- Pakistan set to join BRICS to boost its trade influence around the world
Pakistan has formally requested to join the BRICS group, an important group of developing countries. The timing of this move could not have been better considering the fact that the US is losing ground as a dominant power, especially after the Afghan war, then a policy disappointment in Ukraine, and recently in the Middle East, where its strategies and policies have met with utter failure. Pakistan, sensing the opportunity, is trying to catch this chance to engage more actively with emerging global power centers. The request for BRICS membership comes at a time when the group is actively broadening its reach and influence. Formed in 2010, it originally consisted of Brazil, Russia, India, China, and South Africa. But the grouping this year has expanded with the decision to include Saudi Arabia, Iran, Ethiopia, Egypt, Argentina, and the United Arab Emirates from January 1, 2024. There has been an increasing number of nations seeking to join the group. According to the BRICS, over 40 countries have so far indicated their interest in joining the forum.
It is true that Pakistan, from the day of its inception, has been an ally of the US. Certain strategic and regional factors paved the way for Pakistan to rely heavily on the US. However, recently, Pakistan has realised that the relationship with the US could best be described as “carrot and stick” and despite being a nuclear power and one of the most populated countries in the world, the US has always thrown Pakistan under the bus. Pakistan is already a member of SAARC, OIC, ASEAN and SCO but the nature of these organisations is docile. It is, in this backdrop, that Pakistan has applied for BRICS membership with the desire to disentangle itself from the West to a degree and increase its clout in the existing global order. While the economy of Pakistan is classified as a developing economy, it has fallen behind many other countries in the last few years because of continued political instability affecting its economy. It is the 24th largest in terms of GDP based on purchasing power parity (PPP) and the 46th largest in terms of nominal GDP.
Pakistan will certainly benefit if its application for membership is approved in the forthcoming summit meeting in January 2024. But Pakistan faces many hurdles because the decision in the forum is taken by consensus although it is counting on the support of China and Russia for its entry into the group.
In the larger frame of things, BRICS is attempting to become a choice, if not a replacement, of the US-led Western leadership. The US is still far ahead in its economic and local endeavours but when it comes to where world politics are heading, the US is falling behind. The dollar’s supremacy is in decline and trade in local currency will become dominant in the next few years. The recent Russia-India oil deal showed how global dynamics are changing. Making it worse, the policies of the IMF and the World Bank have wreaked havoc on many third-world nations and today Pakistan is facing an economic quagmire never witnessed before. The BRICS membership will serve Pakistan in two different ways. Firstly, Pakistan will be able to utilise closer ties with BRICS countries. Secondly, Pakistan will be able to exert more pressure or present its case with more authority to Western countries, especially the US.
The BRICS countries operate as an organisation that seeks to deepen economic cooperation among member nations and increase their economic and political standing in the world. Out of the world population of approximately 8 billion, BRICS countries represent almost 3.3 billion making it the largest trading bloc in the world. The GDP of the five original BRICS nations accounts for 31.5 per cent of global GDP as of 2023, compared to 30.7 per cent of the G7 nations ranked among the world’s fastest-growing emerging market economies for years.
According to some analysts, by 2050 BRICS economies will come to dominate the global economy. The expansion of the group membership could increase its clout in the existing global order. The group has a set of joint priorities including Working to resolve regional problems (green energy, transport, ICT, sanitation, water projects, food security, environmental issues and poverty alleviation), tackling financial and economic issues like reforms at the World Bank and International Monetary Fund (IMF) by establishing the BRICS Interbank Cooperation Mechanism and BRICS Pay settlement mechanism. The group sees itself as countering the traditional Western-led global order, with some member states viewing the organisation as a way to boost their influence around the world.
As it seeks to expand its clout in order to have a greater say in the global order dominated by the United States, the BRICS group also faces many challenges, including the increasing gap in development and economy among its member states. Some member countries also face the challenge of security and political stability. There is a strong view that economic power will bring political clout to global politics. But the differences on various geopolitical issues put a limit to the group’s united action on various global matters. On many regional and global issues, the member countries take opposite positions. In fact, the group operates as an informal forum of nations that meets annually at the BRICS convention. A major emphasis is to enhance economic cooperation between the countries. The broadening of the group with the induction of six more countries is likely to increase its options. Many of the BRICS nations are also members of the G20.
The BRICS does not insist upon formal trade negotiations and the permanent imposition of tariff reductions. Rather than a defined tariff reduction regime, the BRICS has a far looser approach. This removes political barriers that include insistence on market and political reforms, which is more of a Western approach, and also means that tariff reductions and trade development enhancements can be implemented on an as-needed basis. These are fundamental points of interest to emerging economies that may otherwise struggle to compete with cheap imports. It also allows more autocratic regimes to participate without the need to introduce unwelcome reforms that may not be considered in their national interest.
In the West, trade partner economies are typically viewed in terms of economic capability, and their immediate usefulness (or otherwise) to Western economies. Emerging economies that show promise are often ‘encouraged’ to embark on political and economic reforms to ‘bring them to international standards’. What has become apparent is that this tends to mean ‘Western benefits’ take precedence over these economies. That has included inadvisable World Bank loans and the imposition of US dollar and Euro trade at the expense of their sovereign currencies. In this way, the BRICS can be seen as an antidote to the previously over-regulated Western trade group systems, where members desire to break free of the limitations of a unipolar world in which the US holds economic and political dominion. So, in a world that has been dominated economically by Western powers for centuries, BRICS is a trading bloc that has challenged the status quo and threatens to upset the established world order (NATO and UN). The BRICS movement is developing more as a trade philosophy than a specific bloc – and will pave the way ahead in terms of global trade flows well into the coming decades. There is no doubt that the organisation’s economic power will become one of the most influential factors determining the course of progress in the world.