WHAT DOES BRICS BRING TO THE NEW COMERS IN GENERAL AND TO ETHIOPIA IN PARTICULAR?

January 1, 2024 witnessed the expansion of BRICS by embracing five more countries. Although the purposes may vary, nations throughout history have formed alliances, established associations and entered unions. Ties with economics at the center is just a variety of these arrangements. Removing barriers to the flow of goods and services across national borders, establishing forums for business to business interactions, designing programs for scientific and cultural exchanges, deepening economicdiplomatic ties and the like have been part and parcel of international relations history-especially that of the late 20th century. The advancements in communication and transportation technologies have amplified these practices. Though new and ever evolving, BRICS (which originally stands for Brazil , Russia , India , China and South Africa ) is such an association of nations which some see as a counter balance to the western dominated postSoviet World(multi-polarization). Others consider it as a legitimate platform via which emerging nations can channel their stances on global matters, cooperate on economic and security issues and work on reforming and democratizing international institutions such as the UN Security Council, IMF and the World Bank -especially by accommodating the global south. This has become even clearer with admission of five new countries (Argentina has changed its mind following the coming to power of Javier Milei, a right-winger) this January. The name of the association has changed in to BRICS Plus. Ethiopia, Egypt, Iran, Saudi Arabia and UAE are the new entrants. Before embarking on the assessment of the implication of this decision to the Ethiopian Economy it will be helpful to address a couple of questions. This expansion is more likely to benefit both the founders and the new comes though this all depends on how far each member changes its circumstances in way it benefits from this arrangement. What does this bloc stand for? And what are its characteristics? One distinct character of BRICS is that its members are countries whose economies have been growing so fast in the past few decades compared to other economies. Second, member countries have strong stance on the need to reform global governance and security arrangements including the UN security council, IMF, World Bank in such a way that they are reorganized with more inclusivity, fairness and democratization. Third, BRICS members oppose unilateral actions on global affairs and interference in the sovereign domains of individual countries. Fourth, member countries are thought of to have intention to reduce the dominance of the US dollar in their international trade by strengthening or introducing alternative currencies or conducting bilateral trades with each other’s currencies. Fifth, BRICS is “non-western” as it stands now. However, this might be misleading as the old and new member countries enjoy strong economic ties with Europe and North America (Russia being the only member under economic sanction by the West). Furthermore, there are still security co-operations between some BRICS member countries and the West (Saudi and Egypt with the US for example). Thus, one has to be cautious when labeling BRICS as an anti-west block be it economic or otherwise as such claims hold no water given the current realities.

How influential is BRICS globally? Member countries together account for about a third of the world’s GDP, constitute about 45% of the global population. In terms of resource base, they are endowed with or famous for the production of fuel and gas, huge manufacturing base- including vehicles, machinery, electronics, enormous agricultural products such as wheat , coffee , sugar , rice and son. Besides, there are huge potentials in the domains of science and technology.

All these opportunities await Ethiopia and other new comers as the bloc gets stronger and the movements of goods, services and investment across member countries is facilitated by agreements. However, mere membership to the BRICS alone is not a guarantee for development. The Ethiopian government, business communities, researchers and other relevant bodies have to rise to the occasion in order to be able to exploit this opportunity. On the other hand, given that countries such as China are big and far ahead in many economic and technological aspects, it is worth noting that there will be stiff competition if the bloc is to evolve as a free trade area, among other aspects. This is a wakeup call for domestic businesses to tighten their belts (this should be innovative, cost effective and quality oriented). What are some of the opportunities which BRICS brings with its recent expansion to Ethiopia and other four countries? First, is a symbolic success in the national psych as belonging to a group of countries with specific economic and ideological characteristics forms a kind of identity and provides a psychological boost (remember that economic success in the last few decades is the brand of most member countries). Second, the BRICS member countries have been witnessing rapid economic growth, their foreign trades are expanding, and their domestic markets are getting ever bigger. The public and private businesses in each country can exploit their respective comparative advantage as this association becomes more formal and deepens economic ties between member countries. Third, BRICS member countries offer viable investment opportunities in various sectors. For example, Chinese and Indian companies have been investing in Ethiopia; some Russian Companies are also expressing their interests. Governments and businesses from the new entrants and old guards of BRICS will continue to invest in each other’s economies. Fourth, BRICS member countries are at the forefront of technological innovation (China in AI, electric vehicles and heavy machinery, Russia in military and cyberspace, India in software, South Africa in Medicine and so on) .This is a golden opportunity for new members such as Ethiopia to gain access to new technology and attract investment in these sectors. These are some of the blessings the Ethiopian economy may reap in relation to the admission of our country to BRICS about three weeks ago.

However, it should be crystal clear from the outset that a mere membership doesn’t guarantee any positive pay-off unless deliberate effort is mode by all stakeholders in the Ethiopian economy. We can consider joining BRICS to that of membership to a gym. The fact that an individual pays monthly contributions to a gym and secures some badge doesn’t change his/her physical conditions unless he/she spends time using the equipment and know how in the gym- having a fitness couch will be a bonus. As the gym member’s physical condition and posture is conditional on the amount of effort he or she puts in using available tools in gym, so does Ethiopia’s benefits from its entry to BRICS. It is high time that researchers, the media, private businesses, relevant government bodies come together to develop some kind of forum to identify opportunities and challenges associated with our entry to BRICS- and its future developments.

In general, BRICS alliance is more likely to offer growing opportunities to the Ethiopian Economy. This might be manifested via trade, investment, loan, sharing new technologies and cultural and education exchanges. However, challenges such as regulatory differences, infrastructure limitations and unfair competitions have to be thought of clearly and if possible minimized to a degree the benefits of Ethiopia’s entry to BRICS surpass the associated costs.