BRICS Nations Open Door to Middle East in Historic Expansion
Saudi Arabia, Iran, the United Arab Emirates, and Egypt are set to become full members of BRICS, with potential ramifications for the global economy
South Africa’s President Cyril Ramaphosa announced on Thursday that six new countries would join the BRICS economic bloc. The announcement came on the last day of the BRICS summit, an annual meeting of the leaders of Brazil, Russia, India, China, and South Africa. Four of the six countries invited to join are in the Middle East—Saudi Arabia, Iran, the United Arab Emirates, and Egypt—suggesting a strong inclination to include Middle Eastern nations in the alliance. Argentina and Ethiopia are the other two invitees.
The economic alliance was initially conceived of in 2001 as BRIC, when Goldman Sachs economist Jim O’Neill proposed that Brazil, Russia, India, and China would control the global economy by 2050. The first official BRIC summit was held in 2009. In 2010, South Africa joined the bloc. After South Africa’s entry, no other countries had been invited to join until last week. The six new countries will become full members by January next year.
Mohammed Baharoon, director general of the Dubai Public Policy Research Center, told The Media Line that the additions represent a shift in the nature of the group, reflecting global economic dynamics.
Adding existing oil producers to the manufacturing countries makes a lot of sense
He noted that BRICS countries see themselves as the major economic engine for the Global South. “Adding existing oil producers to the manufacturing countries makes a lot of sense,” he said.
India, China, and South Africa import oil, while Iran, Saudi Arabia, and the UAE produce it. Magdalena Karolak, a professor of humanities and social sciences in the UAE, told The Media Line that introducing oil-producing Middle Eastern countries to the bloc will benefit the existing members as well as the invitees.
“Participation in a common economic bloc will facilitate the exchange of goods between them overall, and, if the announcements are put into practice, would ultimately make it independent from a dollar-based exchange system,” she said.
Oil is currently traded only in dollars. The potential transition away from a dollar system may affect global markets, she said.
Karolak noted that trading oil in dollars allows for effective sanctions on countries like Iran and Russia. Transitioning away from a dollar system will at first benefit mostly countries under sanctions, but if BRICS members begin trading entirely in their local currencies, it will have global implications, she said.
This enlarged consortium would now encompass the leading oil-exporting nations in the world, collectively representing roughly 42% of the world’s oil production.
Nadeem Ahmed Moonakal, a research scholar at the Rasanah International Institute for Iranian Studies in Riyadh, told The Media Line that the new alliance would shift dynamics around global oil production and export.
“This enlarged consortium would now encompass the leading oil-exporting nations in the world, collectively representing roughly 42% of the world’s oil production,” he said.
He explained that the oil market is still overseen by OPEC+, a bloc which comprises the 13 members of the Organization of the Petroleum Exporting Countries and 10 additional countries. In the future, an expanded BRICS assembly could wield considerable influence within energy markets, he said, considering that BRICS now encompasses major oil-exporting countries as well as India and China, two of the largest energy importers.
Baharoon said that the new alliance will also help Middle Eastern countries diversify their economic outreach and enter nontraditional markets. “It will open up new funding tools for countries like Egypt, Ethiopia, and Iran for their development plans,” he said.
Karolak noted that most BRICS members, new and old, share a common economic outlook based on a pragmatic approach. That approach was apparent in the group’s lack of condemnation for the Russian invasion of Ukraine, she said.
While the countries’ economic agendas are more or less aligned, their geopolitical interests are more varied.
“Each of the BRICS bloc participants and invitees has its own goals that they will seek to accomplish first, rather than to advance the bloc as a whole,” Karolak said.
Barak Seener, CEO of the geopolitical risk assessment group Strategic Intelligentia, distinguished between BRICS countries with the agenda of creating an anti-Western alliance, such as Iran, China, and Russia, and those that lack such an agenda, like the UAE, Saudi Arabia, India, and Egypt.
“Saudi Arabia is just merely strategically hedging,” he told The Media Line. “It does not want to create an alternative to the dollar nor is attempting to undermine the post-World War II international order.”
He explained that the variety of geopolitical interests complicates the BRICS agenda. “It was initially purely economic, but now it has become complicated with different coalition members having different, if not oppositional, agendas,” he said.
Having Russia and Iran as part of BRICS with an expanding number of economies will pose a serious question about the effectiveness of economic sanctions as a tool of Western dominance
Baharoon said that the US could interpret the new additions to BRICS as a boon or as a threat. It could see the development as a bridge to the Global South, given that the US has strong relationships with newly joining countries such as Saudi Arabia, the UAE, Egypt, and Ethiopia. On the other hand, America might see the expanding bloc as a source of competition for global influence.
“Having Russia and Iran as part of BRICS with an expanding number of economies will pose a serious question about the effectiveness of economic sanctions as a tool of Western dominance,” he said.
Moonakal said that joining BRICS will enable Saudi Arabia and the UAE to decrease their reliance on the US and diversify their alliances while assuming more important positions of regional and global leadership.
He noted, though, that the importance of the new entries into BRICS should not be overstated.
“It is important to acknowledge that the technology transfer and military partnerships between Saudi Arabia, the UAE, and Egypt with the United States retain their significance, and the prospect of joining BRICS should not be construed as diminishing the importance of these existing relationships,” he said.
