Altering diplomatic ties, selecting allies, and identifying opponents are fundamental principles in the international diplomatic sphere and global financial system. In a move aimed at expanding the influence of the bloc that has pledged to champion the “Global South,” leaders of the BRICS group of developing nations have invited Saudi Arabia, Iran, Ethiopia, Egypt, Argentina, and the United Arab Emirates to join.
This expansion has the potential to pave the way for numerous interested countries seeking admission to BRICS, which currently consists of Brazil, Russia, India, China, and South Africa. The geopolitical polarization of the world has spurred efforts by Beijing and Moscow to forge BRICS into a viable counterweight to the West. Ethiopia’s potential membership in BRICS would provide the country with leverage and opportunities to explore emerging markets, bringing dynamism to its growing economy, according to a veteran diplomat.
Ethiopia’s Former Ambassador to China, Teshome Toga, highlighted the significance of Ethiopia’s accession to the bloc in terms of widening global partnerships. He stated, “Economic partnership, which is the main factor behind the establishment of BRICS, is also of great significance to Ethiopia in elevating its international commerce portfolio.”
With BRICS accounting for approximately 31 percent of the world’s total GDP and representing 42 percent of the global population, it is predictable that many countries would express a desire to join the bloc. Ethiopia, in the process of post-conflict recovery, has formally requested to become a new BRICS member to accelerate its ties with the bloc and succeeded.
Ethiopia’s accession into the BRICS economic bloc would realize South- South cooperation and expedite efforts to attain an inclusive and prosperous global order, Prime Minister Abiy Ahmed (PhD) said.
The Premier extended a congratulatory remark to the people of Ethiopia in the advent of the country’s entry into the bloc of five emerging economies. Discussions that were held with leaders of the BRICS member states have created the understanding that Ethiopia’s entry is instrumental to foster South-South cooperation and ensure Africa’s representation, Abiy emphasized.
“The BRICS family comes to understand that without the inclusion of Ethiopia, the realization of South-South cooperation is unattainable. They also have given weight to Ethiopia’s noble place in Africa’s history and its growing economy and young population.”
Ahead of the BRICS-Africa Outreach and BRICS Plus meeting in Johannesburg, South Africa, Prime Minister Abiy Ahmed of Ethiopia met with Chinese President Xi Jinping in a bilateral meeting. The two leaders expressed mutual interest in further strengthening relations between their countries and reaffirmed their commitment to partnership in multilateral platforms. President Xi Jinping praised Prime Minister Abiy Ahmed’s leadership in spearheading national development and pledged support for peace and development efforts, including reconstruction, investments, and trade ties. President Xi Jinping also announced China’s suspension of debt payments maturing in the period 2023/2024 as part of the common framework agreement.
Ethiopia’s admission to the BRICS economic bloc is a huge achievement in boosting the confidence of anchor investors that the county is the right place to do business, a noted economist said.
Speaking to an international media, an economist Zemedeneh Negatu noted that the entry would also enable Ethiopia to secure more finance to expedite its development plans. BRICS members are taking into account Ethiopia’s large population is the driving force to keep its economic growth in years to come.
Goldman Sachs forecast that Ethiopia’s GDP would strike 6.2 trillion USD, 17th biggest in the world, by 2075.
Zemedeneh, who is also Global Chairman of the U.S.-based Fairfax Africa Fund, further indicated that the group would be a significant contributor to the economic transformation to the Global South and numerous developing countries.
BRICS constitutes 40 percent of the world population and many countries are looking to join the bloc and allow the emerging economies in a Global South for fair share access to finance. Existing since 1945, the Global South has become the strong competitor of the world order.
“Cognizant of the strong desire that many countries have shown to join the bloc, it is expected that BRICS would become a formidable actor in the global economy and politics. More importantly, they can deliver all the promises they are making like the BRICS bank which will be a strong competitor of the World Bank.”
He added: “A lot of emerging economies in the Global South do not believe that they have a fair share of accessing finance. So, investors like us would like to see BRICS get stronger. They are looking at a world scale.”
The convening of world leaders at the BRICS summit in Johannesburg, South Africa, this week marked a significant milestone in the relentless rise of emerging economies. Originally coined by Goldman Sachs analyst Jim O’Neill in 2001, BRICS, consisting of Brazil, Russia, India, China, and more recently, South Africa, now boasts a combined GDP surpassing that of the G7 nations. BRICS is asserting itself as a force to be reckoned with on the global stage.
At its core, BRICS is driven by a bold vision – to establish its own world economic and trade systems that challenge the existing Western-dominated order. The group seeks to reshape the political and economic landscape in a way that benefits its member nations, promoting a more equitable and multipolar world. This ambitious agenda reflects the growing frustration among emerging economies with outdated structures of global governance that no longer reflect the economic realities of the 21st century.
One of the key objectives discussed at this year’s summit is to reduce global reliance on the U.S. dollar. The dominance of the U.S. currency has far-reaching consequences, often at the expense of other nations. The strength of the U.S. economy directly impacts the value of the dollar, causing fluctuations that ripple through international markets. This volatility undermines the stability of other currencies and hampers the economic prospects of emerging nations. Recognizing this vulnerability, BRICS aims to promote the use of national currencies in international trade as a means to rectify the situation.
Russia and China, in particular, have been vocal proponents of de-dollarization, aiming to weaken America’s stranglehold on the global financial system. These nations have legitimate concerns about the potential abuse of economic power by the United States, especially through unilateral sanctions that can wreak havoc on the economies of targeted countries. By diversifying away from the U.S. dollar, BRICS hopes to insulate its member nations from such vulnerabilities and foster a more balanced and resilient global financial architecture.
While creating a new currency is not an immediate agenda item at the summit, the discussions surrounding this possibility underscored the group’s aspirations for greater economic independence. The idea of a common currency among BRICS nations holds immense potential. It could pave the way for stronger economic ties and forge new geopolitical alliances, solidifying BRICS as a rising power in the global de-dollarization coalition. However, establishing a common currency is a complex task that requires careful deliberation and consensus-building among member nations.
The growing interest from other countries to join BRICS speaks volumes about the group’s increasing influence in the international arena. Over 40 nations, including Ethiopia, Iran, Argentina, Saudi Arabia, and the United Arab Emirates, have expressed their desire to be part of this transformative bloc. And mentioned the five plus Egypt won acceptance by the bloc. These countries see BRICS as a gateway to enhanced economic benefits and an alternative to the Western-centric economic order.
However, some believe that the expansion of BRICS should be approached with caution. It is essential to maintain the group’s core values and objectives while considering new members. The inclusion of additional countries should be based on their alignment with the principles of BRICS and their potential to contribute meaningfully to the bloc’s goals.
As BRICS continues to shape a new world order in global finance, it faces various challenges. Coordinating the diverse interests and priorities of its member nations is a complex task. Each country brings its own unique set of economic, political, and social dynamics to the table. Balancing these interests, while pursuing collective goals, requires strong leadership, effective communication, and a commitment to consensus-building.
Additionally, BRICS must navigate the evolving global geopolitical landscape. The rise of protectionism, trade disputes, and geopolitical tensions pose challenges to the bloc’s vision of a more multipolar world. It is crucial for BRICS to actively engage with other global players, including developed nations and international institutions, to foster cooperation and address common challenges.
In conclusion, BRICS is emerging as a significant player in the global financial system, challenging the existing Western-dominated order. Its expansion and potential inclusion of new member nations demonstrate the bloc’s growing influence. As BRICS continues to shape a new world order in global finance, it must navigate various challenges to maintain its unity and achieve its objectives. By promoting economic independence, advocating for the use of national currencies, and fostering cooperation among member nations, BRICS aims to create a more equitable and multipolar world.
BY LAKACHEW ATINAFUembers
THE ETHIOPIAN HERALD 27 AUGUST 2023
