Dhaka should give priority to joining BRICS

BRICS is an influential bloc of emerging economies that focuses on economic cooperation and development.Bangladesh applied for membership of BRICs after a dialogue between Bangladesh PM and President of South Africa immediately before 15th summit in South Africa. Chinese President Xi Jinping reassured our PM that his country will always stay beside Bangladesh in its needs including providing support in joining the BRICS and ensuring a permanent solution to the Rohingya issue.

During the summit there was a bargaining over which country to include and which to not. While there may not have been any direct opposition to Bangladesh, no one really stood firmly in its favour. Bangladesh's 'tested friends' has let it down once again. However, the membership of BRICS was a missing opportunity for Bangladesh.

The importance of BRICS as expressed by spokesperson of the Chinese Foreign Ministry Mao said that BRICS, an important platform for cooperation among emerging markets and developing countries, is committed to upholding multilateralism, vigorously advancing the reform of the global governance system and increasing the representation and say of emerging markets and developing countries.
The locations of member countries and Bangladesh are crucial for connecting China, India, and Russia to another members of BRICS. By integrating Bangladesh, BRICS will be able to develop a new trade channel, which will make it possible to bypass the conventional markets of Southeast Asia. Due to the fact that,Bangladesh shares land borders with Myanmar, which connects southeast and western Asia, and India, a BRICS member and significant player, Bangladesh maintains three seaports - Chattogram, Mongla, and Payra - out of the Bay of Bengal's 12 ports.

Moreover, due to Bangladesh's natural position as a gateway between South Asia and Southeast Asia, BRICS also has the opportunity to communicate and coordinate regionally with the enormous trade blocs BIMSTEC, ASEAN, and SAARC. Consequently, BRICS could contribute to regional organisations in south and southeast Asia via Bangladesh. Therefore, Bangladesh occupies a crucial position in this grand scheme, and some BRICS members view Bangladesh as an ideal location for investment and collaboration.

Considering the share in the global GDP, BRICS has already surpassed G7 economies. It is projected that by 2030, BRICS will contribute over 50% of the global GDP, and the proposed enlargement of the bloc will likely accelerate this trend.

Trade between BRICS countries totaled some $162 billion2022. Foreign investment has played an important role in the growth of BRICS economies. The total annual foreign direct investment in BRICS countries is four times greater than what it was 20 years ago.Even without expansion, the BRICS countries currently have a population of 3.42 billion, accounting for 42% of the world's population. In 2021, the group contributed 31.5% of the global GDP, amounting to $26.03 trillion. BRICS nations also accounted for 18% of global trade.

Experts are optimistic about what Bangladesh could gain in future from BRICS as its members make up 40 percent of the global population, providing access to a considerable consumer base. If BRICS forms an economic bloc in the future, Bangladesh may enjoy greater access to big markets like China and India after graduating from a least developed country in 2026.

Bangladesh has been already a primary member of the BRICS' New Development Bank (NDB) since 2021. From the NDB, the country can receive a handsome amount of low-cost funds for infrastructure development.

BRICS members are also members of the G20 and need to establish a warm relationship with those members so that their trade potentials can be utilised more. BRICS membership will help widening trade horizons of Bangladesh. It will help Bangladesh diversify its foreign relations. Of the BRICS countries, China and India are the top two trade partners of Bangladesh, accounting for almost 40 percent of its imports.BRICS and Bangladesh, on the other hand, have an ideal combination for investment and cooperation.

Hence, Bangladesh's current position is appropriate for investment and cooperation with the BRICS. Bangladesh's geostrategic location is a crucial factor for BRICS to consider for membership.

Joining BRICS will deepen Bangladesh's relations with these countries. It will also help Bangladesh diversify its foreign relations. Considering BRICS' status as the largest club of developing economies and its increasing economic and political influence this would also result in Bangladesh having a more robust security alliance.

It should be noted that the BRICS nations are leading the way in terms of technological advancement and have a history of sharing technology with other countries with fewer resources. As a member of the BRICS, Bangladesh would have access to advanced technologies to enhance the nation's technological capacities.

Bangladesh is going to graduate from LDC in 2026. As a result, Bangladesh will no longer be entitled to preferential trade agreements (PTAs) from developed countries. In order to reduce the effect of LDC graduation, Bangladesh must find new export opportunities.Here, BRICS might be the answer. Joining BRICS would open up a large and expanding market to Bangladesh, as well as increase the possibility of new foreign investments. BRICS countries already account for a significant share of Bangladesh's trade.

Immediate benefits may come as foreign investments as investors would think that Bangladesh is a member of this biggest bloc of developing economies. Also, there is a chance that bilateral trade between the member countries would increase. Bangladesh would be benefitted if the BRICS members sign full-fledged free trade agreements (FTAs) among themselves in the future.However, without comprehensive agreements in the areas of trade in goods and services, trade facilitation, intellectual property rights, and non-tariff measures, mere investment cooperation would not be meaningful. Bangladesh should be internally ready with massive reforms to join such future BRICS sponsored FTA.

In 2022, Bangladesh's exports to the BRICS countries had a worth of $18.5 billion, while its imports from the same countries amounted to $19.2 billion. Joining BRICS would provide Bangladesh with a greater connection to these markets. It could lead to an overall expansion of trade between Bangladesh and other BRICS countries.

The recent political and economic conflict also seems to be a global challenge. The world is now fragmented due to trade war, escalated protectionism, explicit and implicit trade wars, and the emergence of regional mega blocs like RCEP, CPTPP, TTIP, etc are showing some rays of hope of cooperation. We wonder what role BRICS will play in such a situation.

The are some challenges of BRICS. We can see various restrictions on investment from each other. In July 2023, India rejected Chinese automaker BYD's $1 billion investment proposal to build electric vehicles and batteries in India in partnership with a local company.

Bangladesh should give diplomatic priority to join BRICS at an early date to be in the platform of emerging economic power houses. It may also be prepared for the BRICS sponsored trade block with internal reform of administration, taxation and trade facilitation.

The writer is a Non-Government Adviser, Bangladesh Competition Commission