How Egypt’s BRICS membership could help create a new world order
How Egypt’s BRICS membership could help create a new world order
It has been almost a year since Egypt officially joined BRICS, becoming one of the new members alongside Iran, the United Arab Emirates, and Ethiopia. This strategic move was driven by Egypt’s ambition to strengthen its economic and political influence on the international stage.
Joining BRICS has granted Egypt access to expanded trade and investment opportunities with member states. Moreover, its participation in the BRICS New Development Bank (NDB) provides vital funding for large-scale infrastructure projects, fostering economic modernization and the creation of new jobs.
Today, BRICS stands as a formidable economic bloc, showcasing significant potential and positive opportunities for its member countries. By the end of 2024, BRICS’ share of global GDP, measured by purchasing power parity, is projected to reach 36.7%, surpassing the 30% share held by the Group of Seven (G7). This data was highlighted by Russian President Vladimir Putin during his address at the expanded BRICS summit in Kazan in October. He noted that most member countries are expected to experience accelerated economic growth in the medium term, with an average growth rate of 3.8% for BRICS economies in 2024-2025, compared to the anticipated global GDP growth of 3.2-3.3%.
President Putin also noted that back in 1992, the G7 countries accounted for 45.5% of global GDP, while BRICS held a mere 16.7%. Over the past three decades, this dynamic has changed dramatically. He emphasized that BRICS nations have become primary drivers of global economic growth and will continue to contribute significantly to the world’s GDP in the foreseeable future.
Advantages and challenges of Egypt’s BRICS membership
For Egypt, a country with a population exceeding 100 million and an economy striving for diversification and growth, membership in BRICS holds strategic significance. One of the most notable benefits is the expansion of economic ties.
In 2022, the total trade volume between Egypt and BRICS nations exceeded $31 billion, with imports surpassing $28 billion, underscoring Egypt’s significant reliance on imports from these countries, particularly China, which accounted for around $15 billion of the trade volume. India and Russia also play substantial roles as trade partners, with trade volumes of approximately $5 billion and $4.5 billion, respectively. Thus, BRICS membership offers Egypt an opportunity to strengthen these partnerships and widen access to markets for its products.
Participation in BRICS provides Egypt with access to financial resources from the NDB, established to support infrastructure projects in developing countries. Given Egypt’s large-scale initiatives, such as the construction of a $58 billion new administrative capital, access to NDB funding is crucial. This can expedite the completion of key projects in transportation, energy, and telecommunications.
Foreign direct investment (FDI) plays a pivotal role in the growth of Egypt’s economy. In 2022, total FDI in the country reached approximately $8.9 billion, a substantial part of which came from BRICS nations, including China and India. Membership in BRICS could bolster investor confidence, leading to increased investments in industries, agriculture, and new technologies.
A major advantage of BRICS membership is the potential for technological transfer. Collaboration with leading technological and innovative powers such as China and India could accelerate the modernization of vital sectors in Egypt’s economy, enhancing its global competitiveness.
BRICS membership also strengthens Egypt’s international standing and allows it to actively participate in global processes. The bloc often advocates for reforming international financial institutions like the IMF and World Bank, and Egypt can join these efforts. This involvement bolsters its diplomatic leverage, providing opportunities to advance the interests of developing countries and support global initiatives aligned with its national priorities.
Furthermore, BRICS offers Egypt a platform to diversify its foreign policy. In an increasingly multipolar world, Egypt can balance its relationships with traditional Western partners by fostering ties with Eastern and Southern nations. This is strategically vital for mitigating risks associated with reliance on a limited group of partners.
However, despite the evident advantages, there are certain challenges. A significant issue is the persistent trade deficit, which in 2022 stood at approximately $25 billion, highlighting the substantial imbalance between imports and exports. While BRICS membership may open new export markets, Egypt will need to make considerable efforts to boost the competitiveness of its goods.
Another potential risk, as pointed out by experts, is the possible deterioration of relations with Western partners, such as the United States and the European Union, which view economic partnerships like BRICS with concern, as they challenge Western economic and political hegemony. The annual US military aid of around $1.3 billion is a crucial factor in Egypt’s security framework. Strengthening ties with BRICS, which includes US competitors Russia and China, could lead to increased pressure on Cairo from the West.