Goldman Sachs economist Jim O’Neill predicted back in 2001 that the BRIC economies — Brazil, Russia, India, and China — would grow large enough to compete with the G7 countries within the decade.

O’Neill further anticipated that in the long term, “China’s economy will become as big as the U.S. by 2027, and the BRICs as big as the G7 by 2032.” These bold predictions laid the foundations of the BRICS club, which South Africa joined in 2010. To O’Neill’s credit, the BRIC outperformed all expectations during its first decade.

Initially, the world of finance was excited over the rise of the BRICS. These countries were the first collective post-Cold War rival to the global economic dominance of the West. In the first decade, the bloc’s global exports — not yet including South Africa’s — were projected to double from 8 to 16 percent, and to make up 14 percent of the world’s GDP. In that decade, their global export actually increased by 500 percent, to make up 18 percent of the world’s GDP. Many investors poured resources into these countries and created new jobs, contributing to the BRICS’ success.

However, since the Federal Reserve signaled that the American economy had improved enough from the financial crisis and recession to end its asset-buying program, the BRICS have been on a steady decline. As investors pull out of their emerging markets, the BRICS’ rise is threatened. At the same time, other economies have been emerging, particularly the MINT countries — Mexico, Indonesia, Nigeria, and Turkey — which O’Neill now says will be the next economic giants.

So do the BRICS still pose a major challenge to the Western-led economic order?

Falling BRICS

China is now the world’s largest economy, after an astonishing run of near double-digit growth for the last two decades. But this March, Premier Li Keqiang announced that the nation’s growth target for this year would be cut to around 7 percent, which would be the slowest expansion in two decades. With demand declining for Chinese goods, combined with the country’s slumping real estate and weaker manufacturing sector, the premier has called for a reform in its economy.

“It is not surprising that China’s economy is slowing,” says Mark Dallas, a professor at Union College. “As economy gets bigger, it gets harder to maintain a high growth rate.” Certainly what China has done over the last 30 years is nothing short of a miracle. Lifting more than 500 million people out of poverty and surpassing the United States as the world’s largest economy are major accomplishments. However, there is still a long way to go. According to World Bank reports, nearly 100 million Chinese citizens still live below the national poverty line.

The recent slowdown of China’s economy isn’t good news for the United States either. “The growth of China’s economy means more opportunities for businesses to grow and to expand, which creates new jobs,” Dallas adds. But with the slow growth, the United States should be more concerned with yet another weight added to its economy. With a population of over 1.3 billion people, China is one of the main consumers of U.S. goods, amounting to $124 billion per year. As China’s economy slows, there may be a knock-on effect on other nations that rely on China’s consumption, which could result in those nations finding it harder to buy U.S. goods.

Russia is in a far worse situation than China. The political and economic isolation of the country, orchestrated by the United States after the Ukraine crisis, has had a tremendous negative impact on the once surging economy. Driven further downward by plunging prices for gas, the export from which the Russian government derives 50 percent of its revenue, the country is heading into a deep recession. As the nation’s wealth disappears, pressure is mounting on President Vladimir Putin, who recently instituted a 10-percent across-the-board cut in salaries for his administration. The Russian central bank was forced to raise interest rates from 10.5 percent up to 17 percent in order to save the plunging ruble.

The Kremlin once seized the opportunity to project its influence on the BRICS. But its aggressive military tactics and hostile seizure of Crimea have complicated matters. Putin’s diplomatic confrontation with Europe and the United States has backfired. Although Russia’s economy has grown from less than 1 percent of the world’s GDP at the time of O’Neill’s prediction to over 3 percent today, its recent plunge has been worse news for the global economy than for the United States, whose exports to Russia amount to a mere 0.7 percent of overall exports.

Somewhat better than Russia, but also experiencing a slowdown, is Brazil. With inflation spiraling up, unemployment rising to the highest level in two years, and an ongoing $2 billion corruption scandal involving the state energy group, Petrobras, President Dilma Rousseff is facing the difficult challenge of revitalizing the drastically slowing economy. As the finance minister announces plans to cut government spending and increase taxes, Brazil is beginning to look less attractive for American investors.

Still the oddball of the BRICS club and the weakest of the countries, South Africa continues to struggle. O’Neill was skeptical right from the beginning when the BRIC bloc decided to add South Africa to the club. “For South Africa to be treated as part of BRIC doesn’t make any sense to me,” O’Neill commented.

Once deemed Africa’s biggest economy, South Africa has failed to live up to expectations. Inequality and unemployment rates remain the two major obstacles to growth in the country. Since 2010, the quarterly growth rates barely hover around 2.5 percent, jobs are scarce, and a recent wave of xenophobia left seven immigrants dead. The international community, including the United States, has condemned the incidents and called on South Africans to take a stand against such actions.

Standing Alone

The only bright light in the BRICS is India. The world’s largest democracy, India remains the BRIC with most growth potential thanks to its recent policy reforms.

Since O’Neill’s prediction, India’s economic output has grown from $494 billion to $2.3 trillion and is expected to continue rising as investors pour money into the country. The International Monetary Fund (IMF) predicts that the country’s economy will grow by 6.5 percent in 2016. Although India’s most optimistic growth is still below China’s, the country’s service sector has pushed progressive growth in India’s economy.

The United States is capitalizing on the success of India. Since 2001, bilateral U.S.-India trade has increased to nearly $100 billion, and it’s estimated to increase to $500 billion with President Barack Obama and Prime Minister Narendra Modi pledging to increase trade. The efforts led by the prime minister have made India a more attractive market not only for American investors but also for the Japanese, who recently invested $33 billion in India, and China, where Modi has secured $20 billion in infrastructure investment.

Despite its striving economy, India still struggles when it comes to social issues. More than 300 million people in India still live below the poverty line. With continued religious and sexual violence, the country still has a long way to go before it can be truly break into the ranks of the top global economies.

A New Alternative

According to the mainstream paradigm, the BRICS are successful if they grow, provide investment opportunities for outside investors, and interact smoothly with International Financial Institutions (IFIs).

But the BRICS have challenged this mainstream paradigm. They’ve established institutions that might compete with the IFIs and challenging U.S. efforts in particular to dictate economic terms to weaker economic powers. Popular movements have also mounted challenges within the BRICS to the governments’ failures to more substantially address social and economic equality. Finally, the BRICS themselves might be giving way to another group of rising countries that could transform the way the global economy works.

The most important challenge the BRICS have launched involves new IFIs. During the sixth BRICS summit in Brazil, the leaders of the countries launched the New Development Bank (NDB) with an initial capital pool of $50 billion and currency reserve of $100 billion. The NDB rivals the U.S.-dominated World Bank and the International Monetary Fund (IMF). Already there have been some tensions between the new world powers and the West.

Mark Dallas advises that “the U.S. should seek to cooperate with the NDB and seek to work side by side with the emerging nations.” He adds, “the idea here is that there is plenty of room globally for another development bank and they do not have to be rivals. The Asian Development Bank and World Bank can cooperate, and each has plenty of work to do worldwide. So, why not a BRICS bank too? And an Asian Infrastructure Investment Bank? … As long as the other banks are run well and cleanly, then there should be no rivalry or conflict.”

Although the NDB provides an alternative to the Bretton Woods institutions and mitigates negative consequences for the emerging economies, the reality for the BRICS club is that four out of five of the countries are experiencing slow growth in their economies and would need to tackle this issue in order to challenge either the World Bank or the IMF. The BRICS are hoping that mobilizing resources for infrastructure and sustainable development in both the private and public sector can boost their economic growth.

Another challenge is in the relationship between the BRICS and the United States. “None of the BRICS countries has signed trade or investment agreements with the United States. And when there have been negotiations, they have strongly resisted the U.S. approach” says Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies. “For example, Brazil refused to accept U.S. demands in the Free Trade Area of the Americas negotiations that would’ve primarily benefited large U.S. corporations. That was a key reason those negotiations failed after 11 years of talks.”

The BRICS have largely been judged by their economic growth. But that’s not the only way of assessing economic success. “We have to pay attention to how we are measuring growth,” says David Hart, director of New Economy Maryland. “Measuring a country’s economic progress through GDP doesn’t paint the full picture.” The BRICS have had their fair share of protests mainly because of social and economic issues. “Creating policies based on the GDP causes serious problems. Instead, we would do well to take into account a full range of social, economic, and environmental measures,” Hart adds.               

The BRICS aren’t the only ones challenging the economic order. Other emerging powers such as the Next 11 (N-11), which includes Bangladesh, Egypt, Indonesia, Iran, South Korea, Pakistan, Vietnam, and the MINT countries are poised to transform the world economy. As globalization expands, these countries continue to capitalize from energy, infrastructure, urbanization, human capital, and technology investments. Today, the BRICS and the N-11 make up nearly 40 percent of the global economy.

When O’Neill’s theory on the BRICS was published, the international community was abuzz with the idea that non-Western countries would lead the future economy. However, the theory has had to take into account economic trends outside the BRICS. The rise of the BRICS, the MINT, and the N-11 has shown that the West no longer dominates the global markets. A global economy that follows U.S. commands is a thing of the past.

Chris Nwosu is a contributor to Foreign Policy In Focus.