14/01/2024
SAUDI ARABIA, UAE OFFICIALLY JOIN BRICS AS BLOC EXPANDS IN MENA.
Saudi Arabia and the United Arab Emirates (UAE) have officially joined BRICS. Alongside two of the biggest Arab economies, three more countries from the broader Middle East and North Africa (MENA) region have become members as of January 1, 2024. These include Egypt, Ethiopia and Iran.
This development doubled the size of the economic bloc, which used to only comprise Brazil, Russia, India, China and South Africa.
Argentina, which also received an invitation to join, recently formalized its announcement to decline the offer.
WHAT IS BRICS ?
BRICS is an acronym for Brazil, Russia, India, China, and South Africa. It represents a coalition of five major developing economies. It was founded in 2006 as BRIC before including South Africa in 2010.
BRICS countries work together to amplify the representation of emerging economies in global forums, traditionally led by Western powers. In 2014, BRICS also established the New Development Bank to finance development projects in emerging countries. By the end of 2022, the institution had lent nearly $32 billion.
Now a 10-country organization, BRICS boasts a collective population covering over 40 percent of the world. They also have a substantial 28 percent share of the global economy, equivalent to $26.5 trillion.
What does this mean for Saudi Arabia and UAE?
The inclusion of Saudi Arabia and the UAE in BRICS is particularly noteworthy. Ullas Rao emphasized the positive implications of this expansion.
“The expansion of the Brics multilateral bloc to include Saudi Arabia and UAE augurs extremely well amid ongoing geopolitical and economic challenges confronting the world economy,” said Rao. He is an assistant professor at Edinburgh Business School of Heriot-Watt University in Dubai.
He noted that with their substantial sovereign wealth funds, these countries are poised to create significant growth opportunities through investments, trade and commerce. The Finance Ministry of Saudi Arabia has projected that the country’s gross domestic product (GDP) will grow by 4.4 percent in 2024. Additionally, the Central Bank of the UAE expects the oil GDP to grow by 8.1 percent. Meanwhile, the non-oil GDP will increase 4.7 percent in the same year.
Meanwhile, for these countries, joining BRICS means having access to new economic horizons and diversification avenues. These align with their shared vision of reducing oil reliance.
This move also elevates their geopolitical influence, allowing them to balance traditional Western alliances with emerging global partnerships.
