“BRICS+ Unveils New Era of Economic Cooperation & Influence!” | (Unpacking Promises Of A New Chapter In Economic Cooperation, Global Influence With BRICS+)

BRICS, an acronym for Brazil, Russia, India, China, and South Africa, was initially established in 2009 as a coalition of emerging economies aimed at enhancing cooperation on economic and political issues. The group originally formed as “BRIC” in 2006 through meetings between Brazil, Russia, India, and China, and held its first official summit in 2009.

South Africa joined the bloc in 2010, completing the current acronym. Ethiopia, along with five other countries, joined the bloc 13 years later as part of an expansion amid rising geopolitical tensions. As of 2024, the BRICS initiative includes nine member countries, referred to as BRICS+.

Although it has yet to make much of an impact on the ground, the bloc has the potential to transform global power dynamics and financial systems, as member countries account for an estimated 45 percent of the world’s population and 28 percent of global GDP.

This potential was among the topics discussed by heads of government, including Prime Minister Abiy Ahmed (PhD), during the 16th BRICS summit held in Kazan, Russia, last month.

On November 5, 2024, the Embassy of Russian Federation in Ethiopia hosted an event to present the general outcomes of that summit.

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The presentation was led by the Ambassador of the Russian Federation to Ethiopia and Permanent Representative to the AU, Evgeny Terekhin. During the briefing, it was highlighted that the initiative operates as a multilateral platform with flexible and open-minded opportunities for all members to share equal decision-making as well as address shortcomings.

The Ambassador observed that BRICS+ offers diverse economic cooperation opportunities with politics and security, economy and finance, and cultural and humanitarian relations as the key pillars of the initiative. The Ambassador noted that the initiative stands out as a “formidable coalition” with a growing population, dynamic economies, and increasing security capabilities.

Evgeny sees Ethiopia’s entry into BRICS+ as representing a hopeful new era for the nation on the international stage, promising benefits politically and economically, with the country’s abundant farmland, substantial mineral wealth, renewable energy resources, and growing technology sector all creating a promising future.

Abraham Tekle of The Reporter conversed with Evgeny to explore the significance of Ethiopia’s BRICS membership and what lies ahead in terms of economic and political sustainability, among other important issues. EXCERPTS:

The Reporter: Ethiopia recently attended its first BRICS summit during the 16th occasion of the gathering. What was the main agenda of this time around?

Evgeny Terekhin (Amb.): The 16^th BRICS summit in Kazan emphasized multilateralism, financial innovation, and alternative payment systems where leaders condemned unilateral sanctions and called for international law adherence. Moreover, the association advocated for IMF and World Bank reforms, highlighting their commitment to equitable global development and security. 

The growth and expansion of BRICS has presented an alternative form of world cooperations. This new ideological paradigm seeks to challenge the global, unipolar system by accentuating, recognizing and leveraging the role of Global South countries and emerging economies in economic cooperation, trade, infrastructural development and peace as well as security. Additionally, the initiative is led by principles of sovereign equality, strategic cooperation, inclusiveness, and most importantly, multilateralism.

With Ethiopia’s membership in BRICS now a reality, marking a major milestone in its foreign policy, economic strategy, and international relations, what achievements do you think were made during the summit?

It was the first time that Ethiopia has participated in the summit after officially joining the initiative as a full member in January 2024. It was a summit in which Ethiopia made her voice heard by urging there should be a reform of the global financial system and that a place should be given to Africa in the Security Council of the United Nations.

The Ethiopian high-level delegation led by the Prime Minister Abiy Ahmed (PhD) took part actively in the summit where the discussion aimed at shaping a more equitable global order. The discussion made sure that the interest of Ethiopia was well represented in the arena by contributing valuable insights to the deliberations. Given that the BRICS bloc represents a powerful economic group of nations that accounts for a third of the global economy and about half of the world’s population, its impact on world affairs cannot be ignored or sidelined, and that is why Ethiopia has been anxious to seek its membership role in the association.

The summit was also important for Ethiopia’s stance in the world as members of BRICS expressed their interest in collaborating with Ethiopia in areas of peace and security by working together. It was a venue where Ethiopia made its point that global conflicts and tensions were having a negative impact on peace and security as well as a lot of harm is being caused to civilians. Here, the threats of cyber-attacks, misinformation and hate speech are mentioned as affecting the global peace in a highly digitalized era.

So, one of the outcomes of the summit was that countries have pledged to enhance the capacity of the security institutions and collectively contribute towards global peace. Thus, Ethiopia’s contribution to the safeguarding of peace and security has been highlighted at the summit. More willingness has been shown on the part of countries at the summit to cooperate with Ethiopia in this sphere.

As one of the newest members of BRICS, how could Ethiopia’s integration into the group influence its economic and political landscape? What wider effects might this shift have on the evolving global order?

The rise of BRICS reflects a shared belief among important emerging players that the Western-dominated, rules-based international order and particularly the system of global economic governance is both stacked against their interests and fundamentally outdated. From the outset, BRICS was conceived as a geopolitical and geoeconomic counterweight to the west, which had for decades sought to manage the world economy through its own minilateral club.

BRICS originated in the wake of the 2008 Global Finance Crisis as a reformist grouping that aimed to challenge Western dominance over Bretton Woods multilateral financial institutions. Since 2014, BRICS has taken on a geopolitical character, aiming to challenge the current world order, which is dominated by Western powers and has shown its limitations for the majority world that is organized to foster a more legitimate international system.

The Global South views BRICS as an alternative multilateral group that aims to inclusively represent its interests. Despite differing, and sometimes competing, priorities, BRICS members share a common vision of enhancing the role of the Global South in the global order. Russia, in particular, seeks to strengthen partnerships with these nations to promote mutually beneficial agendas. Through BRICS, member countries retain the flexibility to pursue their interests through negotiation.

As global power shifts, BRICS stands out as a formidable coalition with a growing population, dynamic economies, and increasing security capabilities. Ethiopia, given its population size, economic and political, and geopolitical significance, will strengthen the association and contribute to the development of its institutions. In a unipolar world, powerful nations dictate terms without alternative organizations to balance influence. BRICS offers a promising avenue for loans and assistance essential to Ethiopia’s aspirations for prosperity.

Moreover, the BRICS nations have taken some steps to reduce the ability of the United States and its allies to weaponize global interdependence, including Washington’s control of chokepoints for international financial infrastructures. Now we see the BRICS countries have focused on mechanisms to facilitate trade and investment in local currencies as well as to diversify their currency reserves. So, for the US and the other western governments, BRICS+ is a reminder of the dangers of ignoring the legitimate demands of countries and people around the world for greater agency, influence, and power in the structures of global governance that shape their fate. And again, I believe that Ethiopia’s entry into BRICS represents a new era for the nation on the international stage, promising benefits politically and economically.

Could Ethiopia’s BRICS membership open up new opportunities for cooperation?

Unlike other international organizations, BRICS operates as a multilateral platform with flexible and open-minded opportunities for all members. Its convention allows each member state an equal voice in decision making, addressing shortcomings of prior organizations. With almost half of the world’s population and a collection of emerging economies, BRICS offers diverse economic and cultural cooperation opportunities.

As the global power structure shifts, BRICS stands out as a formidable coalition with the growing population, dynamic economies, and increasing security capabilities. So, Ethiopia, given its population size, economic potential, and geopolitical significance stands to benefit immensely from the BRICS membership.

Moreover, the New Development Bank (NDB) aligned with BRICS aims for a more inclusive, resilient, and sustainable world, presenting member nations with equitable and accessible economic opportunities. With its democratic decision-making structure, BRICS is notably more egalitarian than many established organizations. Ethiopia can now import advanced technologies while exporting agricultural products, minerals, and others.

So, with an open economy primed for Foreign Direct Investment (FDI), Ethiopia is well-positioned to benefit from the BRICS membership. In this manner, Ethiopia is already maintaining strong relationships with several member countries, having developed significant import-export ties with Russia, China, and India. Similarly, Ethiopia and the UAE enjoy thriving trade exchanges. Additionally, South Africa hosts a sizable Ethiopian diaspora, adding further dimension to these bilateral connections. 

How are Russia’s diplomatic and economic relations with Ethiopia and other African countries impacted with the Kazan declaration?

As the integration serves as a crucial platform for emerging economies to assert their influence in a rapidly changing world, the recent summit underscored the importance of multilateral cooperation for global development and security. Leaders emphasized that “all states should act consistently with the purpose and principles of the UN Charter” to foster a fairer international order. This commitment aims to address challenges like unilateral sanctions and promote sustainable development across BRICS nations.

Additionally, the Kazan declaration addressed cross-border terrorism, endorsing India’s Comprehensive Convention on International Terrorism (CCIT) initiative. It also called for swift action on listing UN-designated terrorists, emphasizing collective security and counter-terrorism efforts among BRICS members. So, the member countries reaffirmed their commitment to strengthening financial cooperation and expanding the use of local currencies to enhance economic stability and drive development as well as to reducing vulnerabilities and mitigating the impact of external economic shocks on emerging and developing countries.

And again, the summit-initiated discussions on establishing alternatives to existing financial systems dominated by western powers. Proposals included a cross-border payment system and enhanced roles for the NDB aiming to provide member countries with greater financial autonomy and resilience against external shocks. The declaration also welcomed initiatives like the BRICS Grain Exchange aimed at improving food security through enhanced trade in agricultural commodities. This platform is expected to facilitate better cooperation among member states in addressing food supply challenges. Cooperation of digital health and traditional medicine was also highlighted as vital for improving public health outcomes.

Among other inclusions of initiatives, the summit further reflects a commitment to amplify the “Voice of the Global South” ensuring that developing nations have a significant role in global governance while countering Western dominance. So, as we can see, the Kazan summit’s 32-page outcomes declaration covers almost everything from reforming the UNSC and Bretton Woods institutions to climate change, biodiversity, and conservatives from security issues to economic development, health, education, science and cultural exchange-related issues.

Do you believe BRICS countries have made consistent progress in building a unified strategic agenda to enhance cooperation?

This year marked the beginning of greater BRICS cooperation, which outlined a blueprint for the development of its mechanisms, injected new impetus into a multipolar world, facilitated economic globalization and democratization of international relations, and opened up a new chapter for the solidarity and development of the Global South. And again, the countries in the association are essentially the drivers of global economic growth. So, in the foreseeable future, BRICS will generate the main increase in the global GDP.

As Russia’s President Vladmir Putin said, BRICS countries are now working on organizing the exchange of financial information between central banks. Additionally, amid escalating global trade tensions, the push for decoupling by some Western nations and a growing trend of anti-globalization. In this case, the BRICS members clearly demonstrate their support for an open and inclusive world economy.

In addition to these three core pillars of BRICS, what specific human rights issues are being addressed in efforts to integrate, particularly concerning Africa?

The Russian Presidency was focused on issues related to further strengthening strategic partnership between member states in the field of trade, investment, innovative technologies and social affairs. The common goal is to create conditions for the steady economic growth of all BRICS nations. Moreover, Russia sought to work closely with BRICS partners to deepen cooperation in the field of digital economy, information and communication technologies.

The intention behind the collaboration is an extensive set of goals, which includes efforts to develop digital trade, introduce artificial intelligence, process big data, manage the internet services and help organize technology startups. Among other issues, the Russian Federation reiterates the need for all countries to cooperate in promoting and protecting human rights and fundamental freedoms under the principles of equality and mutual respect.

What role is BRICS playing in food security for its member countries, particularly member states from the African continent?

The plan to create the exchange has been approved by leaders of the BRICS countries. Member states welcomed Russia’s grain exchange plan in their communique at the summit and backed proposals to subsequently develop and expand it to other agricultural sectors. In addition, Russian grain exports to the BRICS countries account for 80 percent of all its supplies. So, the proposed new exchange should have international status to protect it from potential Western sanctions.

Russia, the world’s biggest wheat exporter, has been striving for years to develop its own commodity pricing mechanisms to counter the dominance of Western exchanges, especially following this year’s decline in global grain prices.

The proposed BRICS Grain Exchange could fill a gap in the grain commodities exchange market in the Global South, as there are over forty commodities exchanges worldwide in every continent. These existing exchanges specialize in the trade-of grains or other food commodities, many of which are in Africa and Asia.

Do you think BRICS members will implement trade integration in other sectors?

BRICS presents a collective endeavor towards reshaping the dynamics of global economic development and growth. Since its establishment, the initiative has embarked on several measures to strengthen the political and economic cooperation both within itself and with other emerging economies worldwide. This can be seen in the numerous institutions and mechanisms launched, which aim at providing new alternatives for fostering global sustainable development, infrastructural advancement, and financial stability.

As one of its initiatives, NDB now has USD 32.8 billion in financial capacity, offering financial assistance for infrastructure and sustainable development projects. Not only can these development projects apply in the BRICS nations, but also in other emerging economies. So, complementing these financial instruments, the BRICS Business Council (BBC) and the BRICS Think Tank Council (BTTC) function as platforms of intellectual support, facilitating private sector partnership, and providing policy recommendations in a respective manner. These initiatives underscore the bloc’s commitment to deepening economic ties and intellectual exchange which lay the groundwork for potential macroeconomic policy coordination.

What steps is BRICS taking to reduce member states’ reliance on the US dollar, and what specific actions are underway to encourage the use of local currencies in international trade?

Tangible, albeit gradual, progress on establishing intra-BRICS institutions and processes such as the Interbank Cooperation Mechanism, the cross-border payment system and its independent reinsurance capacity suggest that BRICS’ credibility is growing. These initiatives could enable members to pursue their international economic objectives without the constraints and transactional costs associated with traditional financial bodies like the World Bank and the IMF. Ideally, this would improve their relative positions of global power and influence, and help deliver a more multipolar international order.

A key takeaway from the current BRICS efforts, ahead of the final phase of the Russian Presidency, is the shared commitment to creating alternative payment mechanisms. These include interbank settlements in national currencies and insurance frameworks that won’t directly oppose the post-World War II dollar-centric system. With the dollar increasingly being wielded as a tool of economic leverage, the need for a parallel system has become evident, as no country can assume immunity from potential dollar-related restrictions. Therefore, developing independent settlement systems and payment platforms to mitigate this risk has become a collective priority.

How is it going to work in an efficient manner?

Establishing a unified currency among the BRICS nations is not just an economic issue. It also has significant geopolitical implications. Implementing such a currency could change the allocation of worldwide financial power, challenging the current dominance of traditional economic centers like the US and the EU.

To comprehend this notion, one must analyze the operational mechanisms, necessary international frameworks, and probable ramifications for the global financial system. The implementation of a unified currency would entail crucial components. First and foremost, it would be necessary to establish a synchronization of monetary policies among BRICS nations, encompassing the establishment of uniform interest rates, inflation objectives and exchange rate strategies. In this manner, a governing body, similar to the European Central Bank in the Eurozone, would supervise and execute these policies.

Moreover, the integration of financial policy would be imperative by encompassing the implementation of uniform budgetary regulations and the establishment of procedures for fiscal transfers among member states to tackle economic inequalities. Furthermore, the centralized management of the unified currency issue would be overseen by a central agency, which would regulate its supply in order to ensure price stability.

Ultimately, a key objective would be to eradicate variations in exchange rates across BRICS nations. So, promoting seamless trade and investment activities while diminishing the risks and expenses involved with currency conversion. In this manner, the impact of a unified BRICS currency on the worldwide financial system will likely be substantial.

What would this impact be in terms of technology and digitalization?

The BRICS nations are exploring the options to establish a new reserve currency, leveraging blockchain technology to store and transfer digital tokens, supported by a basket of their respective currencies. This, in turn, would then allow those currencies to be easily and securely exchanged bypassing the need for dollar transactions. Russia sees it as a way to resolve increasing problems in settling trade payments, even with friendly countries such as China, where local banks fear they could be hit by secondary sanctions by the US.

It is also worth noting that the bloc has discussed the potential launch of a Yuan-backed stablecoin as well, which will further streamline cross-border transactions. So, this switch is part of BRICS’ broader strategy which seeks to reduce dependence on the US dollar in international trade as well as bolster economic cooperation among emerging markets.

Finally, what were the key takeaways from the summit’s discussions and bilateral negotiations on the BRICS initiative, particularly between Russia and Ethiopia?

On the sidelines of the summit, Prime Minister Abiy Ahmed held extensive bilateral meetings with President Vladimir Putin. Following their discussions, Abiy expressed his gratitude to President Putin for the substantive dialogue, highlighting the historical ties between Ethiopia and Russia. He also noted that the BRICS platform would enable Ethiopia to expand economic cooperation with Russia and engage more deeply in shared economic initiatives.

BRICS, which stands for Brazil, Russia, India, China, and South Africa, was formed in 2009 as a group of growing economies aiming to work together on economic and political issues. The group started as “BRIC” in 2006 with Brazil, Russia, India, and China, and had its first official summit in 2009.

South Africa joined in 2010, finalizing the current name. In 2023, Ethiopia and five other nations were added as part of an expansion due to increasing global tensions. By 2024, BRICS includes nine member countries, now known as BRICS+.

While BRICS hasn’t yet made a significant impact globally, it holds the potential to reshape global power dynamics, as its member countries represent about 45% of the world’s population and 28% of its GDP.

This potential was a key focus during the 16th BRICS summit in Kazan, Russia, last month, where discussions included topics led by leaders like Prime Minister Abiy Ahmed.

On November 5, 2024, the Russian Embassy in Ethiopia hosted an event to share the outcomes of this summit.

The presentation was led by Evgeny Terekhin, the Russian Ambassador to Ethiopia and Permanent Representative to the African Union. He explained that BRICS operates as a flexible and open platform that allows all members to participate equally in decision-making and to address challenges together.

Terekhin highlighted that BRICS+ provides various opportunities for economic cooperation, focusing on politics, security, finance, and cultural ties. He described the group as a “strong coalition” with a growing population and improving economic and security strength.

He believes Ethiopia’s addition to BRICS+ marks a hopeful new chapter, full of political and economic opportunities, thanks to the country’s fertile land, mineral resources, renewable energy potential, and a burgeoning tech sector.

Abraham Tekle from The Reporter spoke with Terekhin about the significance of Ethiopia’s BRICS membership and prospects for political and economic stability.

EXCERPTS:

The Reporter: Ethiopia recently attended its first BRICS summit at this 16th meeting. What was the main agenda this time?

Evgeny Terekhin (Amb.): The 16^th BRICS summit focused on multilateralism, financial innovation, and alternative payment systems. Leaders criticized unilateral sanctions and stressed the importance of following international law. They also called for reforms in the IMF and World Bank to ensure fair global development and security.

The growth of BRICS signals a shift in global cooperation, promoting the role of developing countries and emerging economies. The initiative focuses on principles such as equality, strategic cooperation, and inclusivity.

Now that Ethiopia is a BRICS member, what achievements do you think were made during the summit?

This was Ethiopia’s first participation since becoming a member in January 2024. The country emphasized the need for reform in the global financial system and pointed out Africa’s need for a place on the UN Security Council.

Led by Prime Minister Abiy Ahmed, Ethiopia’s delegation actively contributed to discussions aimed at promoting a fair global order. Given BRICS’s sizable economic footprint and population representation, Ethiopia wanted to ensure its interests were well represented.

The summit also highlighted Ethiopia’s potential collaborations with other BRICS countries on peace and security matters. It served as a platform to address how global conflicts negatively affect civilians, mentioning threats like cyber-attacks and misinformation.

As a result, nations pledged to strengthen their security capabilities and cooperate with Ethiopia on peace issues.

How might Ethiopia’s BRICS membership affect its economic and political landscape, and the global order?

BRICS is seen as a counterweight to the Western-dominated global order, which many emerging countries believe is outdated and doesn’t serve their interests. The initiative aims to challenge Western dominance in global financial institutions and give the Global South a stronger voice.

Ethiopia’s presence in BRICS, with its significant population and geopolitical relevance, strengthens the coalition and supports its institutional development. As global power dynamics shift, BRICS offers Ethiopia a better chance for loans and economic growth, while also working to counter Western influence.

Could Ethiopia’s BRICS membership lead to new cooperation opportunities?

BRICS allows for equal participation among members in decision-making, addressing issues that previous organizations have struggled with. With nearly half the world’s population and many emerging economies, BRICS presents diverse opportunities for cooperation.

Through BRICS, Ethiopia can access financial assistance and share its agricultural and natural resources. The New Development Bank (NDB) aims to create sustainable opportunities for its member states.

Ethiopia has established strong trade relationships with several BRICS members, including Russia, China, India, and the UAE, and has a vibrant diaspora in South Africa, which enhances these connections.

How do Russia’s relations with Ethiopia and other African countries change with the Kazan declaration?

The summit underscored the need for cooperation among emerging economies and addressed global challenges like unilateral sanctions. It highlighted collective efforts against terrorism and emphasized the use of local currencies to promote economic stability.

The Kazan declaration emphasized partnerships for financial cooperation within BRICS and bringing forward new initiatives to ensure food security and improve public health.

Has BRICS made consistent progress in forming a unified strategic agenda for cooperation?

This year marks an increase in BRICS cooperation aimed at promoting a multipolar world and encouraging sustainable development. BRICS countries are poised to drive significant global economic growth.

What human rights issues are being addressed within BRICS, particularly for Africa?

The focus has been on strengthening partnerships in trade, investment, and social issues among member states to promote economic growth. Cooperation in digital technologies and the protection of human rights is also highlighted.

How is BRICS addressing food security among its members, especially in Africa?

BRICS has approved a plan for a grain exchange that supports agricultural trade and food security, protecting it from Western sanctions.

Will BRICS focus on trade integration in other sectors?

BRICS is committed to enhancing economic cooperation and sustainable development, with institutions like the NDB providing financial support for infrastructure and other projects.

What steps is BRICS taking to reduce reliance on the US dollar in trade?

BRICS is working on creating alternative payment systems and enhancing interbank cooperation to reduce dependence on the US dollar, which has often been used as a tool of economic control.

How will this be implemented effectively?

Creating a unified currency would require aligned monetary policies and financial regulations among BRICS countries, potentially changing the global financial landscape.

What impact could a unified BRICS currency have on technology and digitalization?

BRICS is considering blockchain technology for a new reserve currency, which would facilitate secure and easy exchanges among member currencies, minimizing reliance on the US dollar.

What were the main takeaways from the summit discussions, particularly between Russia and Ethiopia?

At the summit, Prime Minister Abiy Ahmed and President Vladimir Putin held significant talks, emphasizing historical ties and potential for deeper economic cooperation through the BRICS platform.