Saudi Arabia, Egypt, and Algeria have emerged as strong candidates to join the "BRICS" group, which currently houses 40% of the world's population and whose gross domestic product (GDP) exceeds the size of the economies of the major G7 by about four trillion dollars.
BRICS was founded with the intention of including China, India, Brazil, and Russia. BRICS is an acronym for five major emerging economies: Brazil, Russia, India, China, and South Africa, which joined in 2010 to add the letter "S" to the end of the word. However, it is currently seeking to expand its membership list to include larger countries, which would enhance its global capabilities.
BRICS has unique advantages that are not replicated in any other economic bloc in the world in the global production of food: grains, especially wheat, and meat, as it provides for 30% of the world’s needs in terms of commodities and products. Additionally, China, Russia, India, and Brazil are among the ten largest countries that maintain monetary reserves amounting to about 40% of total world reserves.
At the recent BRICS summit, China adopted a clear policy to support BRICS expansion and sought to hold consultations between the group and representatives of KSA, UAE, and Egypt, all of which are considered potential BRICS members, before Algeria submitted a formal request early this month.
According to observers, the alliance's expansion will achieve its main goal, which was announced in 2006, of having a bipolar world by forming a powerful economic and political bloc that competes with the West and its allies. The accession of Saudi Arabia, with its economic and political power, would strengthen the alliance, especially in light of the Saudi policy of establishing balanced relations with all countries around the world.
The group is hoping that its upcoming summit in South Africa next year will be the most important in the organization's history, as it could see the accession of a large number of countries all at once. In addition to the three Arab countries, Turkey and Indonesia have expressed strong interest in joining the bloc, which Goldman Sachs predicts will be able to compete with the economies of the world's richest countries by 2050.
A ROBUST ECONOMY
The BRICS alliance is eager for KSA to join. Russian President Vladimir Putin has repeatedly stated his support for Saudi Arabia's membership in the BRICS group, citing the country's policy and promising plans to diversify its economy, as well as its dominant position in the oil markets. At the same time, Beijing emphasizes that BRICS is not a closed alliance or an exclusive circle, but a big family of mutual support and partnership for win-win cooperation.
All economic reports highlight the strength of the Saudi economy, which had the second best economic performance among G20 countries in the third quarter of last year, with a quarterly growth rate of 5.7%. According to the National Labor Observatory's labor market benchmarking report, Saudi Arabia also ranked first in labor force growth rate, outperforming the G20 countries between 2012 and the end of 2021.
According to the Saudi General Authority for Statistics, the Saudi economy grew by 8.6% in the third quarter of 2022, compared to the same quarter in 2021, while the International Monetary Fund predicted that the Saudi economy would grow by 7.6% this year, the best growth rate among the G20.
According to economist Ayman Fouda, Saudi Arabia is a strong addition to any economic alliance in the world today. This was evident during the Russian-Ukrainian war, when world capitals turned to it for help in resolving Europe's energy crisis, emphasizing that the Kingdom always takes the decision that serves the well-being of its people and the growth of its economy.
In just two decades, trade between Saudi Arabia and China has increased more than 22 times, from $3 billion in 2000 to $67 billion in 2020, with Beijing now becoming SA’s primary trading partner. The trade balance is in Riyadh’s favor by about 11 billion dollars, with 39 billion of exports to Beijing and 28 billion of imports in 2020.
According to Fouda, the BRICS countries have recently given Saudi Arabia the status of "Dialogue Partner" in the Shanghai Cooperation Organization. Riyadh is the primary source of crude oil supplies to China. The two countries also have joint investments in the Belt and Road project, as well as in integrated refining and petrochemical complexes. They hope to "enhance cooperation in the energy sector supply chains by establishing a regional centre for Chinese factories to take advantage of Riyadh's unique location between three continents."
According to statements made by Li Kexin, a Chinese Ministry of Foreign Affairs official, Turkey, Egypt, and Saudi Arabia stand out among the countries seeking to join the coalition because they are already well-prepared.
Egypt is also keen on joining the bloc, which will achieve many gains for the country, especially in light of the group's establishment of a development bank with a capital of $100 billion to finance projects in the member states. Moreover, the majority of the coalition's members, China, Russia, and South Africa, have an influence on decision-making in Ethiopia and may contribute to resolving the deadlock over the Grand Ethiopian Renaissance Dam.
Ayman Fouda adds that Egypt's BRICS membership may help the transfer technology and industrialization from large industrial countries such as China, India, and Russia, as well as provide Egyptian exports with greater access to their markets, alleviate foreign currency problems particularly because the majority of Egypt’s imports come from the bloc.
Egypt's trade volume with BRICS members is increasing at a rapid pace. The trade between Cairo and Beijing recently approached $20 billion, while the trade between Cairo and Moscow was approximately $4.7 billion, $2.5 billion between Cairo and Brazil, and $7.2 billion between Cairo and India.
According to Dr. Salah Al-Din Fahmy, the head of the Scientific Research Unit at the International Center for Economic Consulting, accession to global economic blocs is beneficial for all countries, whether new or existing members, because they work to achieve interdependence and benefit for all.
The alliance sees Egypt’s accession as a great opportunity because of its large population, which constitutes its global demographic strength. Moreover, Cairo is currently very open to Africa and has plans to connect the continent by rail and road, such as Cairo–Cape Town Highway, providing a larger window for the bloc's exports to the African market, as well as being an important segment of the Chinese Silk Road.
Fahmy added that the economic blocs are working to expand the size of the market and improve the movement of investments and funds. In addition, this would benefit from the labor force surplus, create opportunities in different locations, provide consumers with cheaper commodities, and reduce the impact of external shocks on each country's economy through diversification of production and surplus transfer.
Algeria wants to join BRICS as well, and it was the only candidate to officially declare its desire to join, despite the fact that it is the only country on the African continent that supplies more than 60% of energy and gas to Europe. Algeria seeks to diversify its economy, wean itself off oil dependence, and achieve food security in particular, being a major wheat importer.
Moreover, Algeria and China signed a "second five-year plan for comprehensive strategic cooperation" for the years 2022-2026, with the goal of increasing cooperation in the fields of economy, trade, energy, agriculture, science and technology, space, health, and human and cultural communication.
In recent years, Chinese investment in Algeria has increased. Chinese firms are involved in major infrastructure projects in Algeria. They have also invested $7 billion in the phosphate sector to produce 5.4 million tons of agricultural fertilizer, as well as extracting iron ore worth $2 billion as a first stage.
Algeria and Russia have also recently announced drafting a new strategic document for future strengthening and intensification of relations. Furthermore, in 2021 Algeria received its first shipments of Russian wheat in four years, after its markets had continued to rely primarily on France for supply.
Fahmy concluded that Saudi Arabia, Egypt, and Algeria have great economic capabilities that make them a strong addition to the BRICS group, which entails injecting Chinese investments into each country through which the Silk Road passes, as well as implementing infrastructure that connects them to China, which already has large investments in the three countries.