What's driving Gulf interest to join BRICS?

Al-Monitor Pro Members

Dr. Karen E. Young

Senior Research Scholar, Center on Global Energy Policy, Columbia University

Sept. 1, 2023

South Africa hosted the annual summit of the BRICS countries in Johannesburg on Aug. 22–24. BRICS — made up of Brazil, Russia, India, mainland China and South Africa — is more of a forum than an institution, though its key outcome in the last meeting was an expansion of membership. Inclusion in the bloc does not require a policy or financial commitment, but rather signals a cohort of political economies open to different models of economic development and finance. The BRICS summit is like a Davos for developing countries and their leadership, more performative than substantive in international agreements. The expansion of the cohort included the admission of Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates as members from January 2024. The formal institution affiliated with BRICS is the New Development Bank (NDB - previously known as the BRICS bank), yet the BRICS summit did not include any formal convening of the NDB or address applicants to its membership. However, one of the political aspirations of the group is to increase trade in currencies outside of the US dollar, and South African President Cyril Ramaphosa requested that member states' finance ministers and central banks might work on reducing dollar use in trade, and to report on that progress at the next summit in 2024. 

Scenario 1: BRICS becomes a podium for grandstanding and organization of anti-American and anti-Western development institutions, but garners little cohesion or ability to deploy capital or policy framework agreements among its members. 

As a source of ideas and identity cohesion in international politics, BRICS is a risk to the status quo and could beckon a new transition to broader leadership in the United Nations Security Council. On the ability to provide lending and a lifeline to members in balance of payments crises, BRICS is not a sustainable platform.

Scenario 2: Beyond a membership in BRICS, with potential new capital injections into the NDB, the Gulf states — namely Saudi Arabia and the United Arab Emirates — begin to rival Chinese leadership as an arbiter of development finance options, both in their ability to deploy capital through the bank and separately as investors and infrastructure developers. 

A Gulf model of economic development and mechanisms of Gulf finance, through sovereign wealth funds and multilateral finance mechanisms (through the AIIB, NDB and even traditional institutions like the World Bank) begins to emerge. This model privileges Gulf state-owned operators in the power sector, especially in the provision of finance for the construction of clean energy.  

Scenario 3: The BRICS cohesion starts to fray with disagreements between major members China and India, and a demonstration of failure or state collapse in Russia. Domestic economic pressures draw China away from its development finance commitments and outward deployment of infrastructure projects. The BRICS connection to the NDB flounders and the bank's solvency is under threat. 

In this scenario, the Gulf states may suffer some reputational risk in association, but have hedged with membership and accelerated stake holding (e.g., increases in SDRs, or special drawing rights, in the IMF) in Western-linked development finance institutions like the World Bank and IMF.

Karen E. Young is a senior research scholar at the Center on Global Energy Policy at Columbia University. She was previously  founding director of the Program on Economics and Energy at the Middle East Institute. She was a resident scholar at the American Enterprise Institute, and taught courses on the international relations and economy of the Middle East at George Washington University and at the Johns Hopkins School of Advanced International Studies. Before joining AEI, she served as senior resident scholar at the Arab Gulf States Institute, a research and visiting fellow at the Middle East Centre of the London School of Economics and Political Science, and an assistant professor of political science at the American University of Sharjah in the UAE.