Egypt takes a stride towards economic diversification with its inclusion in BRICS.
Egypt takes a stride towards economic diversification with its inclusion in BRICS - File Photo
President Cyril Ramaphosa of South Africa has extended a formal invitation to Egypt, Argentina, Saudi Arabia, and the United Arab Emirates to become full members of the BRICS group. The new members will officially join BRICS from January 1, 2024.
Announcing the outcomes of the 15th BRICS summit, President Cyril Ramaphosa stated, "The new entrants will become integral parts of BRICS, starting from the 1st of January 2024." The summit took place at the Sandton Convention Center in Johannesburg.
During his speech at the opening of the second day of the BRICS summit, President Ramaphosa called for the activation of a new and comprehensive international system. He emphasized the need for enhancing global southern interests and urged industrialized nations to fulfill their climate commitments and economic progress measures.
The BRICS summit's fifteenth edition began at the Sandton Convention Center in Johannesburg, South Africa, on Tuesday. The event, anticipated to last three days, will be attended by over 40 heads of state, government representatives, and international figures, along with summit delegates.
President Ramaphosa expressed deep concern over global conflicts and highlighted the importance of diplomacy, dialogue, negotiation, and adherence to the principles of the United Nations Charter for peaceful and just resolutions. He underscored the need for reliable global payment systems, especially for economic recovery, seamless banking services, supply chain trade, and tourism.
In his address, President Ramaphosa announced that South Africa will continue discussions on practical measures to facilitate trade and investment flows, including increased use of local currencies. He added, "We believe that further discussions are necessary, especially among our finance ministers." He expressed confidence that the 15th BRICS summit will advance prosperity and shared progress.
Russian President Vladimir Putin, speaking via video link at the summit, commended President Ramaphosa's remarkable diplomatic skill in coordinating positions, including those related to expanding the BRICS group.
Indian Prime Minister Narendra Modi also welcomed the expansion of the five-member bloc, emphasizing that the addition of new members will enhance BRICS as an organization and provide new momentum for joint efforts.
Earlier, the South African Ministry of Foreign Affairs mentioned that 23 countries had submitted official requests to join BRICS, with other nations expressing unofficial interest.
The BRICS summit's expansion comes in line with the group's focus on building mutually beneficial relationships among emerging economies. The BRICS member states, Brazil, Russia, India, China, and South Africa, collaborate to enhance trade, innovation, and development initiatives. This expansion represents a significant step toward greater global economic cooperation.
Chancellor Ahmed Fahmy, the official spokesperson for the presidency, remarked, "We highly value the confidence extended by all member nations of the alliance, with whom we share close relationships.
"We eagerly anticipate collaborating and coordinating with them in the coming period, along with the invited countries, to achieve the alliance's objectives of reinforcing economic cooperation. This collaborative effort aims to amplify the voice of the southern nations on various developmental challenges, in a manner that supports the rights and interests of developing countries."
Dr. Hisham Ibrahim, a finance and investment professor, commented on Egypt's inclusion in BRICS, stating that it acts as a lifeline, addressing numerous challenges the country has faced in recent times. By aligning with BRICS, Egypt moves towards a more vibrant direction, akin to nations like China, India, Russia, and Brazil, which boast substantial economic and trade interactions. This positions Egypt as a conduit to alleviate its challenges, especially in managing foreign currencies, particularly the dollar.
Dr. Ibrahim further elucidated that Egypt's inclusion in BRICS will provide an opportunity for it to engage in trade with major economies such as China, India, Russia, and Brazil, utilizing their local currencies. This shift will relieve pressure on Egypt's reliance on the dollar.
He pointed out that Egypt's membership in BRICS comes as countries globally search for alternatives to the dollar. This move will not only affect the United States but will have significant repercussions for Egypt, which relies on other currencies for foreign exchange.
Dr. Ibrahim highlighted that while Egypt has a robust underlying infrastructure, investment was impeded due to a foreign campaign targeting expatriate remittances, affecting the Egyptian banking sector.
Dr. Huda El Mallah, Director-General of the International Center for Economic Consultations and Feasibility Studies, stated that the impact of Egypt's and six other nations' entry into the BRICS summit extends beyond the US. Egypt's dependence on other currencies for international trade would enable it to withstand dollar fluctuations.
Dr. El Mallah added that having a unified currency within BRICS would also significantly reduce the dollar's dominance. As a considerable portion of Egypt's imports is from BRICS nations such as China and India, local currency adoption within the group would be favorable for Egypt's economy, mitigating the pressure of a strong dollar against the Egyptian pound.
She underlined that Egypt's inclusion in BRICS is a positive and expected development, aligning with the nation's clear policies and strategies. She emphasized that not including Egypt in the BRICS 2023 summit, which is set to lead the global economy, would have been illogical.
The BRICS summit, attended by five major economies – Russia, Brazil, India, China, and South Africa – serves as a significant economic bloc on the international stage. As several other countries express interest in joining the alliance, BRICS 2023 is poised to shape a more diversified economic landscape.
