by Silvia Boltuc –
The 15th BRICS summit concluded on 23 August in Johannesburg, South Africa. South African President Cyril Ramaphosa announced the results of the summit: BRICS will expand. The international organization has invited Argentina, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates to become full members of the BRICS from 1 January 2024.
Particular emphasis was placed on the role that the New Development Bank will have for infrastructure and sustainable development in Africa and in the southern hemisphere. The summit also reaffirmed the commitment to inclusive multilateralism and respect for international law, including the purposes and principles enshrined in the United Nations Charter.
The group underlined that a trend is currently emerging which sees the growing use of local currencies, financial agreements and alternative payment systems. In this regard, the summit decided to ask BRICS finance ministers and/or central bank governors, as appropriate, to consider the issue of local currencies, payment instruments and platforms and report back to leaders of the BRICS by the next summit.
What is taking place today is indeed a shift in the global geopolitical status quo. With several Western countries facing recession due to the consequences of the COVID-19 pandemic and sanctions against Russia, Southeast Asia is recording the largest emerging economies.
According to Jo Sullivan, a former White House economist, the BRICS countries collectively export more than they import. They don’t need to borrow money from non-BRICS nations like the US or Europe to import goods. Thus, the rest of the world would have no source of influence over the blockade.
For the Islamic Republic of Iran, isolated by four decades of sanctions, this could be an epochal turning point. At the closing ceremony of the BRICS summit entitled “Iran and the BRICS: Prospects for Partnership and Cooperation” held on August 8 at the Foreign Ministry’s Institute for Political and International Studies in Tehran, Foreign Minister Hossein Amir-Abdollahian had confirmed the country’s interest in joining the economic blockade, stating that the Islamic Republic can be a “reliable and influential” partner. Abdollahian, in his speech, underlined the need for collaboration between developing countries and the global south.
In this regard, it is important to recall the renewed African policy of the Islamic Republic of Iran. Although Tehran is still working to revive the 2015 nuclear deal, the continued failures in the Vienna talks and the general lack of trust in European interlocutors – who failed to keep the pact alive when the US unilaterally withdrew – they have pushed Iran to develop new strategies to revive the country’s economy and reorganize a network of contacts with ‘non-aligned’ countries. In line with this approach, the first summit on economic cooperation between Iran and West African countries was held in March 2023. Subsequently, in mid-July, Iranian President Ebrahim Raisi undertook a trip to three African countries, marking the first time an Iranian president has undertaken such a visit in over 11 years. Cooperation has also increased with the countries of Latin America and Eurasia, including Central Asia, the Caucasus and, recently, the Gulf countries. Amir-Abdollahian further added that economic and political alliances in developing countries aim to strengthen their bargaining power in international negotiations, especially at the United Nations.
Recent Iranian foreign policies have marked an improvement in the country’s economic performance despite decades of sanctions. Developing existing free trade zones and creating new ones has become one of the Tehran government’s main economic approaches. Secretary of Iran’s High Council of Free Zones Hojatollah Abdolmaleki said the value of exports from Iran’s free trade zones and special economic zones last year was close to $18 billion, with a trade balance of these zones which achieved a positive $700 million for the first time. Oil exports have also increased, and Iran has secured membership or free trade agreements with major economic organizations, such as the Shanghai Cooperation Organization and the Eurasian Economic Union.
In conclusion, Tehran has demonstrated unexpected resilience, developing the capacity to positively exploit the unique set of circumstances surrounding the Islamic Republic, especially the isolation, caused by international sanctions.
Joining the BRICS, which includes Russia and China, could help Tehran bypass economic sanctions and take part in global growth. Conversely, for the BRICS, Iran represents a great opportunity. Europe has long looked with interest to the Islamic Republic for its enormous untapped potential, but has been unable to access it due to international restrictions. The Islamic Republic has the world’s second largest gas reserves and is rich in oil. It shares borders with 13 states and has strategic access to the Caspian Sea, the Persian Gulf, and the Central Asian and Caucasus regions, as well as being part of international transit corridors. Its strong commitment to multilateralism, its focus on growing manufacturing and trade, and strengthening economic ties with regional players despite ideological or political frictions have shown that the country could be a strong candidate for the bloc and contribute to balance the sphere of influence of the Group of Seven (G7).
It is also important to underline that in the MENA area, Saudi Arabia is the first trading partner of the BRICS countries and is considering joining the New Development Bank (NDB), as already occurred with the United Arab Emirates in 2021. Normalization relations between Riyadh and Tehran, and Beijing’s investments in both countries, will further increase the BRICS bloc’s chances of success, reduce disputes and increase Iran’s international presence. Saudi Arabia is also among the countries invited to join the BRICS. The effort made by Middle Eastern actors to overcome the historical division has been driven by the need of both Riyadh and Tehran to improve their country’s economic performance and to attract new investments. Growing economic ties between Eurasian countries will serve the stability of the region.
