Egypt’s Pending Membership Of BRICS – An Overview – Silk Road Briefing

Egypt’s membership in BRICS, multilateral trade with main BRICS members, the consequences and effects of membership, and trade and investment prospects

By Farzad Ramezani Bonesh

Egypt’s BRICS Membership Process

Over the past decade, the BRICS has increased its attractiveness by holding dozens of successful meetings and summits. The increasing economic position of BRICS and its leading business capabilities have made Cairo interested in joining the group. Negotiations for Egypt’s membership in the BRICS group began in 2009, but after a period of changes in Egypt, Cairo applied for membership again under Abdel Fattah al-Sisi.

The BRICS Plus 1 was created in 2017 and provided an opportunity for Egypt’s multi-dimensional presence in BRICS mechanisms. Cairo participated in the meetings and summits of BRICS leaders in 2017, 2022, and 2023.

Egypt subsequently applied to join the BRICS countries in 2023, with Cairo’s good relations with BRICS members supporting their efforts to join the bloc. At first, Cairo became a member of the BRICS New Development Bank (NDB). Then the recent 15th BRICS summit saw an invitation to Egypt to become a full BRICS member from January 1, 2024.

The Consequences and Opportunities of BRICS for Egypt

Egypt will be considered an official member of BRICS from January 2024. The President of Egypt, Abdel Fattah El-Sisi, has also publicly expressed his appreciation of the decision of the BRICS leaders to grant full membership to Egypt.

From Cairo’s point of view, BRICS, with about 26% of the area and about 42% of the world’s population; and in strengthening its economic and financial cooperation has an increasing role in the future of the economy and geopolitics of the world.

BRICS efforts in forming alternative payment systems, and non-dollar financial systems, moving away from a reliance on the US dollar, increasing trade with domestic currencies, and the longer-term possibility of creating a common currency can all benefit Egypt.

Egypt does have a lack of USD and Euro foreign currency reserves; however, Cairo can diversify its portfolio of foreign currencies in use of the BRICS currencies instead.

By possessing membership in BRICS, Egypt wants to develop alternative supply chains, promote economic growth, diversify the economy, minimize costs, develop e-commerce and market integration, and cooperate with the other BRICS countries – which now will also include fellow Islamic members Saudi Arabia and the UAE. Egypt has good relations with these countries, while they are all members of the same Free Trade bloc – the Greater Arab Free Trade Area (GAFTA).

Egypt and the New Development Bank

Meanwhile, efforts of the New Development Bank in granting US$10 billion in loans so far this year (a minimum of 30% of each loan being in BRICS currencies) while focusing on the implementation of projects and supporting BRICS infrastructure means Egypt’s participation in the bank and gaining voting power will lead to financial aid, technical, and soft loan support to assist sustainable development and investment in Egypt.

In fact, the BRICS card can be an important option hedging against Western-oriented institutions such as the World Bank and the International Monetary Fund; and can make difficult lending conditions imposed by these easier to circumnavigate for Cairo. The New Development Bank will be more useful and will not impose strict political conditions.

Egypt expects to raise the value of its local currency by becoming a member of BRICS and using an alternative currency to implement several trade initiatives with Russia, China, and India to help reduce dependence on the dollar.

Its membership in BRICS can be steps to develop trade with emerging economies, rapid economic growth, opening new markets, signing new trade agreements (in the currency of Egypt and BRICS countries), and attract investment deals for Cairo.

In fact, BRICS can be a potential source of foreign direct investment (FDI) in Egyptian production. Many in Cairo consider the BRICS card to be effective in reviving the Egyptian currency, increasing the purchase value of the Egyptian Pound against the US Dollar, reducing Egypt’s US dollar debt problems within its economy, therefore helping to open new markets for Egyptian exports, while reducing USD-Pound Forex costs while improving access to alternative financing. Both Saudi Arabia, and the UAE, as additional NDB members, will be sympathetic to Egypt’s requirements.

Egypt – Economic Problems

Some

SDGs, Targets, and Indicators

SDGs Addressed in the Article:

1. SDG 1: No Poverty
2. SDG 2: Zero Hunger
3. SDG 3: Good Health and Well-being
4. SDG 4: Quality Education
5. SDG 5: Gender Equality
6. SDG 7: Affordable and Clean Energy
7. SDG 8: Decent Work and Economic Growth
8. SDG 9: Industry, Innovation, and Infrastructure
9. SDG 10: Reduced Inequalities
10. SDG 11: Sustainable Cities and Communities
11. SDG 12: Responsible Consumption and Production
12. SDG 13: Climate Action
13. SDG 16: Peace, Justice, and Strong Institutions
14. SDG 17: Partnerships for the Goals

Specific Targets and Indicators:

• Target 1.1: By 2030, eradicate extreme poverty for all people everywhere.
• Indicator: Reduction in poverty rates in Egypt through economic growth and diversification.
• Target 2.1: By 2030, end hunger and ensure access by all people, in particular the poor and people in vulnerable situations, including infants, to safe, nutritious, and sufficient food all year round.
• Indicator: Increase in food security and reduction in food imports through trade with BRICS countries.
• Target 3.8: Achieve universal health coverage, including financial risk protection, access to quality essential health-care services, and access to safe, effective, quality, and affordable essential medicines and vaccines for all.
• Indicator: Improvement in access to healthcare services and medicines through cooperation with BRICS countries.
• Target 4.4: By 2030, substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs, and entrepreneurship.
• Indicator: Increase in technical and vocational training opportunities through cooperation with BRICS countries.
• Target 5.5: Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic, and public life.
• Indicator: Improvement in gender equality and women’s empowerment through cooperation with BRICS countries.
• Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix.
• Indicator: Increase in the use of renewable energy sources through cooperation with BRICS countries.
• Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 percent gross domestic product growth per annum in the least developed countries.
• Indicator: Increase in economic growth and diversification through cooperation with BRICS countries.
• Target 9.1: Develop quality, reliable, sustainable, and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all.
• Indicator: Improvement in infrastructure development through cooperation with BRICS countries.
• Target 10.2: By 2030, empower and promote the social, economic, and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status.
• Indicator: Reduction in inequalities through cooperation with BRICS countries.
• Target 11.1: By 2030, ensure access for all to adequate, safe and affordable housing and basic services and upgrade slums.
• Indicator: Improvement in access to housing and basic services through cooperation with BRICS countries.
• Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.
• Indicator: Promotion of sustainable consumption and production practices through cooperation with BRICS countries.
• Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries.
• Indicator: Implementation of measures to mitigate climate change impacts through cooperation with BRICS countries.
• Target 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all.
• Indicator: Strengthening of legal institutions and access to justice through cooperation with BRICS countries.
• Target 17.6: Enhance North-South, South-South, and triangular regional and international cooperation on and access to science, technology, and innovation and enhance knowledge sharing on mutually agreed terms.
• Indicator: Increase in cooperation with BRICS countries in science, technology, and innovation.

Table: SDGs, Targets, and Indicators

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Source: silkroadbriefing.com

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