The idea of linking under one bloc the major emerging economies of Brazil, Russia, India, and China first emerged in 2001, when Goldman Sachs coined the acronym BRICs to describe the potential of the four countries to become a powerful economic bloc in the world economy.[1] In June 2009, Brazil, Russia, India, and China formally emerged as a global market force during the first BRIC summit held in Russia, with South Africa joining the bloc a year later.
In subsequent years, BRICS foreign ministers met to advance the bloc’s policy goals. The momentum to expand the bloc arrived in June 2017, when China proposed more inclusiveness. In September 2017, China proceeded to invite other nations to join the bloc through a “BRICS Plus” cooperation model at the BRICS Summit in Xiamen, and donated reserve funds to the new bloc through the BRICS New Development Bank (NDB), which was formed in July 2014.[2]
The expansion of BRICS promises to substantially increase the bloc’s wealth, which currently contributes to 24% of the world’s total Gross Domestic Product (GDP) output – US$24.44 trillion in 2021 – while holding 16% of world trade and 29.3% of the world’s total land surface.[3] The five new members expected to join the bloc in 2023 are Argentina, Egypt, Iran, Saudi Arabia, and Turkey.[4] BRICS Plus, a framework designed to include new countries in the BRICS dialogue with a view to promoting multilateralism and multiculturalism, also aims to integrate the Gulf region into its evolving global, regional and sub-regional economic structures. Consequently, members of the Gulf Cooperation Council (GCC) – Saudi Arabia, the United Arab Emirates (UAE), Kuwait, Oman, Bahrain and Qatar – have embarked on a new era of ties with the BRICS countries, shaped by a desire to buffer their economies in a conflict-prone world. This need to build alternative global economic, political, and security structures through a BRICS Plus-GCC partnership is expected to encourage collaboration in a host of sectors and promote geopolitical convergence.
Overview of BRICS–GCC relations
The GCC states enjoy a long history of engagement with BRICS countries since at least the global financial crisis of 2008. Before the crisis, the GCC states had benefitted from the prospect of better integration into global markets, aided by a surge in demand for their rich energy markets. Oil and gas windfalls led to budget surpluses that soared to 23% of regional GDP in 2006. Economic growth that had stagnated in previous years reached an estimated 7%, double the 3.5% average for 1990-2002, when the GCC region was relatively isolated from global markets except in the energy sector.[5]
In an effort to rebound from the global financial crisis, the GCC states sought to expand their markets beyond the developed world. The GCC tilt toward new markets in the Global South may have served as an engine for economic growth. High energy outputs enabled the GCC outreach to BRICS in this period, especially to China when it launched the One Belt One Road (OBOR) initiative in 2013. Combined with a Silk Road fund of US$40 billion and additional funding from the Asian Infrastructure Investment Bank, the OBOR initiative ensured the BRICS economies’ energy dependency on the GCC.[6]
The emerging China-GCC market-oriented security partnership expanded to secure stability in the Indian Ocean and in the Gulf waterway, by promising better economic prospects and smoother maritime connectivity to the emerging economies of Africa and Latin America and the Caribbean (LAC). The need for energy security through an evolving China-GCC partnership, along with the growing presence of BRICS countries in local GCC markets, pointed to a mutual desire to widen spheres of influence across continents, and an appetite for larger projects, multilateralism, innovation, private sector growth, and wealth generation.[7]
Emerging landscape of BRICS Plus and GCC relations
China’s drive to expand BRICS membership is geared to increase the country’s global influence in partnership with “node” countries, such as the GCC states. With their strategic locations and valuable resources, these node countries are particularly important in promoting the bloc’s multiple goals and are expected to considerably expand BRICS Plus markets and investment opportunities.[8]
Stability in the Gulf region and beyond is crucial for these node states in order to secure investments and ensure prosperity as they embark on ambitious development plans. Market stability is of particular concern to the GCC states given the financial crunch plaguing the economies of South Africa, Russia and Brazil. This may see BRICS Plus being more inclusive of the interests of the GCC countries, which aim to avoid international conflicts of major scale by maintaining relatively balanced ties with both the East and West.[9]
To this end, the GCC states heeded the call by Chinese President Xi Jinping to avoid ‘go-it-alone trade policies’ and to reject unilateralism on the global stage, especially in face of US tariff threats and trade wars with China as well as US pressures on Saudi Arabia and the UAE to reduce global energy prices. Despite these challenges, bilateral relations between the GCC states and China and other BRICS countries have remained steady and stable.
The GCC preference for investments and partnerships in Western markets may keep them from tilting completely toward BRICS Plus markets in the future, but such a tilt will be unavoidable as the bloc expands its economic and geopolitical influence across continents. Strong inter-BRICS and intra-BRICS Plus partnerships could emerge and encourage the formation of new alliances that revolve around a shared interest for wealth generation and political stability.
In May 2022, a BRICS Plus virtual conference, attended by the UAE, was held to mark a new expansion phase for the bloc in science, technology, innovation, technical and vocational training, and micro and small and medium enterprises. In June, the 14th BRICS Summit hosted a High-Level Dialogue on Global Development to reform the world system and embrace multilateralism and inclusiveness. A subsequent meeting of the financial ministers and central bank governors of BRICS countries issued a joint statement highlighting consensus to deepen financial cooperation at the macro-economic policy level through international partnerships.[10]
The GCC countries’ energy resources and petrochemical markets could fuel the economic engine to expand BRICS, which by mid-2022 represented 40% of the world population.[11] Even in a world reeling from the Covid-19 pandemic, total GCC oil production recovered to pre-pandemic levels, promising to meet world energy demands. The Gulf Petrochemical and Chemicals Association reported US$60-63 billion in chemical revenue in 2021, representing a growth of 15-20% over 2020 – though still 25-30% lower than the pre-pandemic annual average of US$80 billion since 2011.[12] The GCC volume of goods in industrial trade also saw strong growth forecasts in 2020, especially in energy-intensive manufacturing industries, despite the pandemic and strong competition from other countries endeavoring to build similar trade and industrial links.[13]
The past years have seen GCC states steadily increase their engagements in BRICS events and initiatives. In 2021, Qatar participated in a BRICS meeting to explore issue-based international cooperation.[14] Kuwait’s drive to expand its ports and railroad facilities was aimed at connecting to wider markets that BRICS Plus and OBOR represent. Oman, Qatar, Kuwait and Bahrain also sought to maintain ties with both the East and West by investing in partnerships in both geographic blocs. In so doing, they were inadvertently heeding calls from the BRICS International Forum President Purnima Anand for the bloc to access markets through a gradual embrace of new members, new faces, and new resources, based on the complementarities of their respective economies through the natural process of forming a multipolar world.[15]
BRICS Plus regulations, meanwhile, are evolving and could ultimately give node countries significant say in how the bloc expands. While almost all countries in the bloc are battling financial problems as well as the cost of the pandemic, the admission of new members including Saudi Arabia could create a new power bloc that unites in questioning the existing global system dominated by the West while offering “alternatives to Western-dominated constructs.”[16]
BRICS Plus-GCC economic and social partnerships
The GCC economies are projected to expand by 5.9% or even 7.5% in 2022, with the UAE’s economy forecast to increase by 4.7% and Saudi Arabia’s by 7%.[17] In 2021, Saudi Arabia – a member of the intergovernmental forum of the Group of Twenty (G20) – had a real GDP of US$692.3 billion while the UAE’s GDP reached US$640 billion.[18]
This growth spurt has led to ambitious social and political programs to help integrate the GCC region into global markets, including the BRICS Plus economies. According to Goldman Sachs, even prior to its expansion, the BRICS economies were expected to compete with the economies of the richest countries in the world by 2050.[19] This forecast offered a strong incentive for GCC investments in the bloc.
With the projected oil revenue growth through OPEC Plus – which consists of members of the Organization of Petroleum Exporting Countries (OPEC) and major non-OPEC oil exporting countries – the GCC could mobilize additional financial resources to introduce projects that can help the Gulf region integrate into BRICS Plus private-sector markets. The GCC is meanwhile embarking on privatization programs of its own, to gradually shift jobs away from the public sector to better protect against future energy market price volatilities.[20]
Aiming to build efficient mechanisms to support trade and financial cooperation, the GCC is also building collaborative dialogue through the Shanghai Cooperation Organization, another economic and security initiative led by Russia and China since 2001, in which Qatar and Saudi Arabia are dialogue partners. Bahrain, Kuwait and the UAE also applied to upgrade their status to dialogue partner and were recently accepted.[21]
The Gulf region’s potential for integration into the Asian and the Global South markets remains huge. Not surprisingly, as early as 2019, Brazil welcomed a BRICS-style bloc with the Gulf, expressing interest in developing new market opportunities in the region.[22]
In 2021, NDB admitted the UAE as a member. NDB was established as a platform for fostering cooperation in infrastructure and sustainable development. By mid-year, NDB had launched 80 projects worth US$30 billion in sectors such as transport, water resource management, clean energy, and digital and social infrastructure.[23]
In a BRICS Plus meeting in May 2022, foreign ministers and representatives, including UAE State Minister Ahmed Al Sayegh, discussed BRICS expansion and giving priority to Saudi Arabia as a member of the G20.[24] Saudi Arabia, along with Turkey and Egypt, expressed interest in joining BRICS Plus as a means to expanding opportunities and platforms for trade and investments, and to address challenges such as technological gaps to advance their economies. This expansion of the BRICS grouping further aims to boost investment in energy markets, and potentially even replace the dollar with local currencies, at least for some transactions.
Even though the geographical trade costs for some members of BRICS Plus and the dominance of the Chinese Yuan could impede trade integration with the GCC, mutual investments and their impact on global markets will ensure cooperation between the two sides. The heavy influence of BRICS Plus and GCC countries over World Trade Organization policies and on international and regional affairs is also expected to advance the goals of the July 2014 Fortaleza Declaration of the 6th BRICS Summit, which stressed inclusive macroeconomic and social growth and sustainable solutions.[25]
Not surprisingly, BRICS Plus aims to craft new collaborative blocs. The Beijing Declaration of the 14th BRICS Summit focused on the emerging markets in the developing world, including the GCC region, with a view to achieving global financial strength in addition to promoting financial and policy reforms and institutional development.[26]
Shared economic decisions are hard to make in a bloc that is continually expanding to include more countries with diverse backgrounds and ideologies.[27] But the cautious approach that the GCC has taken in gradually embracing the BRICS Plus market potential speaks of a desire by the Gulf states to retain considerable say and influence in the bloc, backed by their wealth of experience in managing energy markets.
BRICS Plus may consequently empower the GCC countries to better navigate their interests, especially given their relations with the Group of Seven (G7) bloc, a grouping comprised of the world’s most advanced economies that had a combined GDP of US$33.93 trillion in 2021.[28] Increasingly dissatisfied by the G7’s efforts to lower energy prices for the developed world, a number of GCC countries, including Saudi Arabia and the UAE, have opted instead to ensure higher oil prices to boost their economies and have worked with the energy-intensive BRICS markets to ensure demand for GCC energy resources. This course of action enabled the two Gulf states to reject pressures by the United States to lower prices – although Washington tapped into US energy reserves to lower energy prices at home.
Additionally, BRICS Plus is expected to play an important role in e-commerce development, expansion of internet access to users across the Gulf and Asian markets, expansion of online training opportunities, greater connectivity and market penetration potential, and cross-border exchanges leading to wider market integration.[29] To this end, an innovation center in China was launched to serve as a bridge for expanded cooperation in these areas among BRICS Plus members.[30]
Finally, a BRICS Plus-GCC partnership is expected to build social capital as a tool for accelerated economic growth. A main driver of BRICS expansion, China is shifting its export-driven economy to one that relies on domestic consumption. The GCC countries are also keen to improve domestic consumption patterns and boost privatization to increase GDP – goals that India, South Africa and Brazil aspire to achieve as well in order to reduce poverty and ensure social progress, which are key factors of a nation’s economic prosperity and stability.[31]
BRICS Plus-GCC geopolitics
In 2022, the High-level BRICS Dialogue on Global Development engaged 13 emerging markets to work on building alternative economic and geo-strategic models to the G7 bloc, and to reject US-led unilateral policies. This process of offering alternatives to the G7 bloc, however, was challenging because of growing rifts between the Western countries led by the United States and China and Russia.
The growing rifts between these major powers is expected to challenge US-Russia relations as well as US-GCC ties. Following the outbreak of the war between Russia and Ukraine in February 2022, for example, BRICS members and GCC countries were concerned about US efforts to encourage them to take sides, despite GCC attempts to mediate an end to the conflict. The US-China trade tensions will accelerate the expansion of BRICS Plus and may well deepen the rifts between Washington and its GCC partners, which bring considerable wealth into the new bloc.[32] The gradual fragmentation of the existing global order and bipolar governance structures that rest on balanced ties between the US and Russia, and the US and China, could also weaken the G20 and accelerate the robustness of BRICS Plus.
BRICS Plus dynamics involve other potential conflictual scenarios, too, as a result of Iran’s attempts to integrate its sanctioned economy into the bloc. While observing the US-led sanctions regime against Iran, despite Iran actively integrating its economic and investment interests with Asian countries, the GCC has opted to remain neutral in conflicts between the major powers over the outcome of the Iranian nuclear program. Despite the Iranian nuclear crisis, the UAE and Saudi Arabia have focused on facilitating trade and investment opportunities with Asia, thereby offering better prospects for a speedier integration with the BRICS Plus economies.
Meanwhile, India is seeking to promote a joint BRICS-Gulf security dialogue. Improved prospects for trade and security cooperation could pave the way for stronger networks between BRICS Plus and the GCC. The BRICS Contingent Reserve Arrangement, a framework for the provision of liquidity and precautionary instruments during crises, along with other modes of investments, could buffer the BRICS Plus-GCC economies in the face of global tensions. Furthermore, the BRICS-GCC security dialogue could expand nuclear cooperation between them and better address the challenge of the Iranian nuclear program, mindful that three of the BRICS countries are nuclear states capable of deterring potential Iranian nuclear threats.
Ultimately, the GCC states aim to ensure the stability of the global economy amidst international tensions and conflicts.[33] The July 2022 summit of the North Atlantic Treaty Organization – during which Russia’s war in Ukraine was condemned – was an opportunity for the GCC countries to engage Moscow in a so-called Global South security dialogue that BRICS Plus aims to promote. In addition, GCC engagement with the Global South through other forums including the Organization of Islamic Cooperation, the United Nations, and the Asian Development Bank promises to increase the body’s influence over BRICS Plus security forums.[34]
While a full convergence of foreign policy goals is unlikely to happen in the BRICS Plus-GCC partnership, both sides appear keen to avoid taking political positions on major issues that might escalate tensions between them. By opting to remain neutral – at least in their public policy declarations on major issues involving the conflicts between the US and China and the US and Russia – the GCC also aims to deescalate international security tensions when it can, in a manner that better contributes to peace.
Conclusion
Although the potential for growth in the BRICS Plus-GCC partnership is too early to assess in terms of actual numbers and figures, the member states representing both sides already enjoy strong bilateral economic ties. Areas of divergence and convergence between BRICS Plus and GCC abound, but ensuring impressive economic growth is at the heart of their partnership, and hence the UAE’s desire to work with NDB and Saudi Arabia’s membership drive in BRICS Plus.
The idea of a strong BRICS Plus-GCC partnership is rapidly evolving and remains relevant, despite the fact that the BRICS Plus bloc has yet to articulate clear policy guidelines moving forward and consolidate its governance structures. But while the emerging markets of the Global South vary in strength when it comes to integrating into the BRICS Plus economies, the stronger energy-driven economies of the GCC states means they will remain steady partners for the bloc and be able to shape its governance frameworks. Consequently, new transnational trade, governance, political and security structures will emerge, and while not yet deeply studied, may contribute to new and emerging orders in the Gulf region, dominated by a collective desire for market stability, security, and reduced Western economic influence in the region.
Whether a new BRICS Plus-GCC partnership leads to improved global economic prospects is an open debate. But this post-Washington Consensus initiative aims to push aside harsh financial prescriptions for the developing world – espoused by the West through international institutions based in the West such as the World Bank and the International Monetary Fund – by embracing diverse alliances to pool the financial resources of the mighty countries of the Global South.[35] The Washington Consensus, a concept that first emerged in the 1980s to safeguard capitalism and thereby ensure a level of Western control over global economic markets, is therefore challenged if BRICS Plus-GCC ties avoid the pitfalls of the West’s capitalist-driven strict policy prescriptions that failed to contain the macroeconomic turbulence and debt crisis of the developing world.[36]
References
[1] Jim O’Neill, “Building Better Global Economic BRICs,” Global Economics Paper No: 66, Goldman Sachs, November 30, 2001, https://www.goldmansachs.com/insights/archive/archive-pdfs/build-better-brics.pdf.
[2] Nian Peng, “Great Power Conflict Fuels BRICS Expansion Push,” The Diplomat, July 13, 2022, https://thediplomat.com/2022/07/great-power-conflict-fuels-brics-expansion-push/.
[3] Aaron O’Neill, “Gross Domestic Product (GDP) of the BRICS Countries from 2000 to 2027,” Statista, July 27, 2022, http://bitly.ws/wkDU; “Evolution of BRICS,” BRICS India 2021, https://brics2021.gov.in/about-brics.
[4] Andrej Pavicevic, “BRICS Expansion: Five New Members in 2023?” Impakter, July 18, 2022, https://impakter.com/brics-expansion-five-new-members-in-2023/.
[5] “The GCC Dream: Between the BRICs and the Developed World,” Goldman Sachs, April 2007, https://www.goldmansachs.com/insights/archive/archive-pdfs/brics-book/brics-chap-14.pdf.
[6] For more on GCC-BRICS relations, see Tim Niblock, Degang Sun, and Alejandra Galindo, eds., The Arab States of the Gulf and BRICS: New Strategic Partnerships in Politics and Economics (Berlin: Gerlach Press, 2016).
[7] Ibid.
[8] Peng, “Great Power Conflict Fuels BRICS Expansion Push.”
[9] Ronak Gopaldas, “More BRICS in the Wall?” Institute for Security Studies, August 8, 2022, https://issafrica.org/iss-today/more-brics-in-the-wall.
[10] “BRICS Countries Vow to Deepen Financial Cooperation,” Times of Oman, June 7, 2022, https://timesofoman.com/article/117648-brics-countries-vow-to-deepen-financial-cooperation.
[11] Shahid Hussain, “Can BRICS Plus Offer Better Platform to Developing Nations?” Korea Times, July 4, 2022, https://www.koreatimes.co.kr/www/opinion/2022/10/162_331992.html?utm_source=KK.
[12] “GCC Dangerous Goods Logistics Market 2022-2027,” Research and Markets, April 18, 2022, https://www.yahoo.com/now/gcc-dangerous-goods-logistics-market-122600295.html.
[13] The Economist, The GCC in 2020: Outlook for the Gulf and the Global Economy, Economist Intelligence Unit, March 2009, https://graphics.eiu.com/marketing/pdf/Gulf2020.pdf.
[14] Qatar Ministry of Foreign Affairs, “Qatar’s Ambassador Participates in a Meeting of Representatives of the BRICS Member States,” April 18, 2021, http://bitly.ws/wkF6.
[15] “Head of the BRICS Forum: Three More Countries Expressed Their Intention to Become Members of the Association,” Top War, July 14, 2022, https://en.topwar.ru/199018-glava-foruma-briks-esche-tri-strany-vyrazili-namerenie-stat-chlenami-obedinenija.html.
[16] Gopaldas, “More BRICS in the Wall?”
[17] The World Bank, “GCC Economies to Expand by 5.9% in 2022,” May 23, 2022, https://www.worldbank.org/en/news/press-release/2022/05/23/-gcc-economies-to-expand-by-5-9-in-2022; Raul Redondo, “Saudi Arabia’s GDP Will Rise at Highest Rate in 10 Years in 2022, Says S&P,” Atalayar, September 19, 2022, https://atalayar.com/en/content/saudi-arabias-gdp-will-rise-highest-rate-10-years-2022-says-sp.
[18] Global Data, “Real GDP of Saudi Arabia (2010-2021, $ Billion),” June 2022, https://www.globaldata.com/data-insights/macroeconomic/real-gdp-of-saudi-arabia-2089214/; World Economics, “United Arab Emirates’s Gross Domestic Product (GDP),” https://www.worldeconomics.com/Country-Size/united%20arab%20emirates.aspx.
[19] “Saudi Arabia Interested in Joining BRICS Group, South Africa President Says,” Middle East Monitor, October 19, 2022, https://www.middleeastmonitor.com/20221019-saudi-arabia-interested-in-joining-brics-group-south-africa-president-says/.
[20] The World Bank, “GCC Returns to Growth Amid High Oil Prices and Strong Responses to COVID-19 but Large Wage Bills Threaten Its Economies,” December 2, 2021, http://bitly.ws/wkGw.
[21] Zongyuan Zoe Liu, “China Is Quietly Trying to Dethrone the Dollar,” Foreign Policy, September 21, 2022, https://foreignpolicy.com/2022/09/21/china-yuan-us-dollar-sco-currency/.
[22] Sam Bridge, “Brazil ‘Open’ to Brics-Style Bloc with Gulf States,” Arabian Business, August 5, 2019, https://www.arabianbusiness.com/politics-economics/425346-brazil-open-to-brics-syle-bloc-with-gulf-states.
[23] “BRICS Development Bank Admits UAE, Bangladesh, Uruguay as New Members,” The Economic Times, September 2, 2021, https://economictimes.indiatimes.com/news/international/business/brics-development-bank-admits-uae-bangladesh-uruguay-as-new-members/articleshow/85863179.cms.
[24] “Foreign Ministers Hold BRICS Plus Expansion Discussions,” Silk Road Briefing, May 23, 2022, https://www.silkroadbriefing.com/news/2022/05/23/foreign-ministers-hold-brics-plus-expansion-discussions/; UAE Ministry of Foreign Affairs & International Cooperation, “UAE Participated in Virtual BRICS Plus Conference with Foreign Ministers,” May 23, 2022, https://www.mofaic.gov.ae/en/mediahub/news/2022/5/23/23-05-2022-uae-meeting.
[25] “The 6th BRICS Summit: Fortaleza Declaration,” University of Toronto – BRICS Information Center, July 15, 2014, http://www.brics.utoronto.ca/docs/140715-leaders.html.
[26] “China Has Urged the West to Read the New 14th BRICS Summit Declaration Carefully. This Is What It Says,” Silk Road Briefing, June 28, 2023, http://bitly.ws/wkHq.
[27] Mohammed Nuruzzaman, “Why BRICS Is No Threat to the Post-War Liberal Order,” Journal of International Studies 57, no. 1 (2022): pp. 51-66, https://journals.sagepub.com/doi/pdf/10.1177/0020881719884449.
[28] Nation Master, “Group of 7 Countries (G7): Statistical Profile,” https://www.nationmaster.com/country-info/groups/Group-of-7-countries-(G7).
[29] United Nations Industrial Development Organization (UNIDO) and Shanghai Academy of Social Sciences (SASS), BRICS Plus E-Commerce Development Report In 2018, https://www.unido.org/sites/default/files/files/2019-10/BRICS_Plus_E-Commerce_Development_Report_in_2018.pdf.
[30] “Innovation Center in E China Becomes Bridgehead for BRICS Cooperation,” Xinhua, September 10, 2022, https://english.news.cn/20220910/5e55c80f036f4ad197b387814a47cb19/c.html.
[31] See Mark Esposito, Amit Kapoor, and Deepti Mathur, “What Is the State of the BRICS Economies?” World Economic Forum, April 19, 2016, https://www.weforum.org/agenda/2016/04/what-is-the-state-of-the-brics-economies/.
[32] Gopaldas, “More BRICS in the Wall?”
[33] “Algeria and Argentina… ‘Two New Babies’? Towards ‘BRICS Group’ What is the Reason?” Al-Ain, August 27, 2022, https://al-ain.com/article/algeria-and-argentina-brics-group-what-reason.
[34] Mohamed Taifouri, “BRICS: The Ukraine War Is Fragmenting the Global Economy,” Al-Eqtesad, July 31, 2022, https://www.aleqt.com/2022/07/31/article_2363476.html.
[35] Pavicevic, “BRICS Expansion: Five New Members in 2023?”
[36] For a list of policies designed through the Washington Consensus, see Douglas A. Irwin and Oliver Ward, “What Is the ‘Washington Consensus?’” Peterson Institute for International Economics, September 8, 2021, https://www.piie.com/blogs/realtime-economic-issues-watch/what-washington-consensus.
