The main dialogue of Bangladesh's foreign policy is friendship to all, with malice towards none. Nothing in international politics is permanent. With the passage of time, the calculus of friendship and enmity changes, so the relevance and practical reflection of this neutral dialogue often becomes irrelevant and unrealistic. Bangladesh announced its plans to join BRICS at a time when the country is in dire straits of dollars to meet the cost of importing many commodities, including coal and energy. Besides, Bangladesh is already going through a critical situation both economically and politically.
It is a complicated situation for Bangladesh. The question is where the motivation to go to BRICS Bangladesh is coming from! It is coming not so much from an economic development point of view, but more from a political strategic point of view. Currently, the government is facing some kind of pressure from the developed world, politically, on the question of democracy, on the question of human rights, on the question of elections. Perhaps this decision of the government is to show that we are not alone as a country in facing these questions.
Bangladesh's financial system has been dependent on imports and exports since its inception. Natural resources, wealth and production are all insufficient. In relation to BRICS, Dhaka is now facing both crises, on one side the Western bloc and the EU, on the other side the potential BRICS alliance of China and Russia. Since the BRICS have big plans like de-dollarization and introduction of common currency; And due to the involvement of geopolitics, the United States may be extremely unhappy with Dhaka's accession to BRICS. If Dhaka can properly manage this challenge, it will be able to achieve its own interests by participating in BRICS while maintaining trade and diplomatic relations with western countries. But of course, Bangladesh would make a grave mistake if it joined BRICS as a strategy to denigrate the West.
Bangladesh is getting various benefits including import-export, investment, remittance, higher education opportunities, immigration in relation with the western region. Amid the global economic recession, mainly the US and EU markets have saved Bangladesh's export earnings. According to Bangladesh Bank and Export Development Bureau (EPB) data for the fiscal year 2021-22, the destination of 20 percent of the country's total merchandise exports is the United States. About 50 percent of total product exports are destined for the EU. 70 percent of Bangladesh's exports go to the United States and its allied countries.
On the other hand, BRICS countries China and India supply almost half of Bangladesh's total imports, which are many times more than exports. As a result, the country's trade deficit has to be met by exports and repatriation income, foreign investment and loans to the United States. The United States is also at the top in terms of foreign direct investment. Almost all international organizations of the world such as the United Nations, IMF, World Bank, FAO etc. are directly and indirectly under the control of the United States. As a result, it will not be possible to get loans from various organizations and save from the blockade without the United States. Moreover, the world's second largest contingent of security personnel from Bangladesh goes to UN missions, earning Bangladesh a large amount of foreign exchange. Bangladesh will be deprived of this benefit if it goes against the United States.
However, joining BRICS is expected to bring several important benefits to Bangladesh. Notable among them is that after becoming a member of the BRICS alliance, Bangladesh will get the benefit of taking loans in various sectors, in this case the loan interest rate will also be lower. Relations with the members of the BRICS alliance will increase, in this case trade and investment with the member countries will increase. Bangladesh's global position will be stronger if it joins the BRICS alliance, Bangladesh can take advantage in this case if an alternative currency or an alternative trade system is introduced in the BRICS countries in the future. BRICS may be an institution like IMF or World Bank in the future, in which case Bangladesh can get large loan facility.
It should be noted that in 2008 BRICS was formed by Brazil, Russia, India and China. Later in 2010, South Africa joined. It was then renamed as BRICS. The journey of BRICS Bank started in 2015. So 'BRICS' is a powerful alliance of five large emerging economies - Brazil, Russia, India, China and South Africa. At present, BRICS countries have a total population of 3.42 billion and a total area of 40 million square kilometers, which is 42 percent of the world's total population and 30 percent of the total area.
BRICS has already surpassed the G-7 economies in total contribution to global GDP. According to World Trade Organization (WTO) sources, BRICS' contribution to global GDP in 2021 was 31.5 percent or equal to $26.03 trillion, while FDA flows and stocks were $355 billion during the same period. Their contribution to world trade is 9.3 trillion dollars which is 18 percent of total global trade. This equation assumes that the BRICS countries' contribution to global GDP will increase to 50 percent by 2030.
The BRICS of 2023 envisages a separate diplomatic forum and development finance outside the Western-controlled global financial institutions. Basically the economic growth of these developing or newly industrialized countries is quite upward. Also, these countries have a lot of influence on regional and international events. So economists consider this alliance to be quite influential. According to India's research institute Observer Foundation, the BRICS alliance is a major power in the world today in terms of population, size and economic size.
The BRICS countries feel that the global economy is suffering due to the unilateral system of the Western world in violation of international law. In addition, due to sanctions and US restrictions on the SWIFT system, BRICS has insisted on expanding the use of local currencies in international trade and transactions among its members and trading partners, and is desperately seeking alternatives to the US dollar. An economic war between the United States and China began before Russia's invasion of Ukraine. China has previously called for a 'new international financial system'. But with the Ukraine war, things really got heated. The Chinese yuan is not capable of replacing the dollar by itself, no matter how much China tries to change it. Because it still represents only two percent of global foreign exchange reserves. So de-dollarization is very unrealistic at the moment.
Basically, the global tension with the Covid epidemic, the increase in commodity prices and the collapse of the supply system, the availability of vaccines have all brought about a new perception. The self-interested diplomatic behavior of developed countries is evident, while developing economies seek to strengthen their political institutions. But while they move in one direction in terms of economic prospects, their political and geographical positions are reversed. As a result, it becomes difficult for them to achieve the economic potential that they have. Following this, the Ukraine-Russia war has further increased the relevance of BRICS for developing world countries.
Although BRICS is an economic alliance, it is called a Western or anti-US alliance. Russia and China, the two main rivals of the United States politically and economically, are active members. Western efforts to isolate Russia after the Ukraine war have not been entirely successful. The US trade war with China is still raging. Bangladesh is also in a different geopolitical situation. Ahead of the elections, the United States has introduced a new visa policy for Bangladesh. On the other hand, China has openly supported Bangladesh. Neighboring India, which supports Bangladesh, is also another BRICS member. Indian newspapers are writing about India's support for Bangladesh's position. In such a context, experts believe that Bangladesh's desire to become a member of BRICS will add a new dimension.
Not only Bangladesh, a total of 20 countries have expressed interest in joining the BRICS alliance. Among them, the interests of Algeria and Saudi Arabia are the most discussed in the international media. These two countries produce oil. It is believed that they will try to take an important role in determining oil production and prices from within the BRICS.
Those who want to be a member of BRICS, they should see what effect it might have on them if they become a member, they should remember that one of the BRICS countries is Russia, with which many countries are now directly or indirectly at war. On the other hand, China is strongly accused of long-term economic aggression, debt trap, investment and saving geopolitical interests in the name of infrastructure development. So there will be multiple behaviors.
Not only that, how BRICS will be expanded, its policies or procedures are not yet fixed. As a result of which Bangladesh may fall into any risk, it should be noted that Bangladesh became relevant in BRICS in 2021, giving Bangladesh a new membership in NDB which has given new opportunities in terms of financing the development of the country. But it should be remembered that Bangladesh is in alliances like SAARC, BIMSTEC, D-8. These alliances also aimed to increase trade relations among themselves. We did not see much profit. Therefore, when going to BRICS, a country like Bangladesh has to move forward with great prudence, efficiency, and a neutral approach. Strategic participation, but at the same time strategic distance must be maintained.
Athar Noor is a researcher & political analyst that graduated from the Department of International relations of the University of Chittagong, Bangladesh. He can be contacted at atharnoor2019@gmail.com.
This article has been updated to include more information on BRICS .
