“We have been associated with BRICS since its inception, and now we seek official membership as part of our strategy to pursue diverse avenues for development and bilateral relations. It is crucial for our country’s overall growth that we do not rely solely on one or two options.” said Honorable Prime Minister Sheikh Hasina on June 21, 2023, intending to diversify our export basket, welcome more FDI, ensure business growth of Bangladesh and other opportunities that Bangladesh would claim by joining BRICS.
BRICS, an acronym for Brazil, Russia, India, China, and South Africa, originated from the term BRIC coined by Goldman Sachs economist Jim O’Neill in 2001. Initially, the concept encompassed these four emerging economies, with O’Neill predicting their future dominance in the global economy by 2050. BRIC was initially formed in 2006. The only member it formally admitted since then was South Africa in 2010, giving rise to the acronym BRICS. The BRICS nations account for a significant portion of the world’s land surface, global population, and gross world product. BRICS proved O’Neil was right as today, the combined GDP of the BRICS has surpassed that of the G7, a coalition of the most significant powers of the world—Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, additionally the European Union. Not only that, currently, 18 per cent of global trade is under BRICS, and it is also expected that by 2030, 50 per cent of world GDP will be in the name of this bloc.
Originally established to highlight investment opportunities, the BRICS countries were not initially a formal intergovernmental organisation. However, since 2009, they have evolved into a more cohesive geopolitical bloc. Formal summits and coordinated multilateral policies have become the norm as the BRICS governments strive for greater unity and influence. Guided by principles such as non-interference, equality, and mutual benefit, bilateral relations among the BRICS nations are conducted.
Originally proposed by China during its chairmanship last year, the planned expansion of the group aims to enhance representation from countries in Africa, Latin America, the Middle East, and Asia. According to South Africa’s BRICS ambassador, Anil Sooklal, numerous nations have expressed interest in joining the bloc. The list comprises 13 countries, with an additional six countries informally requesting to be part of BRICS. Among the confirmed newcomers are Saudi Arabia, Iran, Argentina, the UAE, Bangladesh, Algeria, Egypt, Bahrain, Indonesia, and Syria, two nations from East Africa and one from West Africa.
Representatives from Iran, Saudi Arabia, the United Arab Emirates, Cuba, the Democratic Republic of Congo, Comoros, Gabon, and Kazakhstan attended the “Friends of BRICS” talks in Cape Town during the June 2, 2023 summit. Meanwhile, Egypt, Argentina, Bangladesh, Guinea-Bissau, and Indonesia participated virtually.
Expanding the BRICS bloc would have far-reaching implications, particularly for the US dollar, which currently holds the world’s reserve currency status. As the dominant currency in international transactions and foreign reserves, the US dollar’s influence could be significantly challenged by including other emerging economies within BRICS. Potential expansion candidates, such as Indonesia, Turkey, Mexico, and others, would contribute to a more representative and inclusive platform for economic cooperation. If BRICS were to introduce its currency, it would provide an alternative to the US dollar, potentially diminishing its global dominance and fostering a more balanced and multipolar world order.
The US dollar’s declining value and increasing volatility have created challenges for countries and businesses regarding economic planning and international transactions. The Russia-Ukraine war has further emphasised the need for a new global currency, as sanctions imposed on Russia by the US and its allies have disrupted trade and highlighted the vulnerability of the US dollar-based system. The introduction of a BRICS currency would promote a more multipolar world economy, offering countries alternative currency reserves and reducing the ability of the US to exert political influence through its financial power.
As per officials from the foreign ministry of Bangladesh, an application has been initiated to join the BRICS alliance, and the formal process for seeking membership is underway. Foreign Minister AK Abdul Momen previously expressed that Bangladesh would welcome a formal invitation from BRICS to join the alliance of Brazil, Russia, India, China, and South Africa. It was hinted that Bangladesh would likely join the bloc in August of this year.
Bangladesh’s decision to join BRICS holds the potential to attract more significant foreign investments, as it will enhance Bangladesh’s standing by becoming part of a highly influential group of developing economies. Furthermore, it will assist in diversifying foreign relations and currency for our country.
In contrast to the IMF and the World Bank, which mainly utilise the US dollar for international transactions, the NDB (New Development Bank) distinguishes itself regarding local currency financing. The NDB provides loans in various currencies, including the US dollar, euro, Chinese yuan, and other local currencies. Recently, the newly appointed head of the bank, Dilma Rousseff, former President of Brazil, announced a gradual shift away from the US dollar. She committed to ensuring that a minimum of 30 per cent of loans will be offered in the local currencies of member countries. This move aims to diversify currencies, decrease dependence on the dollar, and assist developing nations in mitigating the adverse effects of exchange rate fluctuations, as seen in Bangladesh over the past year. Bangladesh could benefit from this initiative, considering that two BRICS members, China and India, account for almost 40 per cent of its imports. This facility could prove highly advantageous for Bangladesh, especially as it faces challenges with its dollar reserves.
In addition, Bangladesh seeks to establish strong ties with the GCC countries to address its increasing energy requirements, and BRICS can serve as a gateway for this endeavour. The Memorandum of Understanding signed between the GCC and Bangladesh last year opens up the possibility for Dhaka to receive crucial energy cooperation and investment in economic zones from the GCC. In return, Bangladesh can contribute to the food security of the GCC countries by exporting seafood and vegetables. Including the GCC countries as destinations for its locally grown food products will significantly enhance Bangladesh’s export portfolio.
Notably, Saudi Arabia and the UAE have already displayed interest in fostering closer bilateral relations with Bangladesh. Therefore, including these three nations in BRICS would represent a significant investment for Bangladesh, further strengthening its ties with Muslim allies in the current global landscape.
Finally, Bangladesh may find its global expression through BRICS after participating in several underwhelming multilateral platforms like SAARC and BIMSTEC. Over time, Bangladesh has steadily gained economic prosperity and geopolitical significance, and now BRICS holds the potential to serve as the ideal platform for Bangladesh’s aspirations.
In the meantime, the underlying competition and conflicts between China and India have been a significant challenge to the unity and effectiveness of the group. The China-India rivalry is multifaceted and stems from various factors, including territorial disputes, economic competition, and geopolitical ambitions. The border disputes between the two countries have sometimes escalated, leading to military standoffs and occasional clashes. These incidents have strained bilateral relations and created a sense of mistrust between China and India.
Economically, both China and India are emerging powers with rapidly growing economies. They compete for market access, foreign investment, and resources, which can create tensions and conflicts of interest within BRICS. Moreover, the asymmetry in economic power between China and the other BRICS nations, including India, has raised concerns about the influence and dominance of China within the group. The deep-rooted rivalry between China and India challenges the unity and collective decision-making within BRICS. Failure on crucial issues and differing national priorities can hinder the group’s ability to effectively address global challenges and advance shared objectives. It can also create divisions and blocs within BRICS, undermining its collective bargaining power and limiting its influence on the global stage.
While the rivalry between China and India challenges the unity of BRICS, it is not necessarily destined to fracture the group. The success of BRICS will depend on the ability of its member countries to manage their differences, find common ground, and prioritise collective interests over individual rivalries. Effective communication, dialogue, and cooperation within BRICS will be crucial to overcoming the potential clashes arising from the China-India rivalry.
Joining BRICS may result in increased hostility from the West towards Bangladesh. The Western bloc, dominated by traditional powers, might perceive Bangladesh’s alignment with BRICS as a shift away from Western influence and values. They may view it as a threat to their economic and geopolitical interests in the region. However, it is essential to note that this scenario is speculative and highly dependent on the specific dynamics and reactions of the Western countries involved. Bangladesh’s decision to join BRICS is likely a strategic move to strengthen economic ties and diversify its partnerships. As long as Bangladesh maintains its diplomatic relationships and trade with Western countries, it is more probable that the West will focus on constructive engagement rather than outright hostility.
In conclusion, Bangladesh’s strategy of maintaining a delicate equilibrium between alliances and avoiding hostility has been instrumental in resolving conflicts. Bangladesh has successfully pursued its interests and safeguarded its stability by carefully navigating international relationships. The decision to become a part of BRICS aligns with this strategy, as it allows Bangladesh to broaden its economic horizons and work towards achieving its economic goals. Joining BRICS provides Bangladesh with opportunities for increased trade, investment, and cooperation with emerging economies, which can stimulate economic growth and development. By embracing this partnership, Bangladesh takes a significant step towards realising its aspirations and strengthening its position on the global stage.
Author- MUHAMMAD MUJTABA
