The Johannesburg II Declaration issued at the 15th BRICS Summit held in South Africa invited Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates to become full members of the BRICS (Brazil, Russia, India, China, South Africa) from 1 January 2024. The Middle East and North Africa (MENA) countries are four out of the six new entrants, and the expansion of BRICS has the potential to transform the existing regional dynamics. The Declaration states that the BRICS countries cooperate on political, security, economic and cultural issues while aiming to achieve a fairer international order, a reformed multilateral system, sustainable development and inclusive growth for all.[i] By virtue of this, BRICS will provide a platform for the new MENA entrants to cooperate on a broad spectrum of issues and emphasize a multipolar, multilateral, and sustainable world order. Joining BRICS is important for the MENA countries as it will bring economic gains for them along with the associated political leverage.
BRICS membership will ensue economic benefits for prospective candidates, including those belonging to the MENA region. BRICS is an economic grouping, and as members, the MENA countries will be able to jointly assess the new global challenges, including macroeconomic shocks and financial volatility, and draw up an agenda for intra-BRICS cooperation. Joining BRICS also provides an opportunity for the MENA countries to share the platform with the world’s emerging economies, especially as the economic centre of the world is predicted to shift its location towards India and China by 2050.[ii] In January 2024, as the six new members will join BRICS, the group will host 46 per cent of the world population, contribute 29 per cent of the global GDP, and control 43.1 per cent of the world’s oil supply.[iii] The relevance of the group can be gauged from the fact that over 40 countries have expressed interest in joining BRICS.[iv]
As strong economies, countries like Saudi Arabia and the UAE aim to contribute to and benefit from the BRICS membership. The Strategy for the BRICS Economic Partnership 2025[v] states that the member countries would seek to stimulate strong economic growth and support the multilateral trading system based on the rules and principles of the World Trade Organization. Led by young leaders, Saudi Arabia and the UAE are focusing on economic diversification while working towards an energy transition.
On the other hand, economies like Egypt and Iran would benefit from the BRICS emphasis on sustainable, inclusive economic growth and poverty reduction. For Iran, the BRICS membership is a strategic move as it will help in addressing the isolation caused by the economic sanctions imposed by western countries. For Egypt, the membership will bring gains in terms of attaining goals of sustainable development. For Egypt and Iran, joining BRICS also has a developmental value as they tend to benefit from the digitization wave and address the digital divide while improving the quality of life.
As full members, the MENA countries will adhere to the basic principles of BRICS, take into account the priorities, growth and development strategies of their fellow member countries, recognize the increasingly multipolar nature of the international economic and financial system and forge partnerships in the priority areas of trade, investment and finance, digital economy and sustainable development.
New Development Bank
The MENA countries will also benefit from the New Development Bank (NDB), which aims to mobilise resources for infrastructure and sustainable development projects in emerging markets and developing countries. In 2018, NDB received an AA+ credit rating from Fitch and S&P, cementing its access to global financial markets. A year later, for the first time, it moved beyond USD funding, approving loans denominated in Euro, Chinese Yuan, South African Rand and Swiss Franc. In 2020, the NDB earmarked 10 billion USD in response to the COVID-19 pandemic and established the Eurasian Regional Center in Moscow. Last year, the NDB established the India Regional Center in Gujarat International Finance Tec-City.[vi]
The UAE and Egypt joined the NDB in 2021 and 2023, respectively, and expect to gain from the membership.[vii] Egypt’s joining of the NDB will relieve the state budget of the pressure of finding US dollars to meet its imports, as members of the bank can use their national currencies in trade exchange.[viii] NDB’s general strategy for 2022–2026 specifies that 30 per cent of the total financing should be in local currencies.[ix] One of the aims of the Bank is to provide financing for infrastructure and sustainable development projects, and by attaining the BRICS membership, the UAE and Egypt would be well positioned to benefit from the same. NDB membership provides co-financing opportunities for the UAE’s private and sovereign investors, such as Mubadala, and delivers greater market access to the BRICS countries. On the other hand, being a top-tier credit rating country, the UAE could add to the bank’s capital resources.[x]
NDB’s operations during the 2022–2026 period will focus on clean energy, transport infrastructure, water and sanitation, environment protection and social and digital infrastructure, and the new MENA members will gain through collaborations in these areas. The Johannesburg II Declaration emphasizes the active role of NDB in the knowledge-sharing process and encourages it to incorporate the best practices of the member countries into its operational policies according to its governance mechanism. It also stresses that the national priorities and development goals of the Member countries should be taken into account.[xi]
The joining of BRICS by the UAE, Saudi Arabia, Iran and Egypt will strengthen MENA countries’ support for multilateralism. MENA countries are vocal advocates of multilateralism and have earlier voiced their support as well as expressed keenness to join forums like the BRICS, SCO and G20. The four new MENA entrants to the BRICS have also expressed their support for multilateralism. For example, Iran has been an ardent supporter of multilateralism and has emphasized that genuine multilateralism must be founded on inclusiveness rather than exclusion. Under the leadership of the former President Hassan Rouhani, Iran believed that regional multilateralism was an alternative to confrontation and security competition.[xii] The current government of President Ebrahim Raisi has also highlighted the significance of multilateralism as one of the pivotal tools in the service of economic diplomacy.[xiii]
The UAE believes that the Global South is severely disadvantaged in multilateral governance; and the middle powers, developing countries and smaller states are increasingly stepping up to ensure continued multilateral dialogue and progress. Also, the UAE remains a strong proponent of result-driven multilateralism that serves humanity. Likewise, Saudi Arabia’s Minister of Economy and Planning, Faisal bin Fadel Al-Ibrahim, said at the World Economic Forum Summit in Davos in January 2023 that multilateral platforms help address global challenges and provide opportunities for all countries to grow their institutional capabilities.[xiv] Egypt has stressed that multilateral institutions should focus on sustainable development and allocate appropriate representation to Africa.
The joining of the BRICS by the MENA countries signifies their faith in a multilateral and multipolar world order. The disenchantment with sharpening great power rivalry and willingness to engage with multiple global actors for the maximization of national interests. They realise that the unipolar world is a passé and multipolarity is the future. A multipolar world order will provide an opportunity for countries like the UAE and Saudi Arabia to emerge as individual poles while also offering prospects for MENA to emerge as a distinct pole in itself. Also, the expansion will bring newer opportunities for economic cooperation and engagement for these countries, as BRICS includes the two major producers as well as the two major consumers of hydrocarbons in the world.
* Dr. Lakshmi Priya, Research Fellow, Indian Council of World Affairs, New Delhi.
Disclaimer: Views expressed are personal.
[i]XV BRICS Summit, Johannesburg II Declaration, BRICS and Africa: Partnership for Mutually Accelerated Growth, Sustainable Development and Inclusive Multilateralism, Sandton, Gauteng, South Africa, August 23, 2023, available at https://www.mea.gov.in/Images/CPV/Declaration_2408.pdf (Accessed September 26, 2023).
[ii] Danny Quah (2011), The Global Economy’s Shifting Centre of Gravity. Global Policy Journal, vol. 2: pp. 3–9. https://doi.org/10.1111/j.1758-5899.2010.00066.x (Accessed September 26, 2023).
[iii]Infographics-Explaining the BRICS expansion, The Hindu Bureau, September 5, 2023, available at https://www.thehindu.com/news/international/infographics-explaining-the-brics-expansion/article67248395.ece (Accessed September 26, 2023).
[iv]Marcus Lu, Visualizing the BRICS Expansion in 4 Charts, Visual Capitalist, August 23, 2023, available at https://www.visualcapitalist.com/visualizing-the-brics-expansion-in-4-charts/ (Accessed September 26, 2023).
[v]Strategy for BRICS Economic Partnership 2025, BRICS Information Centre, University of Toronto, November 2020, available at http://www.brics.utoronto.ca/docs/2020-strategy.html (Accessed September 26, 2023).
[viii]Aya Gamal, Egypt joins BRICS’ New Development Bank, Ahram Online, March 30, 2023, available at https://english.ahram.org.eg/NewsContent/3/12/492782/Business/Economy/Egypt-joins-BRICS%E2%80%99-New-Development-Bank-.aspx (Accessed September 26, 2023).
[x]Why The UAE Joined The BRICS New Development Bank, Middle East Briefing, March 26, 2023, available at https://www.middleeastbriefing.com/news/why-the-uae-joined-the-brics-new-development-bank/ (Accessed September 26, 2023).
[xi]NDB at the 15th BRICS Summit, 22 August 2023 - 24 August 2023, available at https://www.ndb.int/event/ndb-at-the-15th-brics-summit/ (Accessed September 26, 2023).
[xii]Hamidreza Azizi, Iran and multilateralism in the Middle East: Possibilities and constraints, MENA cooperative Security, Policy Series, October 27, 2022, available at https://kalam.chathamhouse.org/articles/iran-and-multilateralism-in-the-middle-east-possibilities-and-constraints/ (Accessed September 26, 2023).
[xiii]BRICS and Iran’s Multilateralism Policy, by Minister of Foreign Affairs Hossein Amirabdollahian, June 20, 2023, available at https://namibia.mfa.gov.ir/en/NewsView/722569/BRICS-and-Iran%E2%80%99s-Multilateralism-Policy (Accessed September 26, 2023).
[xiv]WEF 2023: Saudi Arabia committed to multilateral cooperation in a fragmented world, CGTN, January 17, 2023, available at https://news.cgtn.com/news/2023-01-17/Saudi-Arabia-committed-to-multilateralism-in-a-fragmented-world-1gDGSfUNj4A/index.html (Accessed September 26, 2023).