Saudi Arabia is in
talks to join the BRICS’ New Development Bank (NDB), a
precursor to inclusion in a club that includes Brazil, Russia, India, China,
and South Africa. Extending membership to Riyadh would signal the bank’s
interest in challenging the West’s monopoly over global financial institutions
and represent a counterweight to rich-country clubs like the G7, which
are seen
as neocolonial structures, especially in the Global South.
اضافة اعلان
Saudi Arabia's
financial heft would give the BRICS — or BRICSS? — bank a more prominent role
in multilateral funding and is aligned with the group’s plans to create alternate
financial structures not dominated by Washington.
Critics often point
out that the IMF and World Bank tend to structurally
under-represent the Global South in their
decision-making, and are too-closely aligned with Western foreign policy goals.
As global funds shrink from investments in Russia and China, the NDB might
offer an alternative.
In this context,
the entry of Saudi Arabia into the BRICS would send a message that its current
and future members are likely to seek alternative structures of global
governance and financing. The West seems to have taken note:
the G7 this year invited India,
Brazil, the African Union, Vietnam, Indonesia, and South Korea as observers.
Saudi Arabia joining the BRICS would cement this geopolitical trend while reminding Washington of its diminishing clout. Despite US President Joe Biden’s journey to Saudi Arabia last year to convince the kingdom to raise oil output to offset high global energy prices, Saudi Arabia did the opposite.
Like current BRICS
members, Saudi Arabia is neutral on the Russia-Ukraine conflict. One factor
behind this is that while BRICS states are largely in sync with the post-World
War II consensus on the sanctity of national borders and sovereignty,
they share
a mutual frustration with the West’s double standards in
this area.
The calamitous
aftermath of US President George W. Bush’s Iraq invasion, which killed hundreds
of thousands of Iraqi civilians, resonates as a painful
reminder of that hypocrisy.
Where BRICS member
states diverge markedly from their Western counterparts is on the principle of
non-interference in domestic affairs, as each BRICS member operates under vastly
different regime types and doesn’t comment on each other’s domestic politics.
Politically, this is broadly the glue that keeps the BRICS together.
Saudi Arabia
joining the BRICS would cement this geopolitical trend while reminding
Washington of its diminishing clout. Despite US President Joe Biden’s journey
to Saudi Arabia last year to convince the kingdom to raise oil output to offset
high global energy prices, Saudi
Arabia did the opposite. The decision, which no doubt
benefited Russian President Vladimir Putin — and which Riyadh justified on the
basis of economics — was viewed as a way to distance
the kingdom from Washington’s approach to Russia and
China.
At the World
Economic Forum this year, Saudi finance minister Mohammed
Al-Jadaan said Saudi overseas funding would now come
with strings attached: it would be tied
to economic reforms in recipient countries. As such,
Saudi Arabia’s BRICS membership would give the kingdom a seat at the table as
the grouping seeks to re-shape the global financial landscape.
Domestically, at a
time when Saudi Arabia is planning to diversify its economy, expand its tax
base, and reduce its generous public sector, BRICS membership would provide a
platform to showcase a new approach to external funding that is responsible and
prudent.
China has likely
played a role in championing Saudi Arabia’s BRICS bid. In March, Saudi Arabia
joined the China-centric Shanghai Cooperation Organization (SCO) as
a dialogue partner and was in active
talks with China to conduct oil-related transactions in
yuan.
Not
that Saudi membership would raise many objections from other BRICS states. None
would be averse to de-dollarization initiatives as a form of insurance against
repeated American weaponization of the global dollar-dominated financial
system. After taking over the NDB’s presidency in March, Dilma Rousseff, a
former president of Brazil, emphasized the
bank’s future strategy to fund
projects in local currencies, thus nurturing domestic markets
and shielding borrowers from volatile currency exchange fluctuations.
As more countries
express interest in joining the BRICS, there are likely to be many challenges
for its members.
Domestically, at a time when Saudi Arabia is planning to diversify its economy, expand its tax base, and reduce its generous public sector, BRICS membership would provide a platform to showcase a new approach to external funding that is responsible and prudent.
First, the NDB is
at least a decade from bypassing Western sanctions against Russia. To assuage
investor concerns, the NDB suspended
its financial involvement with Russia in March 2022 and
has also stopped financing new projects in the country.
Second, there are
territorial rivalries among the BRICS (China and India, for instance) that may
hamstring the group.
Third, except for
India, none of the other BRICS countries have the same rosy economic prospects
they enjoyed at the group’s inception in 2009.
Fourth, the NDB has
relatively little to show in terms of investments. Since 2015, it has funded
approximately 96 projects to the tune of $33 billion, compared to the World
Bank’s disbursal of almost $67
billion for the year ending June 2022.
Fifth, member
countries are separated by vast distances, have different political systems,
are not fully complementary on trade, and aren’t fully aligned on geopolitical
postures.
Finally, even on
the issue of expansion, there are divergences
on criteria between member states. Without resolving
these issues, an expanding BRICS (or whatever acronym it transitions to) may
collapse under the weight of its own contradictions.
Nonetheless, even
as the world watches these developments unfold — with interest or trepidation —
the potential BRICS expansion should be interpreted by the West as a message
that it cannot advocate for an international geopolitical order or global
financial system while also attempting to monopolize the definitions.
Dnyanesh Kamat is a political analyst who
focuses on the Middle East and South Asia. He also consults on
socio-economic development for government and private-sector entities
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