What does the BRICS expansion mean for MENA and the world?
It has recently hit the news that the group of BRICS has invited six new members to join to the club from January 2024. The term BRIC (Brazil, Russia, India and China) was coined by Goldman Sachs in 2001 referring to the four emerging countries, which would dominate the world economy. The four countries have established a loose cooperation in 2010, a year later South Africa joined, and it has become officially the BRICS. Since then, it has been regarded as a representative of the Global South aimed at challenging the liberal international order based on U.S. hegemony and the role of the U.S. dollar. BRICS currently accounts for 40 % of the world population and around a quarter of the global GDP. Although the five member states share common interests regarding the international order, they have been divided by various conflicts, such as the border issue between India and China or the rivalry of Russia and China. Since 2022, the Russia-Ukraine War has been bringing the members even closer to each other. In March 2022, just before his official visit to China, Sergey Lavrov stated that Russia and its partners aimed at establishing a “multipolar, just, democratic world order”.
Among the six new members, four are from the Middle East, namely Saudi Arabia, Egypt, Iran and the United Arab Emirates. The remaining two countries – Ethiopia and Argentina – are important regional players from different continents. What is the significance of the extension of BRICS? First, it should be noted that the four Middle Eastern countries have been regarded as key players both economically and politically, while maintaining the highest level of engagement (comprehensive strategic partnership) with China. China has signed a number of agreements of various levels with most MENA countries. The agreement of the highest level has been signed with five countries from the region: the four aforementioned ones and Algeria.
We have been witnessing a gradual disengagement of the United States, called by many experts “the post-American Middle East”. The main pillar of Washington’s Middle East policy is to achieve a regional order – the Middle East Security Architecture – based on the U.S. principle of marginalizing Iran in the region. China, however, envisions a regional order engaging all state players, including Iran, in different infrastructural projects and political concessions. China has recently mediated between Saudi Arabia and Iran in March 2023, which resulted in the restoration of diplomatic relations to their pre-2016 level. The Middle East has been witnessing an unprecendented wave of normalization including the Abraham Accords, which have been signed by four Arab countries (Bahrain, Morocco, the United Arab Emirates, Saudi Arabia) and Israel. China has been perceived mainly as an economic player in the region, however with the latest successful mediation it is clearly a relevant political actor as well.
As the 21st century is dubbed the “century of Asia,” Middle Eastern countries have been engaging with other Asian countries on a deeper level. It has been called the “Asianization of the Middle East,” which is an acknowledgment of the shifting center of world economy towards the Indo-Pacific. From the Chinese point of view, one land and one naval route of its 10-year-old Belt and Road Initiative cross the Middle East. The naval chokepoints – the Strait of Hormuz, Bab al Mandeb, the Suez Canal, as well as, to a lesser extent, in the Mediterranean Sea – have utmost importance in interconnectivity projects.
Unlike the United States, China has been highly dependent on Middle Eastern hydrocarbon reserves. Energy is the most important driving force behind the cooperation with BRICS countries. The Middle East, including the sanctioned Iran, accounts for approximately 45–50 % of all Chinese oil imports. For the first time in history, China has become the largest trading partner of Saudi Arabia showing a significant transformation both the regional, as well as the world economy. Besides energy and trade related cooperation, China is one of the most important investors in many fields, building ports, nuclear power plants, as well as a number of other facilities.
Many experts have been arguing that the main goal of the recent expansion is to challenge U.S. role in global governance. The group has recently announced its aim to launch a common currency and dethrone the role of the US dollar in the world economy. Another important goal is to evade Western sanctions, which is especially important for Russia and Iran. However, experts have been divided over the potential of the new currency. At least a fiscal union and macroeconomic convergence are needed, and the members do not have a united voice on the issue. BRICS has also established the New Development Bank (NDP) by the five members aimed at financing projects. Shares have been distributed equally among the five founding members. In 2021, the United Arab Emirates and Egypt have joined as new members. However, it is highly problematic that Russia has been facing a number of sanctions since February 2022, limiting the scope of the Bank.
However, many new and old members have maintained political, economic, and military relations with the United States and the Western World. India’s relation to the United States has deepened under the Biden administration. Indi hosted the G20 summit in September 2023 and has adopted the IMEC (India-Middle East Economic Corridor) project aimed at connecting India with Europe. This plan is a U.S. supported project to balance the Chinese BRI mission. The United States is the still most important security provider for Saudi Arabia, the United Arab Emirates and Egypt. The purchase of advanced military technology and defense systems has remained in the hands of the United States, and China only engages in a light military footprint strategy. An invitation to join the BRICS does not mean that Saudi Arabia, Egypt and the United Arab Emirates would abandon their crucial American relations. For instance, the cooperation between Cairo and Washington goes back all the way to the 1979 peace treaty between Egypt and Israel.
Another feature we have to mention are the existing fault lines among the invited new members. There is an ongoing conflict between Egypt and Ethiopia over the river Nile as Addis Ababa has filled the Great Ethiopian Renaissance Dam with water, which is perceived by Cairo as an existential threat. Despite restoring diplomatic relations, Iran’s nuclear ambitions have been challenging the position of Saudi Arabia in the MENA region. It could cause a new wave of escalations like the one in 2019. Many argue that the current normalization process is more of a new form of competition among regional players rather than a regional peace effort. BRICS should engage with those internal fault lines among its members, which could seriously threaten stronger cooperation.
Meanwhile, it is necessary to emphasize that two major regional players have not been invited to join to BRICS: Israel and Turkey. Israel is the most important ally of the United States in the Middle Eastern region, despite its increasing cooperation with China. Turkey is a member of NATO, however, economic cooperation with emerging Asian countries is on the top of its agenda due to the economic crisis Ankara faces.
Given all the possible pros and cons of the BRICS expansion, for the four invited states the membership is an opportunity not to be missed. Yet, the impacts of these developments on world politics remain to be seen.
Another group playing an increasing role in the MENA region is the Shanghai Cooperation Organization (SCO): Iran joined the group in the summer of 2023 as a new member, and many Middle Eastern states are dialogue partners and have the intention to join. However, these expansions would not replace the existing economic and political cooperation of the individual countries with the United States; they should rather be viewed as a sign of a more independent foreign and trade policy.
At least 40 nations have indicated that they would like to join the BRICS. The group’s rapid expansion demonstrates both its worldwide appeal and its desire to alter the global economy and have an impact on world politics. The group’s percentage of the global oil output will rise from 20,4% to 43,1% with the addition of the six new members.