Historical Opportunity for Economic Self-Reliance
Last August, the 15th regular summit of the BRICS member states held their annual heads of state and governments meeting in South Africa. At the end of the conference, the BRICS group of nations invited six countries – Argentina, Egypt, Iran, Ethiopia, Saudi Arabia, and the United Arab Emirates to join the block. From the beginning of the following year, these six countries will join the current five members – Brazil, Russia, India, China, and South Africa. These countries were among the over 40 countries that expressed interest in accession.
The BRICS bloc was founded in 2009 to provide a platform for its members to challenge a world order dominated by the United States and its Western allies. According to the 2022 World Bank data, the consortium collectively represents 41Pct of the world’s population and accounts for 26Pct of the global GDP.
BRICS is not a show platform for heads of state. It is a geopolitical and economic club that rivals the more advanced economies of the Group of Seven (G7), comprising Canada, France, Germany, Italy, Japan, the UK, and the US. BRICS ally to counterweight the West. They have established various institutions, such as the New Development Bank and the Contingent Reserve Arrangement, to reshape global economic governance.
BRICS is a consensus-based organization, and all members have agreed on the guiding principles, standards, criteria, and procedures for accepting new members. Even though I have yet to learn about the requirements for admission, the decision by BRICS to invite Ethiopia as a new member considers the following factors.
The first reason is the geopolitical significance of Ethiopia. The influence of Ethiopia’s geographical features, demography, and economic potential on regional politics is considerably high. Ethiopia is part of the Red Sea region, the main export route for Arabian petroleum. The Red Sea offers an alternative route around the Cape of Good Hope. The Red Sea is not only a vital route for the transportation of oil and goods, but the region also has large oil reserves and precious metal resources.
The Red Sea maintains many countries’ political and economic stability. Because of its strategic location and economic importance, world powers are attracted to the region, and there is a rising militarization in the Red Sea. As it is already close to the Red Sea, Ethiopia is a geopolitical and economic battleground for big and medium military powers.
The second reason for selecting Ethiopia is the population size of the country. Ethiopia’s population has now topped 125 million. This factor makes the country the second most populous nation in Africa. According to the projection made by UNFPA (2011), by 2050, Ethiopia’s population will surpass 174 million to become the 9th most populous country in the world. The population growth is high in the young adult age group (15-29). About half of the country’s population is aged 15-29. This period is a demographic dividend, and BRICS countries have a considerable workforce supply for investment and industrialization.
The third reason is related to the Nile River, the primary source of which is in Ethiopia. The River Nile also flows through and along the borders of other African countries, such as Tanzania, Uganda, Kenya, South Sudan, Sudan, and Egypt. The construction of the Grand Ethiopian Renaissance Dam gave rise to a lengthy dispute between Sudan, Egypt, and Ethiopia. The disagreement became international, involving the Arab League, the EU, the US, the UN Security Council, and the African Union. The mega-project presents not only a source of energy but also a diplomatic opportunity for BRICS countries.
The fourth reason is related to the motives and efforts of BRICS to have more political influence in Low-Income Countries (LIC) through south-to-south cooperation. Ethiopia is a low-income country with a GDP per capita of USD1027. Even if there are inequalities within their respective countries, BRICS countries have witnessed rapid economic growth in the last two decades, demonstrating massive potential for an accelerated pace of development. According to the World Bank, China and Russia have an estimated GDP per capita between 12,000 and 15,000 US dollars per person. Their GDP per capita is roughly ten times larger than those of Ethiopia.
According to the World Bank, low-income countries have the weakest economies. The characteristics of low-income countries include inadequate technology capital, low saving rates, dual economy, heavy dependence on international trade, rapid population growth, low literacy school enrollment rates, unskilled labour force, poorly developed institutions in China and other fast industrializing BRIC members now want to be in control to sustain the supplies to their industries.
The fifth reason for the admission of Ethiopia to BRICS is a recognition of Ethiopians’ continuous struggle for independence from the unfair domination of Western countries and their meddling in its internal affairs. BRICS countries invariably advocate foreign policies and practice independent, self-motivated development paths. The current BRICS members are convinced that Ethiopians have a tradition and culture of resisting pressures from outside. When it comes to freedom and independence, Ethiopians have the determination, courage, and confidence needed to defend it.
BRICS is an emerging power alliance in global investment and trade governance. The BRICS countries’ trade and investment interactions and cooperation will drive the world economy in the coming years. Deepening economic ties with BRICS countries presents a huge potential and opportunity for self-reliant and sustained economic growth and development for low-income countries such as Ethiopia.
The question now is Ethiopia ready to take this opportunity? Like any other globalization process and interaction, BRICS has its own game rules: foreign trade and investment support rapid economic growth and structural transformation in the BRICS countries. Ethiopia needs a strategic vision document to create macroeconomic and political stability to attract the BRICS countries and take the occasion for the creation of self-reliant economic prosperity.
11th Year • September 2023 • No. 121 EBR