NEW DELHI: The BRICS consortium, a vital forum for emerging markets and developing nations, has officially welcomed five new members—Egypt, Iran, Saudi Arabia, Ethiopia, and the UAE. Their integration into the group took effect on January 1, 2024, marking a significant expansion for the alliance originally formed by Brazil, Russia, India, China, and South Africa.
This expansion comes in response to numerous membership requests in recent years, emphasising the growing importance and influence of the BRICS group. The Johannesburg Summit in August 2023 formally extended invitations to these five nations, recognising their economic potential and strategic significance within their respective regions.
While discussing the significance of Egypt’s participation in BRICS with The New Indian, Amr Adly, Assistant Professor of Political Science at the American University in Cairo and author of ‘Cleft Capitalism: The Social Origins of Failed Market Making in Egypt,’ provided insights into its bilateral ties with each member nations of the alliance and explored whether the group serves as a catalyst for shifting global economic dynamics.
Egypt’s Bilateral Ties With BRICS Nations:
During PM Modi’s visit to Egypt on June 24 and 25, 2023, four agreements were signed between India and Egypt. The most significant among them was the agreement that upgrades the bilateral relationship to a “strategic partnership,” a development characterised by Foreign Secretary Vinay Kwatra as “the most crucial and landmark development in the history of our relationship.”
Since assuming office in 2014, Egyptian President Abdel Fattah El-Sisi has expressed a strong desire to strengthen ties with Russia, despite Western nations distancing themselves from Moscow due to its conflict with Ukraine. Al-Sisi lauded the Egypt-Russia relationship in a speech at the 2022 St. Petersburg International Economic Forum, highlighting ongoing collaborative projects like the construction of the Dabaa nuclear power plant, the establishment of a Russian Industrial Zone in Egypt’s East Port Said, and collaborative efforts to enhance the Egyptian railway network.
Egypt and China share a robust partnership encompassing infrastructure development and military collaboration. China has held the position of Egypt’s primary trading partner for eight consecutive years, with Egyptian investments receiving approximately $28.5 billion from China in the fiscal year 2018–2019. Egypt also plays a significant role in China’s Belt and Road Initiative (BRI) by being a key partner in trade routes. The BRI aims to enhance connectivity and economic cooperation across regions, and Egypt’s strategic location makes it a crucial player in facilitating trade between China and the Middle East/North Africa (MENA) region.
Also Read: Sworn enemies Egypt-Iran unlikely to collaborate within BRICS: Cairo expert | EXCLUSIVE
Divulging why Egypt joined the BRICS alliance instead of deepening bilateral agreements with each of these member nations individually, Adly said, “We currently maintain robust bilateral ties with China, similar to numerous other nations. However, these connections differ from China’s relationships with South East Asia or South Asia, like a more moderate form of exchange. China’s influence in Egypt is notably on the rise, particularly in terms of trade and investment, with the latter, in the context of debt, being less prominent.
“Although Egypt’s primary supporters are still regional, including oil-rich countries like Saudi Arabia and the Emirates, and the EU, which remains Egypt’s largest trade partner, there is a noticeable shift. This brings us back to the future trajectory of BRICS, as it appears that China is strategically leveraging BRICS and other tools, prompting questions about the potential development of a cohesive agenda for global economic governance alongside major partners, especially India, Russia, and Brazil. Do these countries have a lot in common?
Also Read: Dangers of downplaying Houthi menace in Red Sea
“Also, when non-economic factors are considered, there is a noticeable divergence in interests between India and China, and between Russia and China. This complexity adds to the intricacies of the situation. Egypt stands as one of Africa’s largest economies, competing with Nigeria and South Africa for top positions.
“Despite being one of Africa’s promising economies, it is essential to acknowledge Africa’s historical marginalisation due to globalisation’s impact over the past few decades. While North Africa has fared slightly better than other regions in Africa, the overall situation remains challenging. Seeking partners beyond the traditional ones in the global north could be beneficial for Egypt.”
BRICS Membership As Catalyst For Shifting Global Economic Dynamics:
During the 2023 BRICS Summit in South Africa, the original five BRICS members, along with numerous other developing nations in attendance, consistently advocated for a more equitable global order and the restructuring of international institutions such as the UN, the IMF, and the World Bank.
As part of its efforts to decrease the global dependency on the US dollar in trade and financial dealings, China has always pursued de-dollarisation. The strategy involves promoting the use of local currencies in international trade and investment and expanding involvement in an alternative global financial system.
Now, with the inclusion of the five new countries in BRICS in 2024, the alliance’s share of the global economy has risen from 30 per cent to 37 per cent, surpassing the G7. This signifies a notable increase in BRICS’ influence, especially when considering purchasing power parity.
Also Read: BRICS membership cure-all for Egypt’s economic woes? Cairo expert explains | EXCLUSIVE
Highlighting the shift in the international order after BRICS expansion, reducing Western economic dominance, Adly explained, “The shift is already underway economically, marked by the decline in the overall weight of core Western economies such as Europe, the US, Canada, and Japan. This decline aligns with the increasing influence of Asia, particularly North-East Asia. The BRICS nations, including the four major economies plus China, aspire to reshape global governance norms, challenging the post-World War II rules set by the US. The ongoing decline of US hegemony is evident, but the exact nature of the transition remains uncertain.
“The US appears to contribute to the dismantling of some existing rules, leading to de-globalisation and rising protectionism. However, how Global Southern countries will collaborate to design an alternative governance structure is an open-ended question, dependent on their capacity for coordination and their relationship with core countries, which continue to be major trade partners, particularly for China. Therefore, the future of the dollar and the potential changes in the system remain uncertain.”
Also Read: India-Iran are bedfellows: Tehran expert on BRICS+ bond | EXCLUSIVE
Speaking of whether the BRICS+ group can take over the economic hegemony of G7, the professor opined that the BRICS+ group, taking over the economic hegemony of the latter is a complex scenario. G7 has a clear head which is the US and this has to do with the historical conditions within which the alliance emerged with the US – conquering pretty much Japan and Germany and dominating Western Europe militarily as well as politically. BRICS, on the other hand, lacks a clear leader, and China’s role in leading an alternative G7-like grouping is doubtful. Also, unlike the G7, BRICS is economically and geopolitically less coherent.
Watch Full Interview Here:
