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Will a BRICS expansion mark the dawn of a new world order?

Will a BRICS expansion mark the dawn of a new world order?
7 min read
06 September, 2023
Analysis: The recent invitations to six countries to join BRICS indicates a will to reshuffle the global order and pursue economic interests as a bloc, with MENA players seeking to extend their influence in a multipolar world.

The bloc of nations of Brazil, Russia, India, China and South Africa, known collectively as BRICS, will be joined by four new MENA countries starting January 2024, as announced at the late August summit in Johannesburg.

The bloc of major developing economies, which makes up 40% of the global population and a quarter of the global gross domestic product, handed invitations to Saudi Arabia, Iran, Egypt, and the United Arab Emirates, in addition to Argentina and Ethiopia, in a noteworthy effort to expand the collective in the rapidly changing world order.

In total, some 40 states have applied or indicated interest in joining the group, which is seen as a counterweight to the G7. Further expansion of the organisation will almost certainly follow in the future, as the Global South calls for inclusive multilateral cooperation.

“BRICS is a diverse entity with many countries, with different agendas but nevertheless who can come together over shared interests,” Trita Parsi, an expert on Iranian foreign policy and the geopolitics of the Middle East, told The New Arab (TNA).

“It’s much more of a pragmatic constellation rather than an ideological one.” 

The inclusion of four influential members from the Middle East and North Africa suggests that the five established BRICS members’ drive toward enlargement correlates with their determination to strive for the Global South’s economic growth potential and increased security influence on the global stage.

“It’s some kind of forum of growing economies bringing together different countries who want to talk to each other,” Tobias Borck, senior research fellow for Middle East Security Studies at RUSI, commented to TNA.

“The enlargement of it makes the forum bigger, with more players, therefore a more interesting place,” he added, explaining that, regardless of the distinct calculations made by original members in selecting which countries to invite, they agreed on the selection of countries they deem “useful”.

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Emile Hokayem, director of regional security and senior fellow for Middle East security at the International Institute for Strategic Studies, wrote in reference to the four joiners from the Middle East that their invitation, “shows how this volatile region is both sensitive to, and being pulled into, the significant geopolitical re-ordering that is underway”.

The new memberships will presumably give the MENA entrants a greater voice in world affairs and enable them to assume more important positions of regional and global leadership, appealing to nations in search for greater strategic autonomy from Washington.

That is also true for the allied Gulf monarchies who are seeking to develop alternative partnerships free from Western influence, and to reduce the dominance of the US dollar in global trade as BRICS’ share of the world’s GDP surpasses the G7’s.

The strong inclination to incorporate MENA nations in the group, adding key oil producers to the rapidly growing markets, is a logical step for the existing members, particularly major oil-importers India, China, and South Africa.

Brazil's President Luiz Inacio Lula da Silva, China's President Xi Jinping, South African President Cyril Ramaphosa, Indian Prime Minister Narendra Modi and Russia's Foreign Minister Sergei Lavrov pose for a group photo at the BRICS Summit in Johannesburg on 23 August 2023. [Getty]

Saudi Arabia and the UAE, two of the world’s largest oil and gas exporters, supply most of China’s energy imports. India has also recently increased its oil imports from Saudi Arabia.

For Beijing, the entry of key MENA powers is a significant development in its efforts to assert more political influence in the region. China has taken noteworthy steps to this end, namely facilitating a historic Iranian–Saudi diplomatic agreement in March and admitting several Middle Eastern states to the Shanghai Cooperation Organisation in 2022.

The expanded bloc could shift global economic dynamics with regards to oil trade and policy, given that oil is until now traded only in dollars.

If BRICS members transition away from dependence on the US dollar, and indeed start trading in their local currencies fully, the enlarged consortium could carry significant clout within energy markets.

The prime oil-exporting nations encompassed in the grouping collectively represent about 42% of the world’s oil production. That should, in turn, raise the Saudi leverage in countering any potential Western sanctions on oil producers.

Besides facilitating the exchange of goods between the group’s members, old and new, entering BRICS would also roll out new funds for countries like Egypt, Ethiopia, and Iran - struggling under the weight of US sanctions - for their development plans.

Iran’s entry, specifically, is anticipated to be a political win in overcoming Western-imposed diplomatic isolation, facilitating economic alliances that circumvent the American-dominated global financial system. In the short term, BRICS membership provides Tehran with new trading partners to mitigate the impact of international sanctions.

According to Parsi, from an Iranian perspective it would be more of a “political victory”, proving that the United States is no longer in a position to “single-handedly decide” who can be integrated in the global arena and who cannot.

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“The US has lost that gatekeeper capacity as the world has shifted away from unipolarity,” he said.

Still, from a financial viewpoint, Parsi continued, BRICS membership will have a far smaller impact for Tehran as long as the US sanctions stay, noting that there are an “extremely limited” number of entities associated with BRICS countries that are “not exposed” to the American market.

The entries of Saudi Arabia and the UAE offer an opportunity to the oil-rich states to continue to diminish their reliance on the US and diversify relations. Still, partaking in BRICS should not be read as doing away with existing alliances, as military partnerships between Riyadh, Abu Dhabi, and Cairo with the United States remain important.

As for Egypt, becoming a member could help it to increase its non-dollar dominated trade with BRICS countries and seek funding as it is facing a severe economic crisis, though it will still need to enact more structural reforms to address its long-term economic troubles.

With this expansion, BRICS countries account for six of the top nine oil producers, producing 42% of global oil supply. [Getty]

Its admission may also pose foreign policy challenges for Cairo in balancing its established partnership with the US and powerful core members of the bloc such as China and Russia.

For Beijing, stability in the Gulf is key, bringing two powerful former antagonists in Iran and Saudi Arabia into the same space is considered a win, Borck explained.

While the economic agendas of BRICS participants and invitees are relatively aligned, their geopolitical interests differ greatly, which is likely to bring complications to the group.

Though its agenda was initially economic, the bloc has  increasingly become a kind of rival strategic alliance, especially with rising tensions between the United States and China and the war in Ukraine prompting Western-imposed sanctions against Russia.

Two of the founding members, China and India, already hold divergent positions geopolitically and have ongoing disputes over shared borders.

The addition of US allies such as the UAE and Saudi Arabia alongside countries rivalling Washington could hinder efforts at deepening cooperation between members, as the current influence of Russia and China has led to a more explicitly anti-Western leaning.

Such political bias could make the grouping look like a platform for defending the geopolitical agendas of Beijing and Moscow, causing concern among members focused on economic outreach with both eastern and western partners.

That said, the different foreign policy goals of BRICS countries are unlikely to pose a major obstacle, at least in the short run, as the collective has historically adopted a more pragmatic approach for the sake of a mutually beneficial arrangement for the region.

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Parsi believes that any future challenges will depend on the size of BRICS’ underlying goal.

“If they pursue a limited agenda, many of the differences these countries have may not touch their own agendas,” he said, “but if they try to adopt a rather political agenda, the diversity of this coalition can be a problem.”

In Borck’s view, far from being an anti-western alliance, prospective new members look to BRICS as a way “to upgrade relationships” with countries they consider important to be in touch with “in addition, not instead of, the West”.

“They won’t be sitting and following Western policies, they want to be part of the conversation, actively working toward a multipolar world,” he said.

Alessandra Bajec is a freelance journalist currently based in Tunis.

Follow her on Twitter: @AlessandraBajec