Impact Of New BRICS Members In The Middle East


The entry of oil producers Saudi Arabia, the UAE, and Iran, along with Egypt, Argentina, and Ethiopia, to BRICS is expected to bring limited near-term economic boost for member countries, according to a report issued by S&P Global Ratings.

“We do not currently forecast any changes to our sovereign ratings from the group’s expansion. We base our view on the experience of the original BRICS group to date, the very different economic structures and financial systems among members, and their lack of political cohesion.

That said, BRICS membership could provide global attention for participants’ agendas, perhaps reduce existing tensions between them, and increase bilateral cooperation,” S&P said, adding that “Few factors unite the members economically or politically, with S&P’s foreign currency sovereign ratings varying from high investment grade to ‘CCC’ among the members. The prospective new members are at varying developmental levels and face different economic challenges as indicated by their GDP per capita, which ranges from US$1,220 in Ethiopia to US$51,456 in the UAE, the report noted.

“The economy of one member state, China, is larger than those of all the other members combined, highlighting potential differences in the power to influence policy within the group.”

If all the newly invited countries join, the bloc would comprise about 30% of the world’s GDP and 45% of its population. Certain other analysts expect the expanded bloc to act as a counterweight to Western influence on global economics and geopolitics.

S&P Global is an American rating agency based in New York. However not everyone agrees with their slightly negative view of the BRICS expansion, with Chris Devonshire-Ellis of Dezan Shira & Associates pointing out that the grouping brings together a free trade zone influenced group that involves 84 countries with a collective GDP of US$83.5 trillion.

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