Two pertinent questions crop up regarding Bangladesh's potential BRICS (now BRICS+) membership that need to be weighed in the context of current global geopolitical shifts. First comes what could be the short-to long-term economic and trade benefits of Bangladesh joining BRICS. And secondly, whether or not BRICS membership allows Bangladesh to enjoy any leverage in the international financial structure in the cusp of reordering for aspired relief from the reign of a single global trading currency.
However, Bangladesh has missed the bus, for now, to join the caravan. It had applied for BRICS membership but was not among the countries the recently concluded BRICS summit in Johannesburg coopted. The new entrants are Argentina, Ethiopia, Iran, Saudi Arabia, Egypt, and the United Arab Emirates. According to government officials, it was not in Bangladesh's plan to obtain membership in this summit. However, Bangladesh has been a member of the New Development Bank-an international financial organisation established by the emerging bloc beached by China.
Since the inception of BRICS, it has posited itself as a voice of the global south, and with the recent expansion in membership, it can further cement that claim. As reiterated from time to time by its leaders, BRICS is a crucial catalyst to usher in a new era of multipolarity, as opposed to the status quo which they view as unipolar. The democratic structure of BRICS, with broad stated goals of development cooperation, truly places it in a unique position to pursue the agenda of multipolarity. However, there are some obvious drawbacks, as one may point out, like the differences in geopolitical interests and domestic political structures among the members. The border disputes between China and India, and the difference between China's political system and the rest are the two most prominent examples in this discussion. With the admission of new members, the group's heterogeneity assumes a new dimension which can potentially escalate the challenge to reaching broad consensus.
It is, however, noteworthy that these differences have been in place for quite some time and the countries have managed to develop a working relationship to further their collective agenda of multipolarity. A common thread that has connected the BRICS countries is the burgeoning volume of trade-which is highly significant in the current geopolitical context as there is an increasing tendency among major developed countries to adopt protectionism and contrive strategies to ostracise their international rivals. The trade factor, along with the shared commitment towards multipolarity, should be the primary key for Bangladesh to navigate the questions raised at the beginning of this piece.
Prima facie, in the short term there is little trade or economic benefit for Bangladesh from a BRICS membership. BRICS has yet to evolve into a trade or economic bloc. Neither has the group adopted any binding multilateral agreements on trade. Many experts consider BRICS to be a loose grouping of emerging markets without a unified economic objective. The short-term benefits may thus appear elusive to some. Even so, more than 40 countries have expressed their interest in joining the group. The primary consideration is, of course, long-term gains that can be made through strengthening economic ties, expanding trade relationships, and influencing the global trade structure. BRICS offers a platform for countries of the global south to calibrate their strategies towards a more equitable and favourable trade environment.
The combined gross domestic product (GDP) of the expanded BRICS in terms of purchasing power parity (PPP) is roughly USD 65 trillion-37 per cent of the global GDP, whereas for the G7 it is 29.9 per cent. BRICS+ will account for 45 per cent of the global population, almost half of the world's food production, nearly half of the world's oil production and reserves, 38.3 per cent of the globe's industrial production and 23.4 per cent of total exports. The potential for cooperation in areas of agriculture, industry, energy and trade is thus enormous.
The BRICS agenda highly emphasises "open, transparent, fair, predictable, inclusive, equitable, non-discriminatory and rules-based multilateral trading system with the World Trade Organisation (WTO) at its core, with special and differential treatment (S&DT) for developing countries, including Least Developed Countries", as stated in the Johannesburg declaration. Intra-BRICS platforms like the BRICS Framework for Cooperation on Trade in Services, the BRICS Business Council, and the BRICS Women's Business Alliance (WBA) can act as crucial enabling factors for Bangladesh to diversify its markets and attain preferential access.
The establishment of the New Development Bank (NDB) in 2015 has added further significance to the group, with countries now having an alternate pole of credit other than the World Bank and the IMF. So far, NDB has financed nearly 100 projects worth US$34 billion. The role of NDB gradually gaining prominence, combined with BRICS' call for reform of the Bretton Woods institutions-accommodating the greater role of emerging markets and developing countries in decision-making-allows for countries like Bangladesh to enjoy greater space and leverage in credit negotiations.
Furthermore, BRICS is collaborating to develop the BRICS Pay, a common payment system that can emerge as an alternative to the international payment-system SWIFT. BRICS Pay will be connected to the national payment systems of the member-countries, allowing transactions in the national currencies. Such systems can essentially accelerate "de-dollarisation"-a development that would have great significance worldwide. Indeed, if not effectively "de-dollarisation", there is a growing tendency among economies around the world to resort to local currencies for trade. Since 1999, the share of reserves held in U.S. dollar by central banks has dropped by 12 percentage points, from 71 per cent in 1999 to 59 per cent in 2021. Reportedly, Saudi Arabia is considering selling oil in Yuan. And a China-Saudi currency-swap deal has just been done. Bangladesh, too, has decided to make a payment worth USD 318 million for the Russian nuclear plant loan in Ruppur in the Chinese currency, and has entered into an arrangement of Taka-Rupee exchange for trade, albeit for a limited amount, with India. Against this backdrop, there is a growing discussion of issuing a BRICS currency, as announced by several of its leaders.
Considering the growing clout of BRICS and the general worldwide support for a programme of switch away from the US dollar, Bangladesh must explore the opportunities that the lineup has to offer. However, it is imperative to strengthen its economic base, diversify its industry, and properly address the irregularities prevailing in the financial sector. Without doing so, the BRICS membership may not be as beneficial.
Omar Raad Chowdhury is a young researcher. Email: [email protected]
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