I make no apology for reviving a headline that I first used two decades ago when I was on a panel on emerging markets with Goldman Sachs’ Jim O’Neill. My argument then was that, although his coining of BRICs (as it then was) was a marketing masterstroke, he was, to adapt a biblical analogy, trying to make BRICs without straw when it came to substance.
Despite the addition of South Africa in 2010 and the establishment of the New Development Bank in 2014 and the Contingent Reserve Arrangement in 2015, BRICS lay becalmed for years. It has only really been energized by Russia’s invasion of Ukraine. The way in which the war has bolstered relations between the US and its allies in Europe and Asia has spurred Beijing to see BRICS as the best available vehicle to pull some middle powers more firmly into its orbit. As Steve Tsang of the School of Oriental and African Studies, London, has noted:
What the Chinese are offering is an alternative world order for which autocrats can feel safe and secure in their own countries. They can find an alternative direction of development without having to accept the conditionalities imposed by the democratic Americans and European powers.
In its summit this August, BRICS invited six states to join the grouping on January 1, 2024. Among these are three Arab states: Egypt, the United Arab Emirates (UAE) and Saudi Arabia.
What’s motivating the Arab states?
By any reasonable definition, all three countries qualify as autocracies. However, beyond this and the shared objective of closer economic ties with China as a counterweight to the US, they exhibit important differences in their motives.
For Egypt, it is a case of “cleft stick.” On the one hand, it has long been a top recipient of US aid. On the other, its reliance on the dollar has exacerbated the dire economic consequences of Russia’s invasion of Ukraine, thanks to its dependency on imported energy and food. Foreign investors have withdrawn billions of dollars as the currency has crashed, the Gulf countries that provided support in the early days of the Sisi coup have lately imposed tougher conditions and a $3 billion loan from the IMF comes with stringent reform requirements. BRICS membership would facilitate trading with other members in local currencies and should help to attract more investment from them.
In contrast, although the UAE has benefitted enormously from Russian investment and has burgeoning trade relations with Russia, China and India (with which it has just finalized a deal to trade in local currencies), the main driver behind its BRICS application is political. It remains close with the US as far as security guarantees are concerned; but its confidence in US bankability has declined to the point where, as Vivian Nereim wrote in The New York Times last month, “Emirati leaders … fear a decline in American interest in the region — and the military defense that comes with it — and argue that Washington has not done enough to deter threats from Iran.” This dates back at least a decade, so joining BRICS would arguably be no more than the latest example of how, as Nereim notes, “a Middle Eastern leader viewed by the US government as an important partner,” Sheikh Mohammed bin Zayed, “is increasingly striking out on his own path.”
Saudi Arabia is, perhaps, the most interesting of the three. As has been well documented, relations between Washington and Riyadh have been rocky during the Biden presidency. Although they would improve significantly were Donald Trump to win the 2024 election, even this would be unlikely to reassure the Saudis over US security guarantees, particularly given Trump’s failure to act on the 2019 attack on Aramco facilities in Saudi Arabia’s Eastern Province. Hence, Riyadh’s openness to Beijing-brokered rapprochement with Tehran earlier this year which has helped open the BRICS door for both the kingdom and Iran.
Nevertheless, in the margins of the BRICS summit the Saudi foreign minister, Prince Faisal bin Farhan, claimed that his country was not committed to joining BRICS before it had had time to consider the terms. As there are no laid-down criteria for membership beyond unanimous agreement among existing members, this is, in itself, sensible. However, it may also mean that Riyadh is using the prospect of BRICS membership as leverage to try to extract more concessions from Washington in their talks over a grand bargain sweeping in the kingdom’s civil nuclear aspirations, arms sales and relations with Israel.
Middle East expert Bruce Riedel (quoted in The Guardian on July 27) is correct that Riyadh is unlikely to want to give Biden an election boost if he could get both the Netanyahu government and the US Senate on board too. However, from a Saudi perspective, there is no downside to testing the waters. Especially since, as Gideon Rachman opined in Financial Times on September 4 (and Jon Hoffman made the same point even more forcefully in Arab Digest’s September 6 podcast), even if a grand bargain were to be struck, it would likely “turn out to be a grand illusion” for Washington.
China is not as available as it seems
All this being said, the biggest illusion of all may be the belief among BRICS candidates that membership would be a major boon to economic ties with China. As I wrote in the Arab Digest’s April 20 newsletter, Beijing is struggling with its own economic headwinds. Furthermore, its dominant role at the BRICS summit notwithstanding, China has been turning increasingly inwards since Xi Jinping first started his drive for self-sufficiency in the overarching quest to sustain in perpetuity the CCP’s grip on power. Beijing’s principal aim in its promotion of BRICS is therefore to work with other autocracies in promoting its governance model internationally, the better to defend it domestically.
BRICS expansion … would not be a sign of the group’s growing diplomatic clout — quite the opposite, in fact, since finding a common denominator would become more difficult. Expansion would, rather, be a reflection of China’s growing influence when defining the future of the bloc.
From the perspective of the three Arab aspirants, it is therefore worth reflecting carefully if membership could all too easily turn out to be a Faustian pact.
[Arab Digest first published this piece.]
[Anton Schauble edited this piece.]
The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.
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