Ethiopia signals interest in joining BRICS
July 11, 2023
The acronym BRICS represents the emerging global economies of Brazil, Russia, India, China, and South Africa. The bloc was initially known as BRIC (Brazil, Russia, India, China). In 2010, the group added the letter S for South Africa.
The BRICS countries account for more than 40% of the world's population and about 26% of the global economy. Ethiopia would like to see the acronym changed to BRICSE ("E" for Ethiopia), according to an official announcement by the Foreign Ministry.
Opinions differ as to how meaningful and promising the application for admission is. From Ethiopia's point of view, the move is "strategically very important and good," Alexander Demissie, director of the independent consulting firm The China-Africa Advisory, based in Cologne, Germany, said. "It expands Ethiopia's options to advance its own geopolitical strategy and economis interests and become part of the ongoing reshaping of the international economic and geopolitical order," Demissie told DW.
Reshaping the economic and geopolitical order
The Bretton Woods system — the international financial system established after World War II with the dollar as the reserve currency and the World Bank and the International Monetary Fund (IMF) as controlling bodies — is being "transformed by organizations like the BRICS," Demissie said.
According to Demissie, BRICS has developed a formidable structure that can provide an alternative scenario for emerging countries like Ethiopia. He cited, among others, the New Development Bank (NDB), established in 2014 by the BRICS countries as an alternative to the World Bank and IMF. It could provide additional capital for infrastructure development in Ethiopia, he said.
Yared Haile-Meskel, director of the financial consulting firm YHM Consulting in Ethiopia's capital, Addis Ababa, is less optimistic. He believes the high hopes associated with membership are exaggerated.
"I wouldn't expect a miracle that if we join BRICS we will be better protected or become prosperous," Yared told DW.
Can BRICS solve Ethiopia's problems?
"I don't expect BRICS to solve any of our problems," Yared said, stressing that Ethiopia should focus on strengthening its national power. "Plus we have to look for other countries in Africa."
The financial expert criticized Ethiopia's and Africa's dependence on the West and the BRICS countries. The latter, he added, are an "exclusive club that wants to assert its own global influence."
Yared called on African countries to reevaluate their relations with other world regions. "Africa produces 50% of the [world's] gold and 90% of the [world's] platinum and yet they [Africa] don't have their own gold-backed currency," Yared said, urging Africans to start thinking differently.
"By being the follower of somebody else, we sometimes pay the biggest price."
With more than 120 million people, Ethiopia has the second-largest population in Africa and is one of the continent's fastest-growing economies. Overall, however, its economic output ranks only 59th globally and is less than half that of the smallest BRICS member, South Africa. Ethiopia has expanded its trade with China and India, but its population and economy have been reeling from civil war and drought in recent years.
Impact of Tigray's conflict and hunger
Since November 2022, guns have fallen silent in the northern state of Tigray. Estimates suggest that around 600,000 people died from fighting between Ethiopia's National Defense Forces and the Tigrayan People's Liberation Front. In addition, at least two million were forced to flee.
Recently, government troops clashed with Oromo and Amhara militias in the country's interior.
Moreover, millions of people suffer from hunger because of years of drought. A lack of grain supplies from Ukraine and Russia is exacerbating the situation, as is the misappropriation of food aid from the UN World Food Program.
The civil war has been costly, and, at the same time, the inflation rate has risen significantly. "Rather than seeking membership in the BRICS bloc, Prime Minister Abiy Ahmed should focus on bringing down the inflation rate," tweeted economist Steve Hanke of Johns Hopkins University.
More countries seek to join BRICS and ditch the dollar
In addition to Ethiopia, Iran, Egypt, Saudi Arabia, and Indonesia are also considered candidates for membership. More than 20 countries want to join the BRICS group, said Gustavo de Carvalho of the South African Institute of International Affairs (SAIIA) in Johannesburg.
"Many of them share similar characteristics to Ethiopia. They are regional powers, fast-growing economies, and have large populations," de Carvalho told DW, adding that those countries also share an interest in using alternative currencies, especially in bilateral trade. Candidate countries wanted to become less dependent on the US dollar.
It is still to be determined if Ethiopia will become a BRICS member soon. "If I had to make a probability scale, I would say Ethiopia is in the middle," de Carvalho said.
Long process to joining BRICS
"The process will take time," Demissie of The China-Africa Advisory said. But he noted "many positive signs for the future," partly because of Ethiopia's strategic location.
The next BRICS summit is scheduled for August in South Africa. "Probably only one or two new countries, if any, will join BRICS," de Carvalho said. He hopes for more clarity from the summit concerning the bloc's identity.
"A big question yet to be resolved is the criteria definition. What would countries have to bring to the table when joining BRICS? This is still uncertain for many of us, which could be a big discussion point at the August BRICS summit."
This article was originally written in German
Edited by: Cristina Krippahl