South Africa hosted the 15th BRICS summit between 22-24 August, to which President Cyril Ramaphosa invited all African heads. Saudi Arabia, the UAE, Algeria, Bahrain, and Egypt are among the countries that have officially applied to join the organisation. Their accession was one of the subjects on the agenda of the summit, due to be discussed by the leaders of the five BRICS members — South Africa, Russia, China, Brazil, and India.
Enthusiasm to join BRICS followed a Chinese proposal, voiced during the 2017 summit in Xiamen, to create a “BRICS Plus” group. A framework towards this end was developed, including conditions that applicant nations need to meet, including being a major economy in their region, prospects for future economic growth, enjoying a stable political system, occupying a strategic position in trade and having a history of good relations with BRICS members.
Consultations were held with potential members of BRICS Plus which included Egypt, Saudi Arabia, the UAE, Argentina, Indonesia, Kazakhstan, Nigeria, Senegal, and Thailand, all of which attended the 2017 summit in China as observers.
The list has since grown. On 7 August 2023, South African Foreign Minister Naledi Pandor revealed that 23 countries had applied to join BRICS: Algeria, Argentina, Bangladesh, Bahrain, Belarus, Bolivia, Cuba, Egypt, Ethiopia, Honduras, Indonesia, Iran, Kazakhstan, Kuwait, Morocco, Nigeria, Palestine, Saudi Arabia, Senegal, Thailand, the UAE, Venezuela, and Vietnam.
In June 2023, Egypt submitted a formal application to join the group. Ahead of this, President Abdel Fattah Al-Sisi ratified Egypt’s membership in BRICS’s New Development Bank (NDB). The bank agreed that Egypt would contribute $1.196 billion, of which 20 per cent would be paid. Egypt’s current share is the highest permissible for a non-founder of the bank and represents 2.1 per cent of the voting power. Egypt became the bank’s fourth new member as part of the first expansion of the NDB’s global reach.
Egypt’s prospects of being accepted into BRICS are excellent. Egypt only applied after Chinese President Xi Jinping invited President Al-Sisi to attend the Strategic Dialogue on the Development of Emerging Markets and Developing Countries, held on the sidelines of the 2017 summit. The invitation reflected the strength of Egyptian-Chinese relations which is certain to influence the decision.
Egypt meets all the criteria for acceptance. It is politically stable, situated geo-strategically on the Red Sea and the Mediterranean and at the intersection of Africa, Asia, and Europe. According to Statista, an economic and marketing data gathering platform that has been monitoring economic development in Africa for 30 years, Egypt’s GDP in 2020 stood at $363.1 billion, making it the second largest economy in Africa. The total volume of Egypt’s trade relations with BRICS countries is around $25 billion, according to the Central Agency for Public Mobilisation and Statistics (CAPMAS).
Egypt’s economic relations with Russia, China, India, and Brazil have a long history. Monuments to bilateral economic cooperation with Russia include the mid-20th century mega project, the High Dam in Aswan, and the Dabaa nuclear plant currently under construction on the North Coast. Egypt is Brazil’s leading trade partner in the Arab region, with bilateral trade of around $2.6 billion. Egypt and Brazil are also members of the free trade agreement that Egypt signed with the Southern Common Market (Mercosur).
Egypt was among the first countries to recognise the Republic of China in 1956 and China is now one of the largest investors in Egypt, with 140 Chinese firms currently operating in the country. Testimony to Egyptian-Chinese cooperation is to be found in the Iconic Tower in the New Administrative Capital, the 10 Ramadan railway project, the New Alamein Towers project and the Satellite Assembly, Integration and Test Centre (AITC) which completed assembly and testing processes for EgyptSat 2 in June.
Bilateral trade with India reached $5.2 billion in the first 10 months of 2022 and Indian investments in Egypt have grown to more than $3.2 billion.
The NDB board’s unanimous approval of Egypt’s membership, a significant step towards joining BRICS, reflects the group’s confidence in the Egyptian economy.
A recent article on the Russian International Affairs Council (RIAC) website observed that Senegal’s and Egypt’s chances of acceptance are enhanced because both are centres of Islam on the African continent, use French and/or Arabic as an official language and are well-positioned strategically to be “effectively included in the logistical network as sea gates to the west and north of Africa, respectively”. The article also cited the size of the countries’ economies and what it termed the “demographic dividend”, ie their high population growth.
BRICS membership would open great opportunities for Egypt, not least in terms of increasing trade and investment and protecting its political and economic interests. It would be an important step in breaking free of dollar dominance which would boost the economy of Egypt which imports most of its food needs. Egypt has already opened the door to dollar-free trade transactions through bilateral agreements with Russia, China and India, a step that may help promote the inclusion of the Egyptian pound in international financial transactions with BRICS countries which are also seeking to end dollar dominance.
Membership in BRICS would better position Egypt to attract investment, draw on the Mercosur agreement and activate plans with Brazil to establish a free trade zone. It would boost tourism and facilitate access to grants and loans through the NDB, offering an escape route from the harsh IMF prescriptions. Egypt will be hoping to attract investment from BRICS members in many projects, particularly in digitisation, agricultural development, infrastructure and the green economy. Joining BRICS will also offer better food security, especially in terms of grains and seed oils.
Joining BRICS will allow Egypt to better draw on the expertise of its member nations in development, industrialisation and economic growth. As production increases, Egypt will have access to a vast common market in which to promote and sell Egyptian goods and products. Membership will also help Egypt strengthen its already good relations with member nations, especially Russia, China, and India.
*The writer is a researcher at Al-Ahram Centre for Political and Strategic Studies.
* A version of this article appears in print in the 24 August, 2023 edition of Al-Ahram Weekly