On June 14, Prime Minister Sheikh Hasina met with South African President Cyril Ramaphosa in Geneva, bringing attention to the matter of Bangladesh joining the BRICS. PM Hasina will attend this year’s BRICS summit, which will be held in South Africa. Foreign Minister AK Abdul Momen hinted that Bangladesh is likely to join the grouping of five member states — Brazil, Russia, India, China, and South Africa — in August this year.
No doubt, joining BRICS in the wake of an economic downturn is a welcome move, considering BRICS’ status as the largest club of emerging economies and its increasing economic and political influence.
It is also important as Bangladesh will need significant investment, export diversification, and funding for development activities. Bangladesh’s decision to join the bloc is seen as a move to diversify its foreign relations and currency. It must be remembered that three BRICS countries will hold the presidency for the next three terms of the G-20 (a forum of 19 countries and the European Union). First India, then Brazil, then South Africa. Relations with these emerging economies can bring greater market access, investment opportunities, and technological advancements, which have the potential to stimulate economic development.
BRICS has become a strong new voice alternative to the West — the BRICS countries feel that the global economy is suffering due to unilateral approaches in violation of international law. They emphasized that the use of unilateral economic coercive measures like sanctions, boycotts, embargoes, and blockades have further compounded the situation. BRICS is therefore actively expanding and working towards establishing a new economic framework to challenge the dominance of the US and its currency, the dollar. It also emphasized promoting the use of local currencies in international trade and transactions among its members and trading partners.
BRICS has already surpassed the G7 economies in terms of their share of the global GDP. The World Trade Organization (WTO) estimates that BRICS contributed 31.5%, or $26.03 trillion, to the world GDP in 2021. Its contribution to world trade was $9.3tn during the same period, which is 18% of total global trade. The bloc is expected to contribute more than 50% of the world’s GDP by 2030, and the bloc’s intended expansion is likely to hasten this trend.
The Ukraine-Russia war has made BRICS more relevant, especially for nations in the Global South. In an article that was published in the Japan Times, Ryan Berg, head of the Americas Program at the Centre for Strategic and International Studies (CSIS), stated that these countries strive to reject the Western “autocracy vs democracy” narrative. Anil Sooklal, the ambassador of South Africa to the BRICS, revealed that more than 30 nations had officially and informally asked to join the alliance, signaling that the grouping is expected to expand this year. The long list of newcomers includes Saudi Arabia, Iran, Argentina, the UAE, Bangladesh, Qatar, Egypt, Bahrain, Indonesia, etc. This is sure to increase BRICS’s financial capacity to assist its member countries.
At a time when it was struggling to find US dollars to import coal and other fuels to meet its energy demands, Bangladesh announced its plans to join BRICS. Bangladesh’s deeper engagement with future BRICS members such as Saudi Arabia, Indonesia, and the UAE can be of great benefit in tackling the energy crisis. The new membership will bring new opportunities for Bangladesh, as the forum represents a potential source of financing and influence outside of forums dominated by the West.
Bangladesh has already become a member of the New Development Bank (NDB), set up by BRICS in 2021. Recently, the bank’s new CEO, former Brazilian President Dilma Rousseff, declared that it is progressively moving away from the US dollar. In order to diversify the bloc’s currencies, lessen its reliance on the dollar, and assist developing countries avoid the negative effects of exchange rate fluctuations, such as those Bangladesh experienced over the past year, she promised that at least 30% of loans would be provided in the local currencies of member nations. This capability might be especially helpful for Bangladesh, which is struggling with its dollar reserves and where two BRICS countries alone — China and India — account for over 40% of imports.
Being a member of this hugely influential group of emerging economies would promote Bangladesh’s status and voice on the global stage, which could lead to greater foreign investment in the country. The country can bring capital, expertise, and technology to support various sectors of the economy. BRICS can facilitate knowledge sharing, policy coordination, and joint ventures in the areas of modern food and agriculture, energy and power, and industrial and technological development. There is no denying that BRICS will also be a diverse export market for Bangladesh’s RMG.
The importance of cooperation between developing countries is increasing day by day. There is nothing wrong with the engagement in the multilateral forums, as the global situation and geopolitics are changing fast. The more a country can make its’ foreign relations multilateral, the better.
The decision by Bangladesh to join the BRICS can enhance commerce and investment in the post-LDC world, but Dhaka must be cautious of any geopolitical pitfalls. If Bangladesh joins BRICS, there will be no disruption in the balance of relations with the US. It is important to note that BRICS is not really a single leadership platform. India, America’s strong Indo-Pacific ally, is also part of this dynamic group. So, if Bangladesh becomes a member of BRICS, it could lead to increased economic ties and collaboration, benefiting both countries.
Joining BRICS is consistent with the balanced foreign policy that Bangladesh wants to adopt. If Bangladesh’s membership is approved, it will provide Bangladesh more bargaining power with important development organizations including the World Bank, the Asian Development Bank, the International Monetary Fund, and the New Development Bank of the BRICS. Michael Kugelman, the director of the South Asia Institute at the Wilson Centre also thinks that the Hasina government’s move could benefit the country if done correctly. “If Dhaka plays its cards right, it could gain a lot from participating in BRICS while also continuing to scale up trade and diplomatic ties with the West,” Kugelman pointed out.
Bangladesh is planning to join the bloc at a time when relations with the US have somewhat strained following visa policy and sanctions on RAB. So, there might be a perception that Bangladesh is moving closer to China. So, Dhaka needs to make its message clear that it is not joining the grouping as a tactic to defy the West but rather as a proactive step to diversify its foreign relations and currency.
Prithwi Raj Chaturvedi is a Researcher and Political analyst from New Delhi, India.
Dhaka Tribune