About BRICS
In 2000, a group of emerging countries in the global economy, namely Brazil, India, Russia, and China, formed BRIC with an aim to establish a bipolar world order. The term “BRIC” was coined by Jim O’Neill, a former chairman of Goldman Sachs Asset Management, in 2001 as an acronym for the four countries in Latin. Subsequently, this term was changed to “BRICS” when South Africa joined the bloc. Since then, “BRICS” has become the acronym for that bloc.
In 2014, BRICS members agreed to establish the New Development Bank (NDB) with a capital of $100 billion, and each country of BRICS contributed $20 billion to establish this international financial institution that provides its members with financial support and provides loans and grants to least developed countries.
The objectives of BRICS are to establish a global economic power capable of competing with the Group of Seven (G7), which dominates 60% of global wealth, support its members in paying off their debts, and the developing countries in financing infrastructure and climate projects, and reduce the dollar’s influence by establishing a better currency for international commerce.
Egypt's Accession to BRICS in 2023
In light of the current economic challenges Egypt is going through, the devaluation of the Egyptian pound against the dollar, and the country’s suffering due to the significant increase in prices, Egypt decided to join BRICS to become a new member starting from January 2024. This step came as a point of light that Egyptians received with great welcome and optimism because it reflects the solidity of the Egyptian economy and Egypt’s return to foreign and international markets.
During the annual meeting in Johannesburg, South Africa, BRICS approved of the application submitted by Egypt to join the bloc thanks to the close economic and political relations between Egypt and the bloc’s members and its economic and geopolitical position in the Middle East and North Africa region. It is worth noting Ethiopia, Saudi Arabia, Iran, the United Arab Emirates, and Argentina also joined the bloc. As a result, the bloc comprises 11 members and will be called BRICS Plus.
Benefits for Egypt as a Member of BRICS
By joining the bloc, Egypt will benefit from:
- Promoting economic and investment reforms in the last few years to attract foreign investments.
- Alleviating pressure on Egypt’s foreign reserves, of which the dollar represents the largest share, and reviving the local member states’ currencies and exchanging them with the Egyptian pound in trade which will improve economic conditions in Egypt.
- Expanding trade and signing new trade agreements and huge investment deals with the largest economies in the world.
- Reducing the import and export crises and opening new markets for Egyptian products.
- Creating opportunities to obtain concessional finance for projects from the New Development Bank (NDB).
Statements on Egypt's Accession to BRICS
President Abdel Fattah El-Sisi stated that Egypt looks forward to upholding the voices of southern nations in addressing diverse developmental issues and challenges facing Egypt in a way that supports the rights and interests of developing countries. He also expressed appreciation for the BRICS announcement of extending an invitation to Egypt to join the bloc, and he valued the trust bestowed by all member states of the bloc, looking forward to fruitful collaboration with them in the coming period.
Dr. Abdul Nabi Abdul Muttalib, Undersecretary of the Egyptian Ministry of Trade and Industry, explained that Egypt’s accession to BRICS will affect the political and economic sectors. On the political level, negotiations with Ethiopia regarding the Renaissance Dam may involve a step forward, especially with Ethiopia joining BRICS at the same time. On the economic level, it will help secure Egypt’s needs for wheat, corn, oils and other food crops and establish a global logistics free zone to deliver Russian grain to Africa via Egypt, making Egypt the largest exporter of wheat in Africa.
It is clear that Egypt will benefit much from joining BRICS on the political, economic, commercial, and investment levels. If you want to know more about this topic, click here.
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