INTRODUCTION
At the 15th coordination summit of the so-called BRICS countries in Johannesburg, which includes Brazil, Russia, India, China and South Africa, six additional states were invited to join the group from January 1, 2024. In addition to Ethiopia and Argentina, these include four states from the Middle East – Saudi Arabia, the United Arab Emirates (UAE), Iran and Egypt. So far, the UAE, Iran and Egypt have accepted the invitations, while Saudi Arabia is seriously considering the option, but has not yet made a final decision.
THE BRICS: MORE A SYMBOLIC PLATFORM THAN A SUCCESS STORY
In 2009, the then-BRIC countries met for the first time in Yekaterinburg, Russia, before South Africa was included in 2011, and the group was expanded to become BRICS. Since then, the member states have been meeting regularly and attempting to position themselves as an alternative and counterweight to the US-dominated global economic system, the G7 group, the World Bank, or the International Monetary Fund. In this strategy, however, the individual members do not pursue a unified approach: while China and Russia use the group to push for emancipation from the West and present themselves as an anti-Western camp, especially in times of Russia’s war of aggression against Ukraine, the other members view such polarisation sceptically.
Economically, the BRICS countries have established themselves as global heavyweights, accounting for around 26% of global gross domestic product (GDP) and 16% of world trade. In recent years, however, this enormous economic potential has been determined mainly by China, which accounted for more than 70% of BRICS GDP in 2021: the economy of the People’s Republic is more significant than that of Brazil, Russia, India, and South Africa combined. At the same time, China is an important economic and trading partner for these four countries. Should the number actually rise to 11 members, the BRICS group would comprise a world population of 3.7 billion people. In particular, the establishment of the New Development Bank (NDB) in 2015 must be mentioned as the greatest achievement. With a capital of USD 50 billion, the bank holds significant deposits to finance infrastructure or development projects in developing countries. The NDB includes not only the BRICS countries, but also Bangladesh, Egypt and – since 2021 – the UAE. Since its establishment, the bank has approved bonds to the amount of USD 30 billion, but has so far lagged behind the World Bank, which provided USD 100 billion in funding in 2022 alone. Furthermore, to prevent economic and financial crises, the BRICS countries have set up an emergency fund (Contingency Reserve Arrangement [CRA]) with a volume of USD 100 billion.
Beyond that, however, the successes to date remain limited. Trade within the BRICS group, for example, is at a low level, accounting for 5% of all foreign investment in 2020. And with internal conflicts such as those between India and China, concerns about growing dominance by the People’s Republic, and increasing tensions with Russia in the wake of the Ukraine war weakening the unity of the group, BRICS has so far served primarily as a symbolic platform for the efforts of non-Western states to pursue independent economic policies in an era of a multipolar world order.
BRICS AS A DRIVER FOR SAUDI AND EMIRATI PARTNERSHIP DIVERSIFICATION IN A MULTI-POLAR WORLD ORDER
The possible accessions of Saudi Arabia and the UAE to BRICS do not come as a surprise, as they have been discussed in both countries for some time. Riyadh and Abu Dhabi are adapting their foreign policy agendas to the shifting geopolitics by diversifying partnerships, strengthening their position in the context of the Sino-U.S. rivalry, and moving away from their traditional proximity to the United States. Instead of continuing to be perceived as junior partners of the West, they are expanding their alliances with China, Russia, and other members of the BRICS. In a multipolar world order, the UAE and Saudi Arabia depend on not being assigned to any one camp, but rather, on pursuing a balancing policy as self-confident middle-powers. Their possible accession to the BRICS group underscores this trend. At the same time, however, neither state is seeking to abandon its neutrality in favour of a pro-Chinese and pro-Russian camp. After all, they still consider close partnerships with the United States as a cornerstone of their security policies and want to avoid escalation due to unilateral partisanship. Nevertheless, their accessions also serve as a clear signal to the West that they aim to position themselves as independent actors in a shifting world order.
Against this backdrop, Saudi Arabia and the UAE consider themselves as emerging global economic powers that want to break away from their dependence on oil in the long term by investing extensively in the logistics, entertainment, tourism, sports, and cultural sectors. To this end, they are striving to establish new trade relations and strengthen global networks and market access. Their (possible) accession to the BRICS group serves these ambitions. At the same time, both countries already have very close economic and political ties with China: the People’s Republic is the most important trading partner for Saudi Arabia with a share of 19.8 %, as well as for the UAE with 14.9 %. As such, BRICS accession will also serve to expand these ties even further. Furthermore, China is the most important buyer of Emirati and Saudi oil. Overall, the BRICS countries account for about 37% of Saudi energy exports and 33% of Emirati petroleum exports, and together with Japan, South Korea, and Southeast Asian countries, they constitute the most important markets for both Gulf countries. At the same time, the UAE has established itself as an influential maritime logistics power and aims to expand these networks with the help of BRICS membership. In particular, countries such as Brazil, Argentina or South Africa are interesting partners from the perspective of the Emirati logistics strategy.
BRICS AS A PLATFORM FOR FURTHER IRAN-SAUDI COOPERATION – OR GROWING CONTESTATION
Interestingly, Iran and Saudi Arabia could both join the BRICS group despite their decades-old rivalry for supremacy in the Gulf. However, the recent resumption of diplomatic relations has accelerated a rapprochement between the two regional powers that could be promoted within the BRICS group. Iran has already agreed to join, with the political deputy of Iran’s President Ebrahim Raisi, Mohammad Jamshidi, calling joining BRICS a “strategic victory for Iran’s foreign policy.” If Saudi Arabia also follows suit, this could be seen as another sign of regional de-escalation, and serves as a confidence-building measure for both states.
At the same time, the interests of the two states are very different: Iran sees the BRICS group as an anti-Western construct and as an opportunity to escape international isolation from the sanctions that have been implemented. Saudi Arabia instead sees possible accession as an opportunity to gain even more weight on the world stage as an influential voice of the “Global South” – similar to the BRICS group. This approach can be seen, for example, in the hosting of the Ukraine summit, which took place in August in the Saudi port city of Jeddah. Moreover, Riyadh sees itself as embodying a hinge function, mediating between the pro-Western and anti-Western camps – a role that could be strengthened even further with BRICS accession and that contradicts the Iranian position.
SAUDI ARABIA’S “WAIT AND SEE” APPROACH
Despite such advantages a BRICS membership could have for the kingdom, Saudi Arabia has not yet accepted the official invitation. There is a strategic rationale behind this: after all, the kingdom does not want to further damage its economic and security partnership with the West – especially with the United States – and is looking for a balancing act to represent its own interests vis-à-vis Beijing and Washington, and to profit from a dual partnership with both rivals. Furthermore, this “wait and see” position may be related to the fact that the chances of a diplomatic rapprochement with Israel seem to have improved. Under President Joe Biden, the US administration is trying to reach an agreement between the two states in order to enter the presidential election campaign with diplomatic success. Against this background, Riyadh could also instrumentalise a possible accession to BRICS as a bargaining chip vis-à-vis the US in order to negotiate a better deal in its consideration of normalising with Israel.
On the one hand, Saudi Arabia is aware that joining BRICS sends a symbolic signal to the West and strengthens its own narrative of an autonomous, self-confident, and emancipated global power. On the other hand, the BRICS group’s successes to date have been limited, and the inclusion of crisis states such as Ethiopia or Iran could increase the political and financial risks for Saudi Arabia in the medium term and overshadow the symbolic capital it has gained.
MORE MONEY FROM THE GULF? PERSPECTIVES FOR UAE AND SAUDI FINANCIAL INCENTIVES
Saudi Arabia and the UAE could inject new financial reserves into the NDB, which faces financial shortages. NDB has been suffering from international sanctions since Russia’s war of aggression against Ukraine and is in need of new deposits. Thus, the Emirati Minister of Economy, Abdulla bin Touq Al Marri, already announced that the UAE would provide the bank with new funds, without specifying concrete sums. Via NDB, individual BRICS countries can be economically stabilised and strengthened through Gulf financial support. This could apply to crisis-torn Egypt in particular, which suffers from serious economic stagnation and rising inflation. The other members of the BRICS will also have a strategic interest in supporting Egypt’s economy with direct investment and loans. For Saudi Arabia and the UAE in particular, Egypt remains an important partner for political and economic reasons, and both have provided massive financial support in the past. BRICS accession could make such aid more coordinated.
Nevertheless, no exaggerated expectations should be raised here either: traditionally, Saudi Arabia and the UAE have tended to engage in fiscal support bilaterally through their own development banks and funds, and often view increased multilateral cooperation with scepticism. In the area of humanitarian assistance, Saudi Arabia and the UAE are providing increased financial support to UN institutions, but are, at the same time, frustrated that such contributions have rarely led to an increase in political representation in multilateral bodies. Finally, the Gulf monarchies have become more frustrated with the lack of reforms in partnering countries such as Egypt, which could also weaken their commitment to providing more financial assistance through NDB.
Furthermore, BRICS plans exist to establish an alternative global financial and monetary system and to push ahead with de-dollarisation. Iran in particular will support such considerations in order to break the dominance of the US dollar. Brazil and China have agreed to conduct bilateral trade via their respective national currencies, and China and Russia are already practising this. In Saudi Arabia, the decoupling from the US dollar is also being discussed intensively, as was emphasised by Saudi Finance Minister Mohammad Al-Jadaan in January 2023. Nevertheless, neither the kingdom nor the UAE wish to jeopardise their partnership with the US with such a financial and monetary policy.
A BALANCING ACT: MANAGING NATIONAL AND MULTILATERAL INTERESTS
In principle, Saudi Arabia and the UAE will use the BRICS group to pursue their national interests, strengthen bilateral networks with other members, and reach intergovernmental agreements. If the multilateral nature of the expanded BRICS group helps to push the economic and energy diversification of the two Gulf monarchies, they will resort to it. Otherwise, they hope to intensify cooperation with individual states such as Brazil, India and South Africa, and expect that problematic partners such as Egypt could be put under greater pressure by other member states to overcome their economic crisis and reform standstill. In recent years, Russia and China have sought to use the BRICS group to counter Western interests and drive global polarisation. Saudi Arabia and the UAE, however, do not want to jeopardise their networks with the West, and are not interested in taking sides. Therefore, Saudi Arabia in particular could also consider a possible participation in BRICS as a test balloon to consider a future participation in the China-dominated Shanghai Cooperation Group (SCO).
A WARNING SIGNAL: NEED FOR ACTION IN EUROPE
The expansion of the BRICS group again demonstrates the geopolitical power shift on the global map, and exemplifies the Gulf states’ interest in more multi-alignment. This trend further challenges the traditional supremacy of the US in international politics, and needs to be considered as a warning signal for Europe. Debates within the BRICS countries about “de-dollarisation” could increase in the coming months, and are to be discussed further at the next BRICS summit in Moscow next year. If some BRICS countries were to rely more heavily than before on other currencies such as the Chinese yuan, this would also have an impact on export and investment opportunities for the industrialised European nations. Therefore, Europe should try to use their economic and political networks with states such as the UAE and Saudi Arabia to offer alternatives to economic cooperation. This can be achieved in particular through intensified economic relations in fields such as renewable energy, education and training, climate and development policy, digitalisation, or knowledge transfer.