L’Expression: Algeria aims to integrate the Brics. What will this entail in terms of benefits and dividends, in terms of geopolitics and economics?
Abdelghani Ben Amara: In my opinion, it would be necessary to deepen, in the first place, the stakes of the creation of the organization “Brics”… and how can Algeria be integrated into this process? Indeed, since 2011, the primary objective of the member countries of the BRICS is to assert their economic and political supremacy, in particular vis-à-vis the USA and the European Union. The year 2022 has been beneficial for this group through the economic weight of its members. It should also be remembered that these countries had already occupied a major place on the international scene in the past. China was prosperous until the middle of the 18th century with developed agriculture and trade. Extensive growth. India also had an important textile industry which exported to Arab countries and Europe. India and China represented half of the world’s GDP in 2020, in particular thanks to their demographic weight. The Brics are an essential economic and commercial power. You should know that the weight of the Brics in world growth will be 40% in 2025. The total GDP of the Brics should equal in 2040 that of the G6 (the United States, Germany, Japan, France, the United Kingdom and Italy). It should be recalled that in 2014, the Brics had a cumulative nominal GDP of more than 14,000 billion, i.e. practically as much as that of the 28 countries of the European Union combined (18,874) and close to that of the United States (17 528). Some make up 40% of the world’s population (thanks to China and India) and logically possess the ensuing assets: Significant natural and human resources (large internal market, economies of scale, arbitration between openness and internal market). The Brics are also similarities that make this union, namely the control of the State on the prices of goods, services, and factors of production; Drastic restrictions on capital inflows and outflows; public interventions in production and credit and the protection of national industry. These policies create imbalances, but lay the foundations for industrialization and economic modernization.
Does this benefit Algeria’s membership more?
Yes it’s clear. Some similarities with Algeria can be noted. On the other hand, what is important for Algeria is the benefit it can draw from its possible membership in this conglomerate. The growth of the Brics is accompanied by significant, fairly rapid structural changes. By this we mean, first of all, the strengthening of its independence vis-à-vis Western financial institutions (the Brics’ own bank). In 2014, therefore, during the summit in Fortaleza, Brazil, the Brics set up, in addition to this development bank, a reserve fund, the Contingent Reserve Arrangement (CRA), in order to have provisions and liquidities to respond to d possible imbalances in the balance of payments. This will lead to the control of public finances, through a reduction in public debt, a recovery plan and reforms of the banking system, as is the example in Brazil, where the banking system has been disciplined, cleaned up and internationalized . The success of the trade and industrial policies of the Brics are a tangible fact. In terms of international supply and demand, the Brics have doubled in ten years (10 years) their share in the world trade in goods and services. Their supply and demand upset the global balance, and they are particularly important outlets for developed countries.
What about global geopolitics?
In fact, it is the triumph of pragmatism. The Brics have started a good geopolitical positioning against the opposing bloc (Western bloc, USA, UK, Europe…). The BRICS compete, unquestionably, with the major Western international institutions. The Brics experience illustrates the crucial role of institutions, where the importance of the role of the state in global strategies calls into question the capitalist model and faith in a self-regulating market. With all these advantages, Algeria could strengthen its position on the world stage and begin its transformation with the Brain drain (the case of the Algerian diaspora). In terms of innovation and technology, India and China have been able to take advantage of new technologies, the so-called ´´advantages of the laggards´´: they have had a significant innovation margin. and have bypassed development stages by adopting recent technologies. We also find new technologies in technology transfers which are partly responsible for China’s success. Algeria must intensify its digital development policy and new technologies… the skills are there! On another level, in Brazil and Russia, trade liberalization (tariffs, but also quotas and licenses) has made it possible to lower prices and stimulate competition. In China, it has facilitated the importation of foreign equipment and technology. Algeria must correct its import policy…all over the place. If we compare the export/GDP or import/GDP ratios, Russia, India and China are more open than the USA and Japan. They are vulnerable to fluctuations in international demand. The Brics have also been able to move towards exports of more skilled labor intensive products, 40% of China’s exports are high-tech products. Algeria, through voluntary encouragement of a skilled workforce, can create opportunities, particularly with its proximity to Europe. There is also the rise of intra-Brics exchanges, which are very important where China plays a major role. It accounts for three-quarters of the group’s trade, and greatly stimulates exports from Brazil, Russia and India, by buying agricultural raw materials, energy, semi-finished products from them, and selling them consumer goods and equipment. Algeria will be able to integrate these markets in the perspective of a formidable opportunity for global economic integration. Like the BRICS countries, where intra-zone trade remains extremely present, Algeria will be able to strengthen its position as a major African player, by playing a major role in trade in its region. In terms of international FDI investments, the Brics have become host countries for this capital, but have also more recently become international investors. Take the case of the emerging “Brics” multinationals. The rise of FDI made by the Brics is more recent, but more impressive than that of the FDI they have received, since their weight has doubled in five years. Among the five hundred largest companies in the world (by turnover), 69 are Chinese, eight Indian, eight Brazilian, and seven Russian. Today, emerging multinationals (MNEs) are investing abroad. They want to quickly acquire a leading position in sectors that seem mature. Algeria must buy companies abroad and act to improve its external financial positions. The foreign debt of the BRICS is now relatively low and they hold, between them, a third of the world’s currency reserves. This is the case of Algeria! In conclusion, the advantages of a possible future membership of Algeria in the organization “Brics” are considerable. But there is still a long way to go… There are many of these countries (Mexico, South Africa, South Korea or Turkey), with strong economic growth, jostling at the Brics gate. However, Algeria has a major asset: its energy power… and its status as a privileged partner for regional and European geopolitical balance.
Algeria plays a role as an important energy supplier to Europe. Could his membership in the Brics harm this stature?
Absolutely not, Algeria as a privileged energy partner with Europe can only strengthen its geostrategic and economic role by being a member of the BRICS. As for the gas supply crisis in Europe, Algeria and Russia have already resolved this issue. There is no conflict whatsoever.
Can the integration of the Brics be perceived as a positioning in favor of a new multipolar world order?
Indeed, the integration of es Brics is perceived as a positioning in favor of a new multipolar world order, which is fully in line with the new Sino-Russian alliance. A new multipolar, just and democratic world order. It is also 57% of global wealth in 2030. It is a major shift that is taking place in the balance of the world and represents, for humanity, the hope of gradually emerging from poverty. Emerging countries (Brics), thanks to their exports and the trade deficits of developed countries, benefit from significant trade surpluses. More than 3,000 billion dollars of foreign exchange reserves for China alone. These surpluses are used to invest in developed countries. , buying companies in difficulty, buying technologies, which are difficult to acquire on their own, which accelerates their development. Emergence also has a political dimension. Large countries, such as China, India, Brazil or the “South Africa want to have more weight in international relations. India, Brazil and South Africa are thus claiming the status of permanent members (with veto power) of the UN Security Council. More than a simple economic alliance ( economic union), Indeed, the Brics are indeed a real and powerful “political grouping”. The challenges of tomorrow over the next 40 years will make the balance of power in the economy my dial will be deeply upset for the benefit of the Brics. To stick only to 2025, China would become the first economy of the in 2025 with? of global GDP, and the Brics would account for around a third of global GDP, as much as the EU and the USA combined. They represent a colossal market for Algerian products if we seriously start exporting non-hydrocarbons. On another level, the BricsC will weigh more and more heavily in the global demand for energy and raw materials. The International Energy Agency forecasts that China should contribute 35% to the increase in global energy demand over the next few decades, and India 17%. The Brics would represent, in 2035, 38% of global energy demand.