Egypt's membership of BRICS brings many economic benefits

Egypt, like Saudi Arabia and the UAE, joins BRICS in 2024. (by Adobe).

This article looks at the main issues that are required to achieve Egypt's economic vision after joining BRICS, most notably trade and investment with member states. Ahmad Abdel-Rahman reports.

In January 2024, Egypt will become a full member of BRICS, which was founded in 2006 and held its first conference in 2009. It includes Brazil, Russia, India, China, and South Africa.

BRICS works to encourage trade, political and cultural cooperation among member states. The accession of Egypt, the UAE, Saudi Arabia, Iran, Ethiopia and Argentina to BRICS comes within the framework of many countries' efforts to benefit from the political and economic advantages it offers as part of the group's search to add international legitimacy politically and economically and restore balance to global powers.

This step constitutes a positive shift in Egypt's position politically and economically. The BRICS group represents 40 per cent of the world's population and constitutes about 26 per cent of the global gross domestic product (GDP) with a total value of USD56.56 trillion. This percentage may reach 30 per cent of the world economy after the recent expansion of the membership base. There are estimates that the group's total output in 2030 will exceed the total output of the seven major industrialized countries.

BRICS owns the New Development Bank, which was established in 2015 with an initial capital of USD50 billion. It aims to be an alternative to the World Bank and to develop and build large-scale development partnerships, especially infrastructure. Egypt joined the New Development Bank in 2021, with a contribution of about USD1.2 billion.

A member of the Board of Directors of the Egyptian Lebanese Businessmen Association, Zainab Al-Ghazali, confirmed, that Egypt's accession to the BRICS group will benefit the Egyptian economy and the Arab economies more broadly. She said it is a step that is in the interests of all member states, especially in difficult global economic conditions.

"There are important factors that explain the importance of trade and economic exchange between the countries of the group, which make us enthusiastic about activating transactions within the framework of commercial transactions and commodity exchange and in the local currency of each country, which reduces the pressure on the demand for foreign currencies, Al-Ghazali said.

Al-Ghazali also pointed out that joining BRICS presents a great opportunity to increase the rates of trade exchange and joint investments between Egypt and the member states. This is in addition to being in a bloc that protects Egypt's political and economic interests, encourages cooperation and the exchange of experiences, as well as benefiting countries that deal in the local currency of each country, explained Al- Ghazali. 

In contrast, vice chairman of the Sustainability Committee of the Egyptian Businessmen Association, Ahmed El-Shenawy, said that there are major issues that must be dealt with to achieve comprehensive economic returns from Egypt's official accession to the BRICS group.

However, he also pointed out that these issues focus on trade and investment. And these new opportunities will enable Egypt to have improved trade access to large markets such as Brazil, Russia, India, and China.

In terms of economic cooperation, El-Shenawy stressed that Egypt's accession to BRICS could lead to a strengthening of economic cooperation between Egypt and other member states in areas such as technology, and renewable energy, which could contribute to improving Egypt's competitiveness.

He also pointed out that it is likely that Egypt will enjoy improved economic returns as a result of being a member of this important grouping. These benefits include the strengthening of cultural and educational cooperation between Egypt and other member states through the exchange of knowledge and experiences in fields of culture, arts, and education.

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Saturday, 02 December 2023