Growing BRICS could surpass the economic size of the G7
By Josef Kefas Sheehama.
It is not surprising that the BRICS+ will usher in a new economic order if the group of seven (G7) does not pull up its socks, as the group’s expansion presents new economic opportunities for developing countries.
There is no doubt that the establishment of the BRICS represented a major step forward in the long-term process of member countries’ integration, both politically and economically. To quicken the pace of national development, countries can form political, social, and economic alliances. According to projections for 2023, the BRICS+ countries account for 46% of the global population. IMF estimates indicate that by 2026, the G7 will account for 29% of global GDP, while BRICS+ will make up 38%.
Therefore, a revolutionary change in the world order has been subtly taking place, even as all eyes are on the wars raging in the Middle East and Eastern Europe, as well as the growing number of armed conflicts between the world’s superpowers. Large emerging nations are beginning to build institutions that challenge Western-led organizations and are beginning to exert more influence over international economic matters. In addition to the five permanent members Brazil, Russia, India, China, and South Africa the grouping also comprises five new members (Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates) who were invited or joined in January 2024. When taken as a whole, these ten countries produce and export about 40% of all crude oil.
Furthermore, they make up almost half of the world’s population, 25% of the global GDP, and 25% of the global goods trade. The bloc would now account for one-third of the world’s GDP if the twelve additional countries that have applied for membership among them, several dynamic emerging markets like Bangladesh, Vietnam, and Thailand, are admitted. Thus, the Group 7 will have to put in a lot of work or else the BRICS will take their place in ten to fifteen years.
Remarkably, Turkey has applied to join the BRICS, a group of countries that offer potential economic benefits without requiring major political or financial commitments. As mentioned by the country, Turkey has begun looking into alternative economic platforms as a result of the present deadlock in the EU accession process. They emphasized that seeing BRICS as an additional channel for economic cooperation rather than as a replacement for the EU or NATO, is important. Hence, there is now more intra-BRICS trade because trade in goods between BRICS members has significantly outpaced trade between BRICS and G7 countries. Many of these economies now carry significantly more weight in the global economy as producers and consumers as a result of decades of rapid growth. These countries can form another alliance that is less reliant on the West since many of them are involved with both China, which is viewed as an economic and trade superpower, and advanced economies.
WHAT’S IN IT FOR NAMIBIA?
Strategic alliances and partnerships are essential for promoting growth and prosperity for both businesses and nations in the dynamic global economy. With great potential for promoting economic cooperation and mutual benefits, the BRICS alliance is an important alliance of emerging economies. Interacting with the BRICS can create new opportunities for growth, expansion, and access to global markets for small nations like Namibia and Namibian businesses. Hence, there is no doubt that BRICS will benefit Namibia. The potential integration comes at an opportune time when Namibia is in the process of implementing the Sixth National Development Plan (NDP 6) and introduce structural reforms to make our economy globally competitive, reduce the cost of doing business, attract investment, and stimulate economic growth.
Namibia can expand its market access, stimulate industrialization, and amplify its contribution to BRICS+ through harmonized trade policies and market integration. Namibia’s role in relation to the BRICS network is not merely symbolic; it presents an opportunity for the nation to assert its presence on the global stage and contribute to reshaping the economic dynamics of emerging economies. By fostering economic stability, investing in infrastructure, empowering human capital, promoting exports, and aligning regional and multilateral efforts, Namibia can carve a niche within BRICS that is both impactful and mutually beneficial. As Namibia embarks on this transformative journey, all stakeholders with an interest in the country must recognize the immense potential of collaborative action and work collectively to position the nation as a driving force within the BRICS consortium.
Hence, this requires comprehensive and dynamic efforts that bolster Namibia’s export market access and diversify its markets to new regions and new products while also strengthening regional trade. The BRICS will serve as a source of growth that Namibia cannot afford to ignore.
Should Namibia become a member, it would also attract investments from other nations, including China and India, which are major players in the world economy. Simply by being a member of BRICS+, China has also been commended for the Belt and Road Initiative, which has the potential to accelerate economic growth and development.
WHAT POSSIBLE IMPACTS MIGHT THE BRICS HAVE ON RELATIONS BETWEEN THE US AND NAMIBIA?
Under the African Growth and Opportunity Act (AGOA), Namibia may lose its preferred access to American markets. Namibia’s economy would suffer from the loss or reduction of access to US trade benefits. Currently Namibia can export more than 6,400 items to the US tariff-free. If this preferential access is lost or reduced, it can cause economic setbacks in certain sectors. The challenge for Namibia is to clearly define and persistently pursue its own interests.
Moreover, it is beyond any doubt that the introduction of the New Development Bank, BRICS has moved a very important step forward in the long process of ending the dominance of the World Bank and the International Monetary Fund. The introduction of a BRICS single currency will halt the use of other currencies. Even though it is unlikely that the US dollar will be dethroned as the world’s reserve currency any time soon, I caution the world to be ready when the time comes. The availability of alternatives in currency and new technologies combined with the concerted actions among adversaries and allies alike, have led to the establishment non–dollar–based alternative infrastructures and international financial arrangements.
To this end, Namibia can’t afford to back out of the BRICS alliance. Global investment, trade, and economic growth are significantly influenced by these nations and they have the potential to be major actors in international affairs, stabilizing the world economy and promoting international stability.
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