United Kingdom
Source: thearabweekly.com

Planning Minister Hala al-Said said Egypt sought to bolster cooperation with the bloc and with its New Development Bank (NDB) after meeting NDB President Dilma Rousseff at the Asian Financial Forum in Hong Kong.

Egypt aims to deepen ties with other BRICS members after acceding to the group at the start of this year, and trade volumes have already been strengthening, the country's planning minister said on Thursday.

Planning Minister Hala al-Said said Egypt sought to bolster cooperation with the bloc and with its New Development Bank (NDB) after meeting NDB President Dilma Rousseff at the Asian Financial Forum in Hong Kong.

Imports from BRICS countries, originally Brazil, Russia, India, China and South Africa, had risen by about 33 percent since 2020 and exports to BRICS members had increased by 75 percent, the planning ministry said in a statement.

Egypt is one of six countries that were invited to join BRICS from January 1 this year.

Egypt hopes its inclusion in the group will help ease a chronic shortage of foreign currency by reducing the need for US dollar transactions and attract new investment, though analysts say it may take time before any benefits appear.

USA
Source: www.washingtonpost.com

Russia is increasingly confident that deepening economic and diplomatic ties with China and the Global South will allow it to challenge the international financial system dominated by the United States and undermine the West, according to Kremlin documents and interviews with Russian officials and business executives.

Russia has been buoyed by its success in holding off a Western-backed Ukrainian counteroffensive followed by political stalemates in Washington and Brussels over continued funding for Kyiv. In Moscow's view, the U.S. backing of Israel's invasion of Gaza has damaged Washington's standing in many parts of the world. The confluence of events has led to a surge of optimism about Russia's global position.

Officials in Moscow point to growing trade with China, military cooperation with Iran, diplomatic outreach in the Arab world and the expansion of the BRICS grouping of major emerging economies — Brazil, Russia, India, China and South Africa — to include Iran, Saudi Arabia, the United Arab Emirates, Egypt and Ethiopia.

The BRICS expansion demonstrated the group's "growing authority and role in world affairs," and its work will focus on "sovereign equality," Russian President Vladimir Putin said in a Jan. 1 statement as Russia assumed the chairmanship of the group. The Kremlin has begun to refer to itself as part of the "Global Majority."

Internal Russian Security Council documents obtained by a European intelligence service and reviewed by The Washington Post, show that the Kremlin convened meetings in 2022 and 2023 on ways to undermine the dollar's role as the world's reserve currency. The ultimate goal, one of the documents stated, was to dismantle the post-World War II global financial system and the power it gives Washington.

"One of the most important tasks is to create a new world order," one of the documents dated April 3, 2023, states. "Western countries led by the United States have tried to impose their own structure, based on their dominance."

Another document, written by a close ally of Security Council chief Nikolai Patrushev and circulated in the Kremlin this summer, advocated greater cooperation between China and Russia on artificial intelligence, cyber systems and the "internet of things." As part of that, the document envisioned Beijing and Moscow creating a new financial system and a Eurasian digital currency based on alternative payment systems, such as blockchain, to bypass the Western dominance of global financial transactions.

Kremlin spokesman Dmitry Peskov denied that Russia was working to undermine U.S. dominance of the global financial system, but he conceded it aimed to create alternatives, saying actions taken by "the collective West" were undermining trust without any assistance from Moscow. The Kremlin "is following [the situation] carefully and building a new system of economic neurons because the previous system turned out to be unreliable, false and dangerous," he said in comments to The Post.

The belief that Russia has proved more militarily and economically resilient than the West anticipated has consolidated Putin's domestic standing ahead of a presidential election in March, particularly with certain members of the Russian elite who have shown long-standing skepticism about the war in Ukraine and initial concern about the impact of Western sanctions.

"There has been a certain consolidation in the Russian elite," said a Russian academic with close ties to the country's senior diplomats. "There is a certain expectation that the situation will further change in Russia's favor."

Russian billionaires like Oleg Deripaska, who initially publicly spoke in opposition to the war in Ukraine, saying it would lead to economic crisis in Russia, now describe Russia's break with the West as a catalyst for reshaping global economic patterns.

"Alternative payment systems and debt markets will be created: In China on the basis of the yuan, and in India and the Middle East on the basis of cryptocurrencies," Deripaska wrote on Jan. 20 on Telegram, the messaging app. "In a few years, sanctions will no longer be a brake on global trade and investment."

European security officials said that Moscow is very much Beijing's junior partner and that it is unclear China has any real interest in aligning with the Kremlin's grandiose visions. But Russia's focus on using its global position to disrupt the West is intensifying, the officials said, including in the Middle East.

Russia is "not omnipotent, but they try to use all possibilities. They are very consistent and systematic," said one senior European official who, like others, spoke on the condition of anonymity to discuss sensitive matters.

While most of the West still hopes for a return to the previous order, the senior European security official said, Russia's billionaires "have understood that the old life is finished and now is the time to create a new future."

The Russians, the official continued, "have passed through the Rubicon, and the West has not. The West wants to return to business as usual. But the Russians understood that this is impossible, and they are trying to build a new world."

Since Hamas's Oct. 7 attack on Israel, the Kremlin has appeared to jettison its carefully crafted post-Soviet relationship with Israel in favor of deepening ties with the Arab world. In October, Russia hosted a joint delegation of high-ranking Hamas members and Iran's deputy foreign minister, Ali Bagheri Kani. Putin made a rare visit to the United Arab Emirates and Saudi Arabia in December, his first trip outside China, Iran and former Soviet states since the invasion of Ukraine.

"Through Iran, it is possible [for Moscow] to make this [Middle East] situation so acute that attention can be further distracted from Ukraine," one Russian official said.

"Russia still has a big negative potential," he said. "There are a lot of hot spots that Russia can interfere in."

With a host of elections taking place in Europe this year, the State Department has warned that Russia will conduct "information operations" aimed at further undermining Western support for Ukraine.

"Russia is hoping that the number of elections in Europe this year could change what has been a remarkable coalition and disciplined opposition to its war," James P. Rubin, U.S. special envoy and coordinator of the department's Global Engagement Center.

And deep divisions in Washington, including over continued funding for Ukraine, have fostered the belief in Moscow and elsewhere that the United States is paralyzed, said Matthew Redhead, former head of Global Strategic Intelligence at HSBC and currently a senior associate fellow at the Royal United Services Institute, a British think tank.

"It means that hostile states like Russia and Iran and potentially China are going to start pushing the boundaries further to see what reaction they will get," Redhead said. "It is an invitation to escalate."

For Mikhail Khodorkovsky, the exiled business executive who spent 10 years in Russian jail after falling afoul of Putin, the West appears to be at an inflection point. How it responds to increasing global disorder — and Russian aggression — could determine the number of conflicts it faces in the decades to come.

"Putin of course is trying to undermine the world order because this for him is the only strategy to survive," said Khodorkovsky, who is now based in London. After allowing Russia to cross red lines in Syria and then withdrawing from Afghanistan, followed by piecemeal support for Ukraine, Khodorkovsky said, "it looks from the outside like the U.S. is losing the Third World War."

Gen. Richard Barrons, former commander of the British military's Joint Forces Command, said the risks are growing of strategic failure for the West because of the lack of political will to supply Ukraine with adequate amounts of weapons and to turn around military industrial production.

"In terms of latent military power and economic strength, it is absolutely ridiculous that the West is being held hostage by something as relatively puny as Russia," he said. "Putin believes that if he is stubborn enough for long enough, we, the feeble West, will walk away — and he could be right. … That won't just be shameful. That will be an act of strategic self-harm."

USA
Source: www.lexology.com

The UAE expands its horizons as it officially joins the BRICS which is considered a start of a new international partnership to further implement bilateral trade across many regions for the UAE.

The BRICS bloc is an informal group, founded in 2009, to provide a platform for its members to develop deeper connections among its members and cooperate on economic growth. The word itself is an acronym which initially comprised of five prominent national economies: Brazil, Russia, India, China, and South Africa. Members engage in unofficial discussions, which allows more flexibility in decision-making. The goal is to strengthen geopolitical impact, promote economic expansion, and cooperatively address global obstacles. According to the bloc, "BRICS overtook the G7's global GDP contribution, with the group accounting for almost one-third of worldwide economic activity." Moreover, BRICS leaders meet annually for a summit. They Invited six countries during their fifteenth summit in 2023, resulting in UAE officially joining BRICS.

The UAE's diverse economy and expertise in many sectors such as infrastructure and energy smoothly align with the strengths and goals of the existing BRICS members. Additionally, this alliance offers opportunities for economic growth in the UAE, cultivating collaborations in trade and investment, and strengthening international partnerships. As it did with the UAE hosting WORLD EXPO 2020 and COP28, we foresee that the UAE's membership in the BRICS shall present prospects to host additional international gatherings.

Since BRICS nations are inherently diverse in terms of policies, economic structures and priorities, navigating this diversity could be demanding. The UAE would require an intense amount of diplomatic and negotiation to align its economic policies with its new partners.

As we know, the UAE joining BRICS opens further doors for the UAE for economic opportunities, boosting trade, securing a stronger global foothold, and increasing flexibility through building more international alliances. The UAE has always been the flagbearer of being progressive and rising to the occasion, we look ahead to see what this new partnership holds for the future of the UAE.

Russia
Source: www.mid.ru

On January 19, Minister Counsellor, Deputy Chief of Mission of the Russian Embassy in India Roman Babushkin took part in the conference "Emergence of BRICS Plus and Its New Trajectory" held at the Institute of Social Science. In his address, he highlighted the Russian chairmanship's priorities in the association in 2024.

The conference was attended by political scientists and representatives of academia, foreign diplomats, as well as retired Indian Ambassador to Mexico, Myanmar and South Africa Rajeev Bhatia.

Russia
Source: www.mid.ru

On January 22, Mr. Alexey Idamkin, Consul General of the Russian Federation in Kolkata, participated in a panel discussion organized by the Observer Research Foundation (ORF) on "Beyond the West: BRICS as a Catalyst for South-South Cooperation".

The discussion aimed to assess how the BRICS nations contribute to the global economic and political landscape. Special focus was given to the inclusion of Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates, as well as the contribution of the BRICS to the promotion of international development, especially in the context of the Global South. In his speech, Mr. Idamkin emphasized the priorities of the Russian BRICS Chairmanship in 2024, as well as the impact of the enlargement of the association on global energy policy, economic cooperation and broader geopolitical dynamics.

Other panelists included Mark Hallerberg, Professor of Public Management and Political Economy at the Hertie School (Berlin, Germany), Ana Saggioro Garcia, General Coordinator of the BRICS Policy Centre (Brazil), Swati Prabhu, Associate Fellow at ORF (India), Sriparna Pathak, Associate Professor and Associate Dean of Admissions of the Jindal School of International Affairs of O.P. Jindal Global University (India, virtually), Mousumi Dasgupta, Assistant Professor, Department of Political Science, Victoria Institution (College) (India), Fulufhelo Godfrey Netswera, Head of the BRICS Research Institute and Executive Dean, Faculty of Management Studies, Durban Institute of Technology (South Africa, virtually).

Canada
Source: www.geopoliticalmonitor.com

Following the conclusion of the 2023 BRICS meeting held in Johannesburg, South Africa, the official summit declaration announced that in January 2024 the BRICS group of emerging market economies would undertake in the words of the Chinese President an 'historic' expansion and admit five new member countries: Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (Argentina was also invited to join, but it's new President Javier Milei declined the offer). While the term BRIC first came to fruition via the work of Jim O'Neill in 2001 the official creation and formalization of the BRIC bloc by its four founding members: Brazil, Russia, India and China, did not take place until 2009, followed by the admission of South Africa in 2010. As a group of high growth emerging economies, even before its recent expansion, the group accounted for 26% of global GDP and 40.8% of the global population. However, as important as the BRICS countries are economically, by their own admission the BRICS grouping is more than an economic forum, in that they commit themselves to the creation of a "more representative, fairer international order, a reinvigorated and reformed multilateral system." Exactly what representative, fairer, and reformed translates as for the BRICS grouping is unclear, but it is often interpreted to mean that the BRICS will act as a counterweight or indeed a means to ultimately supersede Western dominance economically and politically. It is important, therefore, to reflect upon the recent expansion of the BRICS group and the implications and likely challenges for future global governance, economics, and geopolitics given the BRICS grouping is likely to expand its membership further in the years ahead.

From an economic perspective the new membership will generate an additional $2.6 trillion in GDP terms representing an overall BRICS economy of $28.5 trillion and 28.1% of global output. Yet, while a significant economic grouping, by comparison G7 countries continue to dominate global output, accounting for 43.2% of global GDP.

However, if forecasts are correct the size and therefore importance of the G7 economies will reduce over the coming decades, while many of the BRICS economies are projected to grow significantly. This is particularly the case in relation to new members such as Egypt and Ethiopia who are projected to grow by 635% and 1,170% respectively in GDP terms by 2050.

From a trading perspective the expanded group accounts for more than 43% of global oil production, doubling its capacity, and enhancing its geostrategic reach into the Middle East via the admission of Saudi Arabia, Iran, and the UAE. Further still, the expanded group now accounts for 25% of global exports, while the original four BRIC members account for and control 72.5% of global reserves of rare earth minerals, with China alone producing 85% of all globally refined earths in 2020. Critical for the production of a huge range of products from high-tech weaponry, but also every day consumables including electric cars, circuit boards, semiconductors, and mobile phones, rare earths face huge demand, as part of the global supply chain for products that are consumed by the rapidly expanding global middle class – of which China, India, Brazil, and Egypt alone will account for 59% of all new middle classes in 2024. Ultimately the newly enlarged BRICS grouping, which now accounts for 45% of the world's population, will continue to grow in economic and geostrategic importance shifting the economic center of gravity towards the Global South.

However, the BRICS do not limit their ambitions to an economic agenda, but rather seek to leverage their collective economic weight to pursue a wider political ambition. Believing that the progress of emerging and developing countries are hindered by a Western centric economic and political order, the BRICS have engaged in a number of actions to rebalance and counteract the existing global order alongside its institutions.

Notably in order to reduce dependence on the World Bank and International Monetary Fund -institutions that are historically led by Europeans and Americans and are often criticized for their lack of transparency and draconian structural adjustment programs – the BRICS established the New Development Bank in 2015 to mobilize resources for infrastructure and sustainable development projects. With initial authorized capital of $100 billion, by 2022 the bank has assigned $32.8 billion to 96 approved projects, helping to build and upgrade 15,700 km of roads, 850 bridges, and 260 km of rail transit networks. Facilitating growth and development on more favorable terms, while simultaneously reducing dependence on Western-led institutions articulates a clear message about the shifting sands of global power.

From a diplomatic perspective the hosting of the annual BRICS summit allows the group to meet and discuss issues they believe are specifically important to emerging market economies. Symbolically, this sends a signal to the West, and particularly the G7 countries, that they no longer exclusively control the global agenda via membership of their exclusive economic and financial forums, which have historically favored their market-based economies and financial systems.

Indeed, although a number of the BRICS membership are keen to reform the international monetary system, and challenge the dominance of the US dollar, it is less clear how this will be achieved. While the creation of a common BRICS currency would in theory reduce vulnerability to dollar exchange fluctuations; the implementation of a BRICS currency is, at best, many years away given the lack of macroeconomic convergence widely considered to be critical to a successful common currency. Further rebuffing any prospect of dethroning the dollar, according to the Bank for International Settlements, the US Dollar remains the single-most traded currency, accounting for almost 90% of all foreign exchange transactions. Second, as the world's reserve currency since 1944, the dollar accounts for 60% of global foreign exchange reserves whereas by comparison the Chinese renminbi accounts for 3%. Third, the dollar is easily convertible (liquid), widely accepted as a medium of exchange, and largely free from capital controls, of which the same cannot be said of the Chinese, Russian, Indian and South African currencies. In short, while the BRICS will likely increase their use of local currencies for bilateral trade, in part reducing their exposure to foreign exchange volatility, the demise of the US dollar and the introduction of a BRICS common currency is overstated.

Therefore, while enlargement has expanded the BRICS economic power and geostrategic reach, the BRICS face a number of domestic and geopolitical challenges, which will limit both deeper integration, and ultimately the group's ability to shift the balance of global power in their favor.

First, while the collective might of the BRICS economies is beyond question, the groups leverage on the international stage is highly reliant on the $17.9 trillion Chinese economy, which accounts for 62.9% of the groups economic output. This dependency is problematic for a number of reasons, not least because it makes China disproportionately powerful within the group itself, but interrelated to this point is bilateral power dynamic between China and India. For example, although India has the second largest BRICS economy, China's economy is five times larger in GDP terms; and while the BRICS may talk about 'sovereign equality' and 'mutual respect,' ultimately 'money talks' giving China greater leverage and scope to implement its world view and interpretation of any recalibrated global governance system.

Yet, while China and India agree on a need to rebalance the distribution of global power better reflecting their elevated status, as competing economic superpowers and geostrategic rivals, bilateral relations are often strained. Rarely in agreement, heightened tensions around ongoing border disputes in the Himalayan region and India's antipathy to China's transcontinental Belt and Road Initiative are unlikely to result in consensus, yet if China and India cannot agree a common path, it is difficult to envisage how the wider BRICS grouping can ever achieve their full potential.

Second, with China forecast to have the largest global economy in both 2050 and 2075, recency bias clouds significant headwinds facing the Chinese economy. For instance, how Beijing's political leadership chooses to address the harsh domestic realities of a slowing economy, soaring youth unemployment, an ageing and declining population, alongside the increasing potential for contagion in the overheated Chinese property market – a sector which accounts for 25% of China's GDP – may all yet impact the global standing of the BRICS group.

Furthermore, economic uncertainty coupled with increased geopolitical tensions, particularly between China and the United States are leading companies to reduce their exposure to China, as demonstrated by a drastic fall in FDI from $189 billion year on year to $15 billion in 2023. Moreover, China's direct investment liabilities appear to show that investors are rapidly repatriating profits and exiting the Chinese market. Whether this remains a long-term trend remains to be seen. However, with China facing considerable domestic challenges, investors are nervous, and this is before considering the consequences that may arise from any military conflict with Taiwan, an issue on which China is becoming increasingly assertive.

Indeed, Russia's invasion of Ukraine in 2022 has laid bare the consequences of a major military conflict. While Russia has tarnished the BRICS reputation for promoting peace and security, one of its founding members and major economies is now ranked amongst the world's riskiest countries in which to conduct international business. Not a good look, and one that was reinforced by a recent presidential decree allowing for the seizure of foreign owned companies and assets in Russia.

If Russia's extraterritorial activities in Ukraine are causing an image problem, the BRICS brand, as a movement for the promotion of peace, security and stability is hardly enhanced via its recently expanded membership, of whom many have deep-seated and historical geopolitical rivalries. Iran, a regional power, is the group's problem child. Economically unimportant but of geostrategic importance, Iran's membership is highly controversial, in that Iran is considered by many to be the world's largest state sponsor of terrorism regularly calling for the destruction of the United States and the eradication of Israel. Complicating matters further, Iran is currently engaged in a number of regional conflicts via its proxies and a decade long war against fellow BRICS member and regional rival Saudi Arabia in Yemen. As the only new member with a trillion dollar economy, Saudi Arabia, has also attracted criticism for its poor human rights record and extrajudicial killings, while on the African continent Egypt and Ethiopia are engaged in a stand-off over The Grand Ethiopian Renaissance Dam. If utilized in an unfriendly manner, the dam represents an existential threat to Egypt given 85% of Nile River water emanates upstream of the dam on Ethiopia's Blue Nile.

In summary, the expanded BRICS are economically strong(er), yet geopolitically weak(er), and while they may rebalance the global order, any thoughts of replacing it are misguided. The eclectic mix of different political, economic, and cultural systems, including democracies, autocratic monarchies, authoritarian regimes, and an Islamic theocracy lay bare the difficulties associated with reaching a common ground on any new system of global governance. By contrast the Western dominated system they seek to counteract, while not perfect, is far more homogenous, founded on a well-established rule-based order, and without the scale of geopolitical tensions that engulf the newly expanded BRICS.

Germany
Source: www.econpol.eu

Out of the more than 40 countries that have expressed interest in joining the BRICS bloc, the leaders of the five founding members announced in August 2023 that Saudi Arabia, Iran, Ethiopia, Egypt, Argentina, and the United Arab Emirates would join the BRICS in January 2024. The BRICS+ countries now represent around 45 percent of the world's population and around a third of global GDP. Originally the BRICS were founded as an economic alternative to the Western bloc led by the USA and the EU. The idea was to offer the countries of the Global South a counterweight to Western institutions. In the new EconPol Forum our authors discuss the geoeconomic implications of the BRICS enlargement.

Qatar
Source: mecouncil.org

BRICS has added new members from the Middle East. Can it now live up to its aspirations to reshape global development?

At the start of this year, the so-called BRICS group of economies, namely Brazil, Russia, India, China, and South Africa, expanded its membership to five new countries, four of which are from the Middle East and North Africa region. As a global and heterodox bloc comprised of what were once termed "developing nations," the expanded collective holds tremendous economic clout and, in principle, could exert significant influence over how global development is conducted in the future. But will they do so?

After the inclusion of Saudi Arabia, the United Arab Emirates, Iran, and Egypt—as well as Ethiopia—BRICS now comprises 28 percent of the world's economy with a total GDP of $28.6 trillion, along with 45 percent of its population. Notably, the new members could play an important role in the work of two BRICS institutions established in 2015—the New Development Bank (NDB) and Contingent Reserve Agreement (CRA)—which are intended to provide alternatives to Western multilateral institutions like the World Bank (IBRD) and International Monetary Fund (IMF). When they were created, their proponents heralded the dawn of a new era in development. Some viewed it as a moment of liberation, in which developing countries would no longer remain under the thumb of former colonial powers or Western political and economic interests. Others saw it as a helpful effort to rebalance the governance of international financial institutions, whose structures had failed to keep pace with the expansion of the global south.

The NDB would be smaller and nimbler, so the argument went, as well as more responsive to its members. As such, it claimed a unique status for itself as an institution "created by economically more developed countries for economically more developed countries." The reality so far has been underwhelming. The NDB has lent $32 billion for 96 projects from its creation to the present, whereas the World Bank loaned over three times that amount in 2021 alone.

The CRA has yet to be used and was barely mentioned in the communique from the BRICS' Johannesburg summit in August 2023. Yet the promise of new members, including cash flush nations such as Saudi Arabia and the UAE, has enhanced the prospect that the NDB and CRA may eventually raise their game and become more significant players in global development.

Whether this will actually happen relies upon two important and interrelated questions: what will these entities do, and how will they do it? Regarding the "what" or substantive question, the NDB's portfolio is unremarkable. Its focus upon six areas under the broader rubric of infrastructure and sustainable development—clean energy and energy efficiency, transport infrastructure, water and sanitation, environmental protection, social infrastructure and digital infrastructure—is helpful but also common among Multilateral Development Banks (MDBs). Indeed, many MDBs are already active in this space, bringing significantly more experience, expertise, and capital to bear—at least for now.

For example, between 2016 and 2021, a World Bank program known as the Digital Development Partnership leveraged $10.7 billion in lending towards information technologies in over 80 countries. The World Bank has focused upon a host of digital services and applications, such as expanding mobile broadband internet, migrating government systems to the cloud, cybersecurity, and a broad spectrum of sector specific applications in areas ranging from health to education to urban transport. The NDB loaned $300 million for one project during this period, a non-sovereign loan to support the expansion of cellular network and cloud services in Russia.

BRICS countries such as China, India and Russia have world-class expertise in digital development, and one would expect their engagement to grow in this area. Yet it is hard to see the NDB as being more than a niche player in many of its chosen sectors over the next decade or more, picking up projects that other donors have elected to pass on or are prohibited from supporting due to safeguards or other reasons. Established institutions have a larger global footprint and an inherent advantage in being able to accumulate and disseminate knowledge across a much broader range of countries, economic systems, and administrative traditions.

The one potential exception is funding for climate change—an area where the needs are vast and current donor contributions are woefully inadequate. Estimates of the additional resources required to support the transition away from fossil fuels to green energy and to make infrastructure more climate-resilient range between $2.7 and $4.5 trillion annually, whereas donors are currently struggling to meet their COP15 goal of mobilizing $100 billion per year. A variety of creative financing solutions are required, including the mobilization of resources from non-traditional sources, and the NDB can make a welcome and badly needed contribution in this area.

Beyond the "what" question, the "how" question of whether the new BRICS members will enhance the bloc's development work is in many respects more interesting. The NDB's focus on raising capital in local markets, bringing in private sector participation, and the use of country systems—if successful—could provide valuable lessons for other MDBs. The NDB could leverage additional resources for development that would otherwise go untapped and help fill the large gap in climate-related funding outlined above.

The professed goal of many donor organizations has long been to use a recipient country's own system of laws, regulations, and procedures for procurement and financial management in order to ease the burden on recipients, yet progress on this front has often remained elusive. If the BRICS are successful, it could provide lessons for other contexts and build momentum for a country systems-centric approach more broadly.

To become the operational exemplar that it aspires to be, the NDB has work to do. Various voices have noted that the new bank needs to pay greater attention to the safeguards it puts in place to regulate social and environmental impact, as well as improve transparency in its operations.

Ultimately, the NDB and CRA are likely to fall short of the extravagant hopes and aspirations of their proponents. They will not fundamentally reorient the way in which development lending occurs, let alone supplant traditional actors such as the World Bank and the IMF. Yet they could play an important role in mitigating the dangers of climate change and in simplifying the oversight and management of development projects through the use of country systems. And that may over time prove to be a more valuable and enduring contribution.

The opinions expressed in this article are those of the author and do not necessarily reflect the views of the Middle East Council on Global Affairs.

UAE
Source: www.arabianbusiness.com

The inclusion is poised to reshape the business environment in these countries, offering a fresh landscape of possibilities for companies operating there.

The opportunity to leverage new trade partnerships and investment opportunities within the BRICS nations is both a significant step towards global economic diversification and a complex challenge. Image: Shutterstock The BRICS bloc, comprising Brazil, Russia, India, China, and South Africa, stands as a testament to the growing economic prowess of emerging markets. Established to foster greater economic collaboration and development among its members, the bloc wields significant influence on the global economic stage, representing over 40 percent of the world's population and contributing substantially to global GDP.

Recently, this influential group opened its doors to the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA), marking a significant expansion. The inclusion of these two nations, both economic heavyweights in the Middle East, was motivated by their robust economic profiles, strategic global positions, and potential to enhance the bloc's collective economic strength and geopolitical reach.

This expansion into a more inclusive, diversified international economic landscape highlights the growing importance and influence of emerging economies outside of the traditional Western sphere.

For businesses in the UAE, KSA, and the broader region, this development heralds new opportunities and challenges. It opens up avenues for enhanced trade and investment, access to larger markets, and potential for greater geopolitical influence. This move is poised to reshape the business environment in these countries, offering a fresh landscape of possibilities for companies operating there.

Economic implications

The entry of the UAE and Saudi Arabia into the BRICS bloc represents a significant evolution in global economic relationships, integrating two of the Middle East's most robust economies into a powerful collective.

Both the UAE and Saudi Arabia, renowned for their substantial per capita wealth and extensive sovereign funds, stand to gain significantly from this alliance. Their inclusion in BRICS could amplify opportunities in investment, trade, and commerce. Despite global economic challenges, these nations have shown resilience and continuous growth.

Saudi Arabia, for instance, recorded a remarkable 8.7 percent growth in 2022, the highest among the world's major economies, with a forecast for continued expansion, albeit at a moderated pace. This growth trajectory aligns with the kingdom's Vision 2030, emphasising diversification beyond oil.

The entry of the UAE and Saudi Arabia into the BRICS bloc represents a significant evolution in global economic relationships Similarly, the UAE's economic projections remain positive, with an anticipated overall growth of 3.4 percent in 2023. This includes a balanced expansion across oil and non-oil sectors, the latter expected to grow by 4.5 percent. Key sectors like tourism, real estate, construction, transport, and manufacturing are driving this growth, supported by increased capital expenditure.

For both nations, joining BRICS opens up new market access and the potential for creating synergies with member countries, especially in technology, energy, and infrastructure. The UAE, with its sophisticated logistics and trade networks, is poised to become a strategic hub for BRICS expansion in the Middle East and Africa. Meanwhile, Saudi Arabia's energy sector could provide vital resources for the economic growth of BRICS countries.

The integration of these Gulf economies into the BRICS framework is also likely to result in a more unified stance in global economic discussions. This collaboration challenges the dominance of Western economies and paves the way for a more diversified, multipolar economic order. It represents a recalibration of economic policies and alliances, with the UAE and Saudi Arabia leveraging the collective influence of BRICS to further their global economic interests.

Political ramifications

The expansion of the BRICS bloc is a strategic development that resonates positively against the backdrop of current global economic and geopolitical challenges. It symbolises a proactive step by these nations in navigating the complexities of today's international relations.

The UAE and KSA's accession to BRICS signals a notable shift in their geopolitical strategies, reflecting a desire to expand their global influence and engagement. Moving beyond their traditional alignments, particularly in diplomatic and security domains, this move represents a diversification of their international alliances.

Aligning with BRICS nations like Russia, China, and India, the UAE and KSA are carving out a role alongside nations that are increasingly seen as alternatives to Western dominance in global politics. This strategic realignment suggests a move towards a more globally balanced distribution of power, where influence is more distributed and not confined to any single bloc.

The expansion of the BRICS bloc is a strategic development that resonates positively against the backdrop of current global economic and geopolitical challenges. Image: Shutterstock Moreover, the development is likely to inject new perspectives into the bloc's handling of key global issues. With their unique geopolitical positions, the UAE and KSA can contribute significantly to discussions on energy security, climate change, and regional conflicts.

However, the shift could also lead to tensions with traditional allies and global powers who may view this realignment as a strategic counterbalance to their interests. The UAE and KSA will need to navigate these complex dynamics carefully, balancing new partnerships with BRICS while maintaining existing alliances. This delicate diplomatic balancing act will be crucial in defining their roles and influence in the evolving global political landscape.

Business perspective

The integration of the UAE and KSA into the BRICS bloc signifies a transformative phase for the business sector in these countries and the broader region. This strategic integration is set to unlock a spectrum of opportunities while also posing new challenges for businesses.

Businesses in the UAE and KSA will now have enhanced access to the expansive markets within the BRICS nations. This is particularly advantageous for sectors like technology, renewable energy, and manufacturing. Furthermore, the strategic locations of the UAE and KSA could transform them into crucial trade hubs, bridging commerce between BRICS countries and the Middle East and African regions.

The stable economies of the UAE and KSA, coupled with their diversification initiatives, are likely to attract significant investments from other BRICS nations. Such investments promise to fuel further innovation, technological advancement, and infrastructure development.

Businesses in the UAE (pictured) and KSA will now have enhanced access to the expansive markets within the BRICS nations As these nations align more closely with BRICS, businesses will need to adapt to potential changes in trade tariffs, customs regulations, and compliance standards. Agility and informed decision-making will be key in navigating this evolving regulatory landscape.

Another important aspect to watch is the potential shift towards bilateral trade in local currencies. Following the UAE and India's agreement to promote the use of local currencies in cross-border transactions, there's an anticipation of increased bilateral trade in local currencies between BRICS nations. This move could streamline transactions and enhance economic cooperation among these countries, particularly in light of discussions for similar arrangements with other nations.

Embracing new horizons

In essence, the inclusion of the UAE and KSA in the BRICS bloc heralds a new era for businesses in these regions, characterised by expanded market access and increased investment opportunities. The opportunity to leverage new trade partnerships and investment opportunities within the BRICS nations is both a significant step towards global economic diversification and a complex challenge. Businesses must be ready to understand and adapt to the nuanced shifts in international trade laws, financial regulations, and political dynamics that come with this new economic alignment.

Russia
Source: www.mid.ru

On January 22, the Russian House in Trivandrum, Kerala, hosted a presentation of the new discussion forum "BRICS Druzhba".

The club is supposed to hold regular events bringing together local experts, mainly from the Indian South, teachers and students of regional universities.

Honorary Consul of Russia in Trivandrum, Director of the Russian House Ratheesh Nair underscored that the forum launched in the context of the Russian chairmanship of BRICS in 2024, will serve as a platform for promoting public diplomacy and raising awareness of trade opportunities among member countries of the association.

The opening ceremony was addressed by former Indian Ambassador Thettalil Parameswaran Pillai Sreenivasan, who noted that in the current geopolitical conditions the expanded BRICS can play an important role in formation of a more just world order.

An exhibition of paintings dedicated to the culture, history and traditions of the BRICS member countries was timed to coincide with the launch of the discussion club. The canvases featured portraits of Leo Tolstoy, Mahatma Gandhi, Alexander Pushkin, Nelson Mandela as well as outstanding architectural structures and monuments – the Taj Mahal, the Great Wall of China, the statue of Christ the Redeemer, etc.

The exhibition will be open at the Russian House till January 25.