Unlocking economic growth and Strategic Advantages: Potential benefits for Sri Lanka from BRICS

• The expansion of the BRICS coalition to include Iran, Egypt, Ethiopia, and the United Arab Emirates on 1st January 2024 marks a significant milestone in its evolution
• The recent inclusion of Iran, Saudi Arabia, and the UAE expands BRICS’ collective population to around 3.5 billion people
• BRICS wants to see a “greater voice and representation” for emerging economies
• The BRICS summit in Yekaterinburg holds particular significance as the birthplace of the coalition’s formalization. This city’s status as a cultural and industrial hub underscores the BRICS’ commitment to fostering cooperation across various sectors, from trade and investment to technology and innovation

BRICS is an acronym representing a coalition of the world’s prominent Emerging market economies: Brazil, Russia, India, China, and South Africa.

In 2006, Brazil, Russia, India and China created the “Bric” group. Subsequently South Africa joined in making it “Brics”. The inaugural summit of the BRICS was held on 16 June 2009 in Yekaterinburg, Russia. This summit with its expanded membership signaled a renewed commitment to the principles of the cooperation and mutual benefit that have defined the coalition since then. The inclusion of these new member states strengthens the coalition’s collective voice in advocating for reforms in global economic governance and promoting a more equitable international order. The BRICS summit in Yekaterinburg holds particular significance as the birthplace of the coalition’s formalization. This city’s status as a cultural and industrial hub underscores the BRICS’ commitment to fostering cooperation across various sectors, from trade and investment to technology and innovation. The 1st BRIC Summit was attended by Dmitry Medvedev (Russia), Lula da Silva (Brazil), Manmohan Singh (India) and Hu Jintao (China).

Expansion of the BRICS

The expansion of the BRICS coalition to include Iran, Egypt, Ethiopia, and the United Arab Emirates on 1st January 2024 marks a significant milestone in its evolution. This enlargement underscores the growing influence and appeal of the coalition beyond its original founding members. With these new additions, the BRICS alliance now represents a more diverse array of geopolitical interests and regional perspectives.
The BRICS alliance’s emphasis on non-interference, equality, and respect for sovereignty resonates strongly with the aspirations of many countries in the Global South, particularly in Latin America and Africa. By providing a platform for political, economic, and cultural exchanges, BRICS offers the regions an alternative avenue for cooperation and development that is not beholden to Western hegemony.

Influence in global economic and political landscape

As the BRICS alliance matured and expanded, its role in shaping the global economic and political landscape became increasingly significant. By fostering deeper cooperation and solidarity among member states, BRICS presented a compelling vision for a more multipolar world order grounded in principles of mutual respect, equality, and shared prosperity.

Together, the BRICS nations span approximately 30% of the world’s land surface and are home to 45% of the global population. Brazil, Russia, India, and China rank among the top ten largest countries in terms of population, territorial expanse, and gross domestic product (GDP) both in nominal and purchasing power parity (PPP) terms. The recent inclusion of Iran, Saudi Arabia, and the UAE expands BRICS’ collective population to around 3.5 billion people, representing 45% of the world’s inhabitants, with economies collectively valued at over $28.5 trillion, or roughly 28% of the global economy.
Among the BRICS nations, China leads with the largest GDP, reaching $16.86 trillion U.S. dollars in 2021, while the others maintain substantial economic clout, notwithstanding below the three-trillion-dollar mark individually. Collectively, the BRICS bloc boasted a GDP exceeding $25.85 trillion U.S. dollars in 2022, slightly surpassing that of the United
States. Additionally, these nations jointly produce approximately 44% of the world’s crude oil. 
BRICS’ ambitions extend beyond economic cooperation to challenge the dominance of the US dollar in global trade. While aspirations to de dollarize the global economy persist within BRICS, the likelihood of fully replacing the US dollar remains uncertain. However, if successful, the introduction of a new BRICS currency could potentially weaken US sanctions and diminish the dollar’s dominance, though experts debate the feasibility and consequences of such a shift. BRICS wants to see a “greater voice and representation” for emerging economies. In 2014, the BRICS nations set up the New Development Bank to lend money to boost infrastructure.
After Russia invaded Ukraine in 2022, many BRICS indexes dropped Russia from their portfolios, and Russia-specific ETFs were delisted from American exchanges. An exchange-traded fund (ETF) is a pooled investment security that can be bought and sold like an individual stock. ETFs can be designed to track specific investment strategies and are available to investors for various purposes, including income generation, speculation, price appreciation, and risk management. “The sanctions against Russia and China over the last 18 months have acted as a catalyst,” said Christopher Weafer, the CEO of business consultancy Macro-Advisory Ltd. He noted that both Moscow and Beijing are now trying to reduce their reliance on Western economies, having seen the consequences of economic penalties firsthand.

Sri Lanka’s intention to join BRICS

On 21 May 2024 in an interview with news agency ANI, Sri Lanka’s Foreign Minister Ali Sabry stated that the country wishes to join BRICS this year. Foreign Minister Sabry added that Sri Lanka has been keen to join the global bloc and plans on reaching out to India for assistance in its membership bid. “We will look forward to BRICS. Also, I think the cabinet had appointed a sub-committee to look into that and recommend to us. We would like to see that because we would like to have multiple options. Who doesn’t want to?
So therefore BRICS is a good body, particularly since India is a part of it,” Sabry told ANI. https://youtu.be/bS7vZWSUCWs?si=8n8iC4TmCwl-jt4Y
Sri Lanka is among about 30 countries expressing interest in joining BRICS this year. Pakistan has also applied for membership, seeking support from Russia and China. Of the 30 interested countries, 15 have formally applied, including Algeria, Bahrain, Bangladesh, Belarus, Bolivia, Cuba, Kazakhstan, Kuwait, Pakistan, Palestine, Senegal, Thailand, Venezuela, Vietnam, and Nigeria.

Promising new opportunities for Sri Lanka

Analysts foresee substantial benefits for Sri Lanka upon joining BRICS, anticipating positive impacts on its economy, infrastructure development, and geopolitical positioning. Access to duty-free trade and financial support from BRICS development funds holds the promise of elevating living standards and tackling pressing economic challenges within. Moreover, Sri Lanka’s strategic location at the nexus of major maritime trade routes positions it as an attractive destination for investment in infrastructure projects, potentially propelling it into a regional trade and technology hub.

The expansion of aviation and maritime facilities, alongside investments in local infrastructure by BRICS member states, stands to bolster Sri Lanka’s connectivity and appeal to multinational corporations seeking access to emerging markets. This concerted effort could catalyze the diversification of Sri Lanka’s industries beyond its reliance on tourism, empowering it to emerge as a vibrant participant in the global economy.
Moreover, joining BRICS could help Sri Lanka navigate the geopolitical tensions between China and India, leveraging its relationships with both countries while benefiting from the support of the entire BRICS community. By fostering a more balanced and conflict-free regional environment, Sri Lanka could pursue its economic and strategic interests more effectively within the framework of the coalition.

Circumnavigating the complexities

However, it’s essential to acknowledge both the praise and criticism surrounding BRICS. While supporters commend its efforts to promote global economic equity and cooperation among emerging economies, critics raise concerns about internal disparities and conflicting interests among member states. Additionally, questions about certain BRICS countries’ records on democracy and human rights underscore the need for the coalition to uphold its stated principles of equality and mutual benefit. Overall, BRICS remains a significant and influential player in the global arena, with its actions and decisions closely watched by both proponents and critics. The group’s ability to navigate internal and external challenges will be crucial in determining its future impact on the world stage.

In conclusion, on observant reflection BRICS presents promising opportunities for Sri Lanka and other member states, its ability to address internal challenges and uphold its principles will determine its long-term impact globally. By circumnavigating these complexities, BRICS can continue to play a significant role in shaping the future of global economic governance and cooperation.
The writer has demonstrated a commitment to thoroughness by diligently integrating open-source information into this narrative. Also commendably recognize and value the personal insights shared within the discourse. In today’s intricate and constantly evolving global and regional landscape, it is crucial to comprehend the ongoing dynamics fully. Simply with such understanding effective strategies could be developed and executed to navigate the complexities of our world.
(The writer is a Director Strategic Development WKV Group, Senior Fellow South Asia Foresight Network, President Association of Retired Flag Rank Officers, Formerly Commander Sri Lanka Air Force and Sri Lankan Ambassador to Afghanistan)