing economies coordinate their investment efforts, exchange experi- ence and best practices, and jointly develop and implement ambitious projects. In the future, the project will help strengthen economic cooperation between devel- oping countries, increase their economic independence and reduce dependence on traditional sources of financing.
Creation of the BRICS investment platform is an important step for bolster- ing the role of BRICS as an influential player on the world stage. BRICS invest- ment programmes will help shape a more balanced and multipolar global economic system, in which developing countries will play a more active role. This may also encourage alternative models of development that take into accounts the specific features and needs of developing countries.