Ethiopia & BRICS: Implications and Opportunities

إثيوبيا ومجموعة BRICS: التّداعيات والفرص

  د. إبراهيم سرورDr.Ibrahim Srour^([1])

Abstract

This article is about Ethiopia’s entry to the BRICS. It discusses the implications and the opportunities in this respect. The article also presents the three pillars of BRICS which are politics and security, finance and economy, as well as culture and people-to-people. In addition, the article presents the process required of Ethiopia in order to be a member of the BRICS, highlights the reasons for Ethiopia joining the BRICS, and details the opportunities and implications in this matter.

Keywords:  Ethiopia, BRICS, membership, opportunities, implications

ملخص

هذا المقال هو عن انضمام إثيوبيا إلى البريكس إذ يناقش الآثار والفرص في هذا الصدد. ويعرض المقال أيضًا الركائز الثلاث التي تقوم عليها البريكس وهي السياسة والأمن، والمالية والاقتصاد، بالإضافة إلى الثقافة والتواصل بين الناس. بالإضافة إلى ذلك، يعرض المقال العملية المطلوبة من إثيوبيا لكي تكون عضوًا في البريكس، ويسلط الضوء على أسباب انضمام إثيوبيا إلى البريكس، ويشرح بالتفصيل الفرص والتداعيات في هذا الشأن.

الكلمات المفتاحية: إثيوبيا، البريكس، العضوية، الفرص، الآثار

Background

BRICS is a partnership of Brazil, Russian Federation, India, China, and South Africa with strong bonds of friendship, solidarity, and mutual interests. BRICS represents over 42% of the global population, 30% of the world’s territory, 23% of GDP and 18% of international trade. Formalized in 2006, the first BRIC Foreign Ministers’ Meeting was held during the United Nations General Assembly. The inaugural BRIC Summit occurred in Yekaterinburg, Russia, in 2009. South Africa joined BRICS in 2010 and attended the Third Summit in Sanya, China, in 2011.

BRICS and its Three Pillars of Cooperation

1. Political and Security

The BRICS group advocates for inclusive multilateralism. A restructured global architecture reflecting the contemporary world and promoting equity, balance, and representation is the shared vision of BRICS, with a reform of the UN at its core. BRICS outlined its vision for reform of the international system in its 2021 Joint Statement on Strengthening and Reforming the Multilateral System, emphasizing inclusivity and representation. BRICS leaders, foreign ministers, and national security advisors convene regularly to coordinate the BRICS position in respective areas. BRICS cooperation is built on mutual respect, sovereign equality, inclusiveness, consensus, and strengthened collaboration.

2. Finance and Economy

The Financial and Economic Cooperation pillar involves Ministers of Trade, Industry, Agriculture, and Energy meetings. The Contact Group for Economic and Trade Issues supports ministers by proposing institutional frameworks and measures to enhance economic and trade cooperation among BRICS countries. The BRICS Economic Partnership Strategy strives to improve economic cooperation by promoting trade and investment, creating a friendly business environment, and diversifying cooperation.

The New Development Bank (NDB) was founded in 2015 to provide financial support to emerging markets and developing countries and to bridge infrastructure gaps while promoting sustainable development and equity. NDB Africa Regional Centre is in Johannesburg. In 2021, the NDB added Bangladesh, Egypt, UAE, and Uruguay as new members, solidifying its position as a top financing option for emerging markets and developing countries.

3. Culture and People-to People

Cooperation among BRICS nations in education has facilitated the exchange of information and improved understanding of member states’ educational systems. BRICS Universities established the Network of BRICS Education Cooperation in 2018. People-to-people cooperation manifests through art, film, cultural exchanges, recovery of the tourism sector, investment and trade as well as more opportunities for businesspeople, researchers, and students.

Ethiopia’s BRICS Membership Process

After holding dozens of successful meetings and summits in the last decade, increasing the economic status and leading trade capabilities of BRICS, Ethiopia’s interest in accompanying or participating in BRICS Plus has increased. Addis Ababa participated in BRICS meetings and summits in 2022 and 2023, hosted by China and South Africa. Ethiopia submitted an official request to join BRICS in 2023 when H.E. Prime Minister Abiy Ahmed sent a letter to the President of South Africa, H.E. Cyril Ramaphosa, the current chairperson of BRICS. H.E. Ato Demeke Mekonnnen, Deputy Prime Minister and Foreign Minister, sent letters to foreign ministers of BRICS countries requesting their support. H.E. Ato Demeke also met all the foreign ministers of BRICS to solicit support for Ethiopia’s admittance into BRICS.

On 24 August 2023, in the 15th BRICS meeting held in South Africa under the theme of “BRICS and Africa: Partnership for Mutually Accelerated Growth, Sustainable Development, and Inclusive Multilateralism,” Ethiopia, United Arab Emirates, Argentina, Iran, Saudi Arabia, and Egypt were invited to become full members from 1 January 2024.

Why Did Ethiopia Join BRICS?

Ethiopia highly appreciates the strong leadership and commitment of BRICS to building partnerships with Africa in trade, investment, and infrastructure development since BRICS provides a vital platform for developing countries’ interests and voices. As such, Ethiopia supports its aspirations to create a more inclusive and balanced international system where it values multilateralism. It also has a rich history of contributions to global peace and security. Accordingly, BRICS’s membership will enable it to enhance its contributions to multilateralism.

Ethiopia shares historical, political, economic, and personal ties with BRICS countries. This unique position can elevate existing partnerships to pursue joint development paths based on solidarity, friendship, and mutual respect. In addition, Ethiopia is the second most populous country and one of the biggest countries in Africa. Ethiopia is Africa’s sixth largest economy. Its predominantly youth population is an asset for cooperation through driving innovations and consumption. Ethiopia is registering the high economic growth in Africa and thus, the BRICS membership will help sustain this high growth rate.

Ethiopia is also a member of the Common Market for East & South Africa (COMESA) which includes Burundi, Comoros, the DR Congo, Djibouti, Egypt, Eswatini, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Tunisia, Uganda, Zambia and Zimbabwe.

Addis Ababa’s good relations with major BRICS members, large population, history, high growth rate, overall GDP growth, and favorable development prospects make Ethiopia a future development player within the group and it has cemented BRICS position within North-East Africa. This has additional implications for the Middle East and a future expansion of the trade network into Africa. As Saudi Arabia and the United Arab Emirates are already included in the group, this means strengthened coordination between the horn of Africa and the Middle East.

Furthermore, Ethiopia is a member of the African Continental Free Trade Agreement (AfCFTA) which includes all African nations (with the exception of Eritrea). This agreement is phasing in reductions on all intra-African trade on 95% of all products in various stages over the coming 12 years. This eliminates tariffs for pan-African sourcing, and when combined with manufacturing in Ethiopian free trade zones, it significantly enhances Ethiopia’s potential as an export manufacturing driven economy. COMESA’s population is about 640 million, while its total GDP (PPP) is about US$918 billion. The average GDP per capita (PPP) varies amongst members but averages out at US$5,173.

Ethiopia & BRICS: Implications and Opportunities

Ethiopia, with a population of around 120 million people, is landlocked in the Horn of Africa. Ethiopia’s economy has experienced strong growth over the past 15 years averaging about 10% per annum. Meanwhile, its economy has been one of the fastest growing in the world, with a 2023 anticipated GDP growth rate of 7.5%, a GDP (PPP) of US$290 billion and a per capita GDP (PPP) of US$2,519. The government has been able to reduce the inflation rate and the ratio of debt relative to the GDP. Ethiopia will be considered as an official member of BRICS starting January 2024, with the Ethiopian Prime Minister Abiy Ahmed describing this as a “great moment” for the country. For Addis Ababa, membership in BRICS is a significant geo-economic, geo-political, and diplomatic victory. With about 26% of the area, and about 42% of the world’s population, BRICS has an increasing role in global geopolitics and trade.

Together with an increase in production and exports since the end of the COVID pandemic, an increase in exports, marred by the Ukraine conflict interrupting Ethiopian barley and wheat imports, combined with a 50% reduction in imported rice in the agricultural sector, BRICS membership empowers Ethiopia to deal with the severe food insecurity in the country. In fact, its government has galvanized and changed the direction of the wind in order to produce and export wheat and other cereals by introducing modern agricultural mechanisms to minimize the effect of small farmer holdings. The use of advanced agricultural technologies and knowledge from BRICS countries can also be useful in modernizing the country’s agricultural sector, with Russian grain and fertilizers poised to assist in this domain. It is noteworthy to mention that Ethiopia has seen continued privatization, increased exports, increased remittances, and increased foreign direct investment. However, Ethiopia alone cannot achieve its ambitious goals of building more than 100 dams in different regions, and become Africa’s largest electricity power, unless it can benefit from the support of major actors such as BRICS.

Addis Ababa is also trying to attract international and regional investors to energy projects. According to the approach of the BRICS New Development Bank (NDB), Ethiopia’s future participation will lead to the bank’s financial and technical assistance and the granting of soft loans without the more stringent conditions typically imposed by the IMF. Considering Ethiopia’s limited foreign reserves and foreign currency inflows, budgeting for sustainable development goals is supposed to be compensated through obtaining foreign loans. Therefore, the presence in BRICS can be an opportunity for the development of trade with emerging economies, faster economic growth, opening new markets, signing new trade agreements, and foreign direct investment (FDI) for Addis Ababa. Given Ethiopia’s growth model based on infrastructure investment, the public investment by BRICS members will stimulate economic growth in 2024-27. Through membership in BRICS, Ethiopia wants to increase trade with domestic, on-US Dollar currencies, minimize costs, and develop ecommerce.

BRICS can practically contribute to the government’s 10-year development plan for domestic economic reforms and help Ethiopia create a more inclusive and sustainable growth path. The positive effects of BRICS membership can help Ethiopia benefit from the experience of the BRICS members in economic reforms, increase the volume of production, stimulate Ethiopian exports, create macro-economic changes, and provide access to a completely healthy economy. Hence, BRICS assistance in achieving Ethiopia’s development goals and prospects, improving and increasing tourists from the main and new BRICS countries will be part of other effects of joining the BRICS.

The official joining of Ethiopia in the BRICS group will increase the position of the country’s economic power in the Horn of Africa and accelerate the implementation of the 2063 African Development Agenda as well as the goals of the African Continental Free Trade Agreement (AfCFTA). Ethiopia is the land of origins of ancient and wealthy civilizations. Its diplomacy stretched beyond a century where it was a member of the League of Nations and the founding member of the Organization of African Unity, the United Nations, the Non-Aligned Movement, and the Group of 77 and China. Ethiopia is also an active member of the African Union and a champion of several initiatives of the Union. Thus, it brings a wealth of experience to the BRICS.

Furthermore, BRICS makes Ethiopia geo-strategically important through increasing its international bargaining power, South-South cooperation and multilateralism, and its ambition to become a major player. It will also help reshape the economy of Africa. BRICS membership can assist in overcoming Ethiopia’s domestic issues and maintain a beneficial political stability. A market of 120 million people with a huge untapped potential, and almost 50% of the population under 18 years of age is an opportunity for the presence of the other BRICS nations with an eye of cost effective Ethiopian labor and export manufacturing potential, as their own economies move up the value chain and become more expensive.

The long-term relationship between China and Ethiopia has been going on for over 50 years, while a comprehensive partnership of strategic cooperation between the two countries is a strong foundation for growth and trade. China has been Ethiopia’s largest trading partner and a source of investment for years. The relative share of imports from China has increased and China’s ability to produce Ethiopian goods has increased as well. Apart from business cooperation in the Investment Forum, economic cooperation in the form of China-Africa Cooperation (FOCAC) and the Belt and Road Initiative, China’s presence in investing in new industrial parks, and privatizing Ethiopia is important. Ethiopia has joined the BRI and benefits from the construction of various infrastructure projects such as the Addis-Djibouti railway, the African Union building, and other infrastructure projects.

China has also invested in Ethiopia’s economy in various sectors such as manufacturing, the construction of a large special economic zone in Addis Ababa, and in the development of the African Window project. In practice, Beijing is constantly opening up new prospects for cooperation to strengthen cooperation in trade and investment, green development, digital economy, health, and other fields. Likewise, there is a huge potential and interest with the rest of BRICS Countries that are already making impact on the development endeavors of the Country. Ethiopia does not see the BRICS platform as a substitute or a replacement for the existing partnerships. The BRICS membership complements Ethiopia’s existing bilateral and multilateral partnerships. In fact, Ethiopia believes that BRICS will play a crucial role in strengthening and reforming the global system, emphasizing inclusivity and representativeness. So, Ethiopia remains committed to multilateralism and upholding international law based on solidarity, respect, justice, and equality.

To conclude with, Ethiopia is keen to play a vital role in maintaining peace, advancing sustainable development, and ensuring democracy and human rights. Ethiopia is a country on a steady rise to prosperity. Joining the BRICS enhances Ethiopia’s opportunity to utilize these opportunities, especially since Ethiopia is registering one of the highest economic growth in Africa. It is important to note that Ethiopia also has the capacity and institutional experience and preparedness to contribute to the objectives of BRICS. Thus, Ethiopia’s massive investment in connectivity and its unique position at the tri-point of Africa, the Middle East, and Asia make the country a prime hub of connectivity in Africa.

[1] – Professor, Lebanese University Faculty of Letters and Human Sciences Department of English Language and Literature (First Branch). E-mail: srouribrahim@gmail.com

أستاذ في الجامعة اللبنانية، كلية الآداب والعلوم الإنسانية قسم اللغة الإنجليزية وآدابها (الفرع الأول).