Starting from January 1, 2024, Saudi Arabia, Argentina, the United Arab Emirates, Iran, Egypt, and Ethiopia will officially become part of the BRICS group of nations (but does this acronym still make sense?), upon explicit invitation from China and the approval of the other founding partners (Brazil, Russia, India, and South Africa).
As a result, BRICS will represent more than 40 percent of the world population. In terms of Gross Domestic Product (GDP), it will account for a share of between 35 and 38 percent, and in terms of the Earth’s surface area, about 26 percent.
At first glance, the new entrants may seem to have little in common, except for the desire to assert themselves on the world stage, and to emerge from the lingering shadows of their colonial pasts or Western influence. However, the countries involved in this momentous expansion of the BRICS group have long been linked by a dense network of economic ties. What is truly unprecedented and thus more surprising are certain political alliances or triangulations that will result from the expansion.
An emblematic example
Let’s look at Ethiopia. Addis Ababa has experienced a sustained and consistent growth rate, above double digits, for at least 15 years. Even this year, despite the civil conflict in the north of the country (the November 2022 has not yet yielded the expected results) and strong tensions with Sudan and Egypt over the use of Nile waters, the heavyweight of the Horn of Africa boasts a GDP growth of over 7-7.5 percent. Furthermore, the country’s national debt, inflation, and currency exchange rate are all under control. The goal of becoming a significant energy hub in the African continent, with a natural projection toward the Arabian Peninsula, its immediate neighbor, remains central in the agenda of Prime Minister Abiy Ahmed Ali. The Grand Ethiopian Renaissance Dam and other already operational infrastructures ensure the country’s self-sufficiency in matters of energy, as well as sellable surplus production capacity.
However, Ethiopia also needs a sustained flow of direct foreign investments, balanced trade, high-level know-how, and technological mentoring. Among the original BRICS members, China has invested in the country for the longest time, participating in infrastructure development, engaging in trade across the board, and playing a significant role in special Ethiopian economic zones. Addis Ababa aims to privatize everything that can be privatized, and Beijing is more than pleased with that. It is also worth noting that Ethiopia is party to a set of bilateral and regional agreements that are paving the way for the future African free trade area.
And what about India? After Beijing, New Delhi is Ethiopia’s second-largest trading partner, primarily purchasing wheat, fertilizers, technology, manufactured goods, and medicines. Direct investments exceed 5 billion dollars.
As for Russia, the recent Russia-Africa Summit bolstered existing agreements between Moscow and Addis Ababa and fostered new joint ventures. Most notably, Russia has committed to build Ethiopia’s first nuclear power plant and create several cities or industrial zones with particularly advantageous tax and customs rates. However, there is a twist, or rather a complex web of twists: for Moscow, Addis Ababa is an excellent customer for arms and military expertise, primarily to combat the Tigray rebels and intimidate regional competitors – Sudan and Egypt – who are currently at odds over the contested waters of the Nile. But Sudan has also found favor with Vladimir Putin, especially since 2017, when Russian corporations began intensive mining operations in the country. And then came the Wagner militia.
Today, the Kremlin has a sound – and openly touted – relationship with the Sudanese rebel general Mohammed Hamdan Dagalo, a frequent visitor to Moscow. Dagalo is an autocrat who shuns diplomacy and appears intent on resolving disputes in the entire geographic quadrant with his Rapid Support Forces. Egypt, Ethiopia, and the troubled South Sudan have all been warned. How will these tensions shift within the framework of the BRICS expansion?
Finally, a quick glance at the other founding BRICS countries’ ties to Addis Ababa: Brazil is increasingly interested in access to the African market, and Ethiopia, with its 123 million inhabitants and resource-rich territory, suits its needs. For its part, South Africa aims to accelerate the transition to a free African market and expand its collaborations in the heart of the continent.
Are all the new members similar to Ethiopia?
In macro terms, yes: rich in natural resources or hydrocarbons, or with at least with a potential for energy production, and with relatively young and (with the exception of the two sultanates) abundant populations.
Unlike the other countries, the UAE and Saudi Arabia boast greater political stability, and an advanced process of economic diversification that allows them to look beyond oil, the liquid gold.
However, an analysis of the group as a whole reveals important distinctions and the presence of obvious subgroups.
Having made it through a decade of post-revolutionary regime, President Abdel Fattah al-Sisi’s Egypt is nevertheless as fragile as a crystal vase: the social policies that were intended to contain the country’s demographic increase have failed, with two million new citizens every year. At the moment, its population is over 100,000 people, and at the current rate that number will have doubled by 2100. At the same time, the country’s yo-yoing economy, dependent on both internal and regional stability, cannot provide the country with reassuring future scenarios.
Egypt’s 40 percent year-on-year inflation in August 2023 was cause for particular alarm, heavily affecting essential goods and transport. Indeed, the International Monetary Fund will only honor the 3 billion dollar loan agreement it made with Egypt in December 2022 if the country manages to rein in inflation. Moreover, it is important for the country to foster privatization, currency devaluation, and debt reduction. The socio-economic situation also depends on the stability of the regime, which does not tolerate any form of dissent, either among the population or within the regime itself, but which is also disappointing many allies. Presidential elections will be held on June 2024, and al-Sisi must win the support of the entire population in order to remain in power. Hence his constant search for new allies, without discarding old ones.
The Islamic Republic of Iran also belongs to the “fragile” subgroup: though it projects a strong image, Tehran is struggling to withstand pressures from a young population exasperated by the country’s chronic obscurantism and economic hardships. A year after the murder of Mahsa Amini, protests have sprung up across most of the country. History has certainly shown that even thirty-year-old regimes may collapse overnight. Every day, the socio-economic situation deteriorates: in Spring 2023, inflation hit 50 percent compared to the previous year, and the exchange rate was 600,000 riyal for a single US dollar.
BRICS know that, by providing opportunities for commercial and financial exchange, they are lending a life line to the Ayatollah regime. The economic support and political legitimation may delay the demise of the regime. This is very much in the interests of Moscow, Beijing and New Delhi: not only does would they be able to benefit from Iran’s immense energy reserves, but it would also provide them with significant leverage in their dealings with Washington, as well as great influence on global equilibriums.
Argentina, whose presidential elections will be held on October 22, is more than merely fragile: Buenos Aires stands once again on the precipice of disaster. Over 40 percent of its population lives under the poverty line. Inflation has reached tripled digits. Each of the five presidential candidates has a different plan to revive the sick man of South America (which also happens to be the world’s largest Spanish-speaking country): rich with raw materials and untouched land, with a relatively small population of 40 million that is mostly confined to the major urban areas, the country is in dire need of foreign investments. Another significant factor: like Egypt, Argentina has received much funding from the IMF, but with little to show for it.
It is also clear that the original BRICS countries, increasingly led by Russia, and increasingly reminiscent of ruthless corporate headhunters, have a preference for emerging countries with poor records in terms of human rights, political pluralism, and the use of diplomacy in international disagreements.
At the same time, the original BRICS countries have not demanded that their new partners leave other groups or make any U-turns of any kind, resulting in a contradictory network of alliances that would have been unimaginable only a few years ago.
Abu Dhabi and Riyadh provide an obvious example of this. Their bonds with Washington remain strong, and indeed they recently resulted in the normalization of their relationships with Israel. As for Europe, the sultans see it as an economic playground and energy partner. By joining the BRICS countries, the UAE and Saudi Arabia strengthen their already solid relationship with Moscow, as well as their technological and infrastructural ties with China. But it is India that has the most to gain: the country already signed a Comprehensive Economic Partnership Agreement (CEPA) with the UAE in May 2022, significantly reducing customs tariffs on international exchange, and the countries will reap even greater profits from each other starting on January 2024.
Because Egypt already owes the UAE and Saudi Arabia 100 billion dollars, the new BRICS partnership might provide the UAE with even greater leverage on the North African country, perhaps increasing acquisitions and investments. The sultanates will also likely providing greater political support to the al-Sisi regime. At the same time, the new partnership might finally foster an agreement between the sultanates and Iran regarding use of the Persian Gulf’s (or, indeed, Arabian Gulf’s) many gas fields. This would likely benefit the entire group, and strengthen them all in their dealings with the US.
At this rate, we shouldn’t be surprised if the next country to triumphantly join BRICS were North Korea.
Cover photo: from left to right, President of Brazil Luiz Inacio Lula da Silva, President of China Xi Jinping, South African President Cyril Ramaphosa, Prime Minister of India Narendra Modi and Russia’s Foreign Minister Sergei Lavrov attend the 2023 BRICS Summit at the Sandton Convention Centre in Johannesburg on August 24, 2023 (photo by Phill Magakoe / AFP.)
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