Egypt and BRICS: Paving the Way for Economic Cooperation
Updated 10/22/2024 8:00:00 AM
The BRICS economic and financial track represents a pivotal platform for fostering economic cooperation among member countries. It focuses on key areas such as infrastructure development, trade, investment, and financial regulation, all aimed at promoting sustainable and inclusive growth.
Egypt's recent participation in this track marks a significant milestone, offering a unique opportunity for the country to strengthen its economic ties with the world's emerging powers.
BRICS Expands Global Footprint
Originally consisting of Brazil, Russia, India, and China, the BRICS group underwent its second round of expansion at the beginning of 2024 to include Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE. This addition has significantly extended the group’s global footprint.
“BRICS aims to mitigate the current economic and geopolitical repercussions by finding alternative paths of action for settling trade transactions and opening new horizons for effective engagement in bilateral and multilateral agreements,” Shayma Said El Araby, a PhD holder and an economic expert, tells Arab Finance.
On October 18th, Russian President Vladimir Putin hosted the BRICS Business Forum, emphasizing the strong economic ties between BRICS countries and the group's increasing impact on the global economy.
BRICS controls a significant share of the world’s gross domestic product (GDP). In 2018, the BRICS countries overtook the G7 countries’ share of the world's total GDP in terms of purchasing power parity (PPP). As of 2024, BRICS now holds a total of 35% of the world's GDP, compared to 30% held by the G7 countries, according to Statista.
In his speech during the BRICS Business Forum, Putin asserted that BRICS' economic contributions exceed those of the G7, with the group's total GDP surpassing $60 trillion.
Ahead of the first post-expansion BRICS summit in Kazan, Russia has proposed a blockchain-based payment system. The system would use digital tokens backed by national currencies, allowing secure and efficient transactions without relying on the US dollar. This proposal has been outlined by Russia's finance ministry and central bank.
Egypt's Engagement within BRICS
Egypt's membership in the BRICS group opens doors to economic growth, particularly in industrialization and production. The BRICS Development Bank strengthens Egypt's trade relations with 68 participating countries, expanding markets for Egyptian goods. Egypt will also benefit from the bank's focus on regional cooperation, sustainable development, and infrastructure investment.
As a part of BIRCS, Egypt is not just keen to benefit from the group but to support its members. Minister of Finance Ahmed Kouchouk confirmed Egypt's dedication to strengthening cooperation with BRICS nations to foster economic stability, growth, and development.
During a session titled ‘improving the global monetary and financial system,’ Kouchouk expressed Egypt’s aim to reform the international monetary system. He advocated for a more equitable and inclusive economic framework for emerging markets.
Egypt plans to take on several economic aspects within BRICS. “Egypt aims to engage deeply within the BRICS framework by participating in efforts that require a high level of coordination that may take years,” according to El Araby.
“These include cooperation, local currency swap agreements and equivalent deals, adopting alternative international payment and settlement systems to SWIFT, and introducing a unified BRICS currency,” El Araby adds.
Moreover, Egypt aims to leverage its soft power through cooperation in tourism, culture, and education. As a gateway to Africa, Egypt's strategic location facilitates trade, given its free trade agreements with African nations.
El Araby further highlights Egypt's active role in the Middle East, which positions it as a valuable partner in both political and economic spheres. “Egypt’s strategic location enables it to host an industrial zone for BRICS in the Suez Canal Economic Zone.”
Following the 2nd BRICS Ministers Meeting, President Abdel-Fattah El-Sisi made a virtual appearance at the BRICS Business Forum, held from October 17th to 18th in Moscow. In his speech, El-Sisi stressed the forum's importance in facilitating investment opportunities among member countries and strengthening private sector collaboration. By capitalizing on each nation's unique strengths, the forum aims to promote joint ventures, the president highlighted.
Egypt's membership in the BRICS group offers a pivotal opportunity for the country to strengthen its economic ties with the world's emerging powers.
By participating in the BRICS economic and financial track and leveraging its strategic location, Egypt can gain from increased trade, investment, and infrastructure development.
Through its deep engagement within the BRICS framework and its focus on cooperation across various sectors, Egypt is well-positioned as a valuable partner for sustainable and inclusive growth.
By Sarah Samir
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