Why is BRICS getting "hotter", the door to joining the bloc is wide open, the benefits outweigh the risks?

Before expansion, the five BRICS member countries accounted for about 40% of the world's population and about a quarter of global GDP.

The door to joining BRICS is open. (Source: Reuters)

The BRICS group of leading emerging economies will need a new name when it adds Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (UAE) earlier this year.

The door to joining BRICS has been open ever since. In February 2024, South African Foreign Minister Naledi Pandor announced that more than 30 countries wanted to join the international grouping.

Counterweight to America

Malaysian Prime Minister Anwar Ibrahim has expressed his desire to join the bloc and is lobbying Russian, Chinese and Indian officials on Kuala Lumpur's application.

Meanwhile, Thailand also submitted its formal application for membership in June last year. Thai officials hope to be able to attend the BRICS Summit in Russia in October.

In the past, BRICS has struggled to find its economic or geopolitical purpose in a context where its member states have little in common other than being large and non-Western.

In recent years, however, BRICS has increasingly sought to position itself as the voice of the Global South – a term used to describe developing economies.

"For some countries, BRICS could be a counterweight to US economic hegemony," said Rahman Yaacob, a researcher in the Southeast Asia program at the Lowy Institute.

Joining the group could also be a political hedge, given the growing rivalry between Washington and Beijing.

“If the world is going to break up into blocs, it’s better to be in one than to be out,” said Deborah Elms, head of trade policy at the Hinrich Foundation.

Why Malaysia and Thailand "knock on the door" of BRICS

China is currently Malaysia’s largest trading partner, according to researcher Rahman. The world’s second-largest economy is also the largest source of development aid for several countries in Southeast Asia.

For Malaysian Prime Minister Anwar, joining BRICS could be a way to secure trade or investment deals for the Southeast Asian nation.

"Malaysia's intention to join BRICS could prompt Western countries to increase investment in Malaysia, or even encourage the country to consider applying for membership in Western-linked alliances, such as the Organisation for Economic Co-operation and Development (OECD)," said Wen Chong Cheah, Asia-Pacific analyst at the Economist Intelligence Unit.

Malaysia's semiconductor industry could also benefit from closer ties with China and India, as these two giant consumer markets could buy more Malaysian-made electronics, Cheah said.

In addition, joining BRICS could also lead to increased tourist arrivals from member countries, especially China and India.

Meanwhile, Thailand may also be interested in joining BRICS as a way to jumpstart its ailing national economy.

Thailand's economic growth has slowed recently as the country's tourism industry struggles to recover from the COVID-19 pandemic.

BRICS - oil "giants"

In 2001 - then chief economist of Goldman Sachs, Jim O'Neill - argued that Brazil, Russia, India and China would be the main drivers of global economic growth and coined the term BRIC.

The leaders of the four countries agreed to use this name when they officially established BRIC at the 2009 Summit in the Russian city of Yekaterinburg.

The bloc added an “S” to its name when South Africa joined in 2010, becoming BRICS.

In 2014, BRICS established its own development bank, the New Development Bank (NDB).

Since its inception in 2015, the NDB has approved a total of more than $32 billion in loans to member countries. China hopes the NDB can disburse another $5 billion in loans this year.

If they join BRICS, Malaysia and Thailand would be a significant addition, as both have economies twice the size of Ethiopia and roughly the size of Iran and Egypt. Malaysia’s per capita GDP is only slightly lower than China’s.

According to World Bank (WB) data, before expanding membership, the five original BRICS countries accounted for about 40% of the world's population and about a quarter of global gross domestic product (GDP). With the participation of the UAE and Saudi Arabia, BRICS now accounts for nearly half of global oil supply.

More benefits?

In May, a Thai government spokesman suggested that joining BRICS would help create a “new world order”.

However, BRICS has achieved very little.

For example, the bloc does not have any formal trade or investment agreements.

According to analyst Cheah, BRICS members include rivals of the US such as Russia and Iran. This means that aspiring countries such as Malaysia and Thailand will need to balance.

However, some experts believe that countries like Malaysia and Thailand may receive greater economic benefits than the risks from joining BRICS.

Source: https://baoquocte.vn/ly-do-brics-ngay-cang-hot-canh-cua-gia-nhap-khoi-rong-mo-loi-ich-nhieu-hon-rui-ro-284015.html