BRICS Plus: Arab Gains and Challenges of Geopolitical and Economic Balance

The 15th BRICS Summit, held in Johannesburg, South Africa, from August 22-24, 2023, has gained wide global importance and the proceedings were watched keenly across the world, especially by the major Western powers. Leaders of the member nations – Brazil, Russia, India, China and South Africa – held discussions about expanding the group's membership and also pushing towards adoption of a unified alternative currency to the US Dollar. Importantly, the group is seeking to reduce the long domination of the US dollar and the Western financial institutions on the global financial system, amid an uncertain global geopolitical landscape and the desire among most nations for gradual withdrawal from the unipolarity of the international system and for moving towards multipolarity. This is an outcome of several geopolitical phenomena, beginning with the slow global economic recovery following the spread of the Covid-19 pandemic that saw precautionary lockdowns imposed across nations and the rise of trade protectionism. Even as the world was recovering from the pandemic, it was engulfed in new shocks, foremost being the Russian-Ukrainian war and its related geopolitical repercussions on global commerce and economics. The emergence of new variants of Covid-19 has also led to lockdowns in many key industrial centers. The severe impact of these global happenings has led many countries to consider forging a new world order as well as evaluate the relevance of the existing structures and blocs. This was reflected in the deliverables of the 15th BRICS Summit, that saw the bloc admit six new member countries: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates, that will officially join the group in January 2024. The following points reflect the relevance of BRICS:

The rising importance of BRICS hinges on factors that demolish the current global predispositions or predictions about some regions. [1] This gives the qualitative context that supports the status of BRICS as one of the most important economic blocs on the international map, according to the following points: [2]

- The impact of globalization and the consequent recession that hit the global economy following several non-traditional challenges, especially the Covid-19 pandemic, pushed the BRICS member states to forge joint understandings to improve the way of confronting the new challenges created by the crises. Furthermore, there is a desire to structure a fairer international economic system that would fulfill the aspirations of developing countries in a better way.

- Secondly, the Russian-Ukrainian war has pushed the developing and emerging economies to review their economic and development aspects. This has created the so-called "dual tendencies" within BRICS in favor of its expansion. Additionally, the Russia-Ukraine war and its severe economic fallout motivated many developing and emerging economies to join flexible and diversified groups. With the rising importance of the BRICS bloc and with several countries evincing interest to join it, Russia and China proposed expanding the membership. Representatives from Argentina, Egypt, Indonesia, Kazakhstan, Nigeria, the UAE, Saudi Arabia, Senegal, and Thailand participated in the consultations of the "BRICS-Plus". With around 40 countries putting forward requests to become members, the BRICS Summit decided to expand its membership to include six new nations as permanent members from January 2024. [3] These include three Arab countries (Egypt, Saudi Arabia, and the UAE) besides Iran, Ethiopia, and Argentina, to establish the "BRICS Plus".

- The expanded membership, along with the long list of nations evincing interest in joining BRICS, underscores the desire of most nations to rearrange the nature of global geo-economics to get rid of the dollar’s hegemony. This got further impetus with the talk about adopting a unified currency for BRICS that can be used in international interactions in a way that would directly change the world’s "economic map". This will also help countries to move away from the West’s unilateral dictation, towards a multipolar world. Additionally, this would help shift the power balance from the North (i.e. West) to the Global South (of developing and emerging economies). The five-member BRICS grouping is home to 40% of the world’s population and controls 26% of the global trade.

The move to add three Arab states to BRICS enhances the Arab region’s efforts towards "economic integration" with the bloc’s member states. Moreover, BRICS supports building bilateral and multilateral partnerships to develop infrastructure, supporting new joint economic and investment projects, and signing differential agreements related to lifting customs restrictions and non-customs barriers. This is in addition to benefiting from the BRICS’ experience in certain fields such as industry, agriculture and mines, given the scale of the following opportunities:

In view of the current geo-political and security implications as well as their disruptive impact on the economies of emerging states, foremost of which belong to the Arab region, the move to accept three Arab nations as new BRICS members will give a fillip to the "economic integration hypothesis". This is because economic groups provide opportunities to enhance trade and investment among the member states. This in turn would promote the growth of the national economies and help diversify their sources of revenue as well as secure the strategic goods due to the mutual reliance of the member states on each other.

The 15th BRICS Summit concluded with some decisions such as: issuing directions to their finance ministers to discuss using their local currencies, local payment instruments and payment platforms for financial transactions. This would in effect work to reduce dependence on the dollar as a main currency in trade transactions, and also boost the value of their local currencies.

Given the Arab economic recession due to several political and security tensions at the local, regional, and international levels besides the upheavals caused by the non-traditional threats such as the Covid-19 pandemic and climate change, joining the BRICS New Development Bank would help activate the development map of Egypt, Saudi Arabia, and the UAE. The UAE and Egypt, besides Bangladesh, have formally become new members of the NDB. Saudi Arabia is yet to become a member of the BRICS NDB. Becoming members of the NDB would help support the sustainable development goals agenda and address the issue of liquidation given that the foreign reserves of these countries are estimated to be US$ 4 trillion. [4]

This hypothesis is related to the Arab political movement in all the sub-regions and their varying political and economic engagements with each other on specific issues. For example, due to its geopolitical centrality among the three regions (Arab, African, and European), adding Cairo to BRICS would serve as a relative advantage in fostering the economic and investment frameworks and also enhance the benefits from bilateral and multilateral deals such as the Free Trade Agreement between Egypt and the "Mercosur" (South American trade bloc). Egypt seeks to capitalize on its theory of “geoeconomic centrality", as the best logistics hub for commercial interactions among the three continents of Africa, Asia, and Latin America. 

This hypothesis is based on the economic indexes of both BRICS member states and the newly-joined countries. This would serve the goals of the group including maintaining the economic balance of the member states, revoking of the policies of unipolarity, establishing independent funding mechanisms, and achieving political and economic integration, given the following indexes: