The formation of BRICS in 2009 and its activities in the last year have drawn attention from political and economic analysts owing to the complex nature of international cooperation between member countries. While many hope to see the organization impact the political scene more, others predict more potential economic benefits.
What Is BRICS?
BRICS is an international organization of emerging economies led by Brazil, Russia, India, China, and South Africa, established to foster deeper and stronger ties between member nations. The coalition has grown in popularity and strength over the last year, dominating significant discussions interesting to analysts and various industry leaders.
The organization is expected to impact the political and economic landscape of member nations and the world generally, with activities such as CFD trading, investments, and economic policies poised to shape up in response to such potential impacts on global markets.
The UAE was invited to join BRICS as a critical member nation, along with Saudi Arabia, Iran, and six other countries. The potential implications for the UAE are numerous; analysts expect diverse responses in the UAE’s business and political landscape, reflecting its status as a member nation in the coming years.
Access to a Wider Market
BRICS currently has over 40% of the global population and a quarter of its GDP; this makes the bloc a significant market. As one of the top ten oil producers globally and a leading center for technology and innovation, the UAE exports many products and services and has a massive international trading presence. Joining the organization brings the UAE closer to emerging economies and opens trading partnerships with more global markets.
For instance, mutual agreements within member nations may see greater cooperation between the UAE and South American countries and facilitate a smooth trade flow between them. Member nations with trade agreements with non-BRICS countries may have more market penetration.
Attract Top Talents
The UAE’s friendly immigration policy already makes it easy for global talents across diverse industries to find jobs with competitive wages in the UAE. In 2021, for instance, the UAE launched its National Program for Coders, which aims to train 100,000 coders by 2026 from within and outside the UAE. A BRICS membership makes reaching this goal easier for the UAE by providing easy access to a large pool of global talents from partner nations such as South Africa and India.
This could supercharge the UAE’s economy and lead to massive growth in various sectors. The UAE’s Minister of State for Artificial Intelligence, Digital Economy, and Remote Work Applications, Omar Sultan Al Olama (also the chairman of the Dubai Chamber of Digital Economy), says that the UAE is looking to open doors and markets to global tech talents and companies.
Increased Diplomatic Clout
International relationships hinge on economic and political strength, and nations with more clout than others have more negotiating power. Joining the organization opens the UAE to a powerful political bloc that can throw its weight behind the nation during international negotiations across finance, security, and other sectors. BRICS has major oil and gas exporters and can move that power when necessary.
A Possible Global Economic Dominance
The UAE is the second-largest economy in the Arab world and surpassed $600 billion in non-oil trade in 2022. A BRICS membership may place the UAE in a position for global economic dominance if there’s a power shift from the West-led economy. With other Middle Eastern nations having some of the strongest currencies today, shifting away from the US Dollar domination may see increased adoption of other currencies, such as a future BRICS currency.
Through strategic positioning, the UAE can develop into a major economy with a strong currency in the proportions of the GBP, USD, and EUR. Of course, many factors will influence this, but there’s always a possibility of it happening.
Economic Diversification
Economic diversification is vital to increase economic strength and achieve stability and growth. The UAE’s economic diversification policy has seen the nation move from oil-only products to deriving non-oil economies. Becoming a BRICS member improves the chances of achieving economic diversification on a large scale so the UAE and member nations can enter international trade at a lesser cost.
Increased Funding and Investments
In 2022, the Arab world received a combined $52 billion in foreign direct investment (FDI); the UAE came first with about $23 billion in FDI. These went on the strength of the current foreign partnerships and trade agreements. There are projections for increased funding and foreign investments for capital projects in the UAE spearheaded by its association with one of the biggest trading blocs today.
The UAE’s Bright Future as Part of BRICS
One of the aims of BRICS is to create an economic partnership that shifts the current power balance to include new and emerging economies for a more decentralized global financial sector. Although many consider BRICS an international alliance to move power from key Western economies, the organization and member countries are set on improving local, regional, and international cooperation. The UAE is in a strong position to benefit from partnering with other member nations for economic expansion and political developments.