Growing BRICS a force to be reckoned with
Could surpass economic size of G7
Josef Kefas SheehamaIt is not surprising that the BRICS group will usher in a new economic order if the Group of Seven (G7) does not act to address its shortcomings, as the group’s expansion presents new economic opportunities for developing countries.
There is no doubt that the establishment of BRICS represented a major step forward in the long-term integration of member countries, both politically and economically. To accelerate national development, countries can form political, social and economic alliances.
According to projections for 2023, the BRICS countries account for 46% of the global population.
International Monetary Fund (IMF) estimates indicate that by 2026, the G7 will account for 29% of the global gross domestic product (GDP), while BRICS will make up 38%.
Therefore, a revolutionary change in the world order has been subtly taking place, even as all eyes are on the wars raging in the Middle East and Eastern Europe, as well as the growing number of armed conflicts between the world’s superpowers.
Large emerging nations are beginning to build institutions that challenge Western-led organisations and are starting to exert more influence over international economic matters.
Super bloc
In addition to the five permanent members - Brazil, Russia, India, China and South Africa - the grouping now comprises five new members: Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates, who joined in January this year.
Taken together, these ten countries produce and export about 40% of all crude oil. Furthermore, they make up almost half of the world’s population, 25% of global GDP and 25% of global goods trade.
If the twelve additional countries that have applied for membership, including dynamic emerging markets like Bangladesh, Vietnam and Thailand, are admitted, the bloc would account for one-third of the world’s GDP.
Thus, the G7 will need to put in significant effort or else BRICS may overtake them within ten to fifteen years.
Trade
Remarkably, Turkey has applied to join BRICS, seeking economic benefits without major political or financial commitments.
Turkey has begun exploring alternative economic platforms due to the current deadlock in its EU accession process.
It is important to view BRICS as an additional channel for economic cooperation rather than a replacement for the European Union (EU) or the North Atlantic Treaty Organisation (NATO).
As a result, intra-BRICS trade intensity has increased, with trade in goods between BRICS economies significantly surpassing trade between BRICS and G7 countries.
Many of these economies now carry significantly more weight in the global economy as producers and consumers due to decades of rapid growth.
These countries are forming another alliance that is less reliant on the West, given their engagement with both China, seen as an economic and trade superpower and advanced economies.
What’s in it for Namibia?
Strategic alliances and partnerships are essential for promoting growth and prosperity in the dynamic global economy.
With significant potential for economic cooperation and mutual benefits, the BRICS alliance represents an important coalition of emerging economies.
Engaging with BRICS can create new opportunities for growth, expansion and access to global markets for small nations like Namibia and Namibian businesses.
Market access
The potential integration comes at a crucial time when Namibia is implementing the Sixth National Development Plan (NDP 6) and structural reforms to enhance its global competitiveness, reduce the cost of doing business, attract investment and stimulate economic growth.
Namibia can expand its market access, stimulate industrialisation and amplify its contribution to BRICS through harmonised trade policies and market integration.
Namibia’s proximity to the BRICS network offers more than a symbolic role; it presents an opportunity for the nation to assert its presence on the global stage and contribute to reshaping the economic dynamics of emerging economies.
By fostering economic stability, investing in infrastructure, empowering human capital, promoting exports and aligning regional and multilateral efforts, Namibia can carve out a significant role within BRICS that is both impactful and mutually beneficial.
As Namibia embarks on this transformative journey, all stakeholders must recognise the immense potential of collaborative action and work collectively to position the nation as a driving force within the BRICS consortium.
Dynamic efforts
This requires comprehensive and dynamic efforts to bolster Namibia’s export market access and diversify its markets to new regions and products while strengthening regional trade. The BRICS alliance will be a source of growth that Namibia cannot afford to ignore. Membership would attract investments from other nations, including China and India, which remain major players in the world economy.
China’s involvement in BRICS and its Belt and Road Initiative also have the potential to accelerate economic growth and development.
Possible US impact
What possible impacts might BRICS have on relations between the US and Namibia?
Under the African Growth and Opportunity Act (AGOA), Namibia might lose its preferred access to American markets.
The loss or reduction of trade benefits under AGOA could negatively impact Namibia’s economy, decreasing trade opportunities, foreign direct investment and economic aid.
The challenge for Namibia will be to clearly define and persistently pursue its own interests.
Development bank
Moreover, the introduction of the New Development Bank by BRICS represents a significant step forward in challenging the dominance of the World Bank and the IMF.
The potential introduction of a BRICS single currency could reduce the reliance on other currencies.
While it is unlikely that the US dollar will be dethroned as the world’s reserve currency soon, it is prudent to be prepared for when that change occurs.
The availability of currency alternatives and new technologies, combined with concerted actions among adversaries and allies to establish non-dollar-based infrastructures and international financial arrangements, is a significant development.
In this context, Namibia cannot afford to withdraw from the BRICS alliance.
These nations significantly influence global investment, trade and economic growth.
The BRICS countries have the potential to become major actors in international affairs, stabilising the world economy and promoting international trade.