Daily Times

The BRICS summit, scheduled for August 22-24, 2023, was poised to bring about significant transformations, as the alliance, consisting of Brazil, Russia, India, China, and South Africa, explores the prospects of introducing a unified currency and an alternative financial framework. This initiative holds the potential to reshape global dynamics in parallel with Western integration. The focal point of the discussions in Johannesburg was the launch of a common currency. Concurrently, deliberations extended to the aspirations of 23 nations, including Argentina, Egypt, Iran, and Saudi Arabia, all expressing keen interest in joining the BRICS coalition. In a world where Western-led reforms in global governance have faltered, the BRICS alliance offers a ray of hope for developing countries, like Pakistan.

This specific move is a strategic measure to realign global connections, harmonising them with the Western economic integration paradigm. As the BRICS member states endeavour to restructure the global financial architecture, Pakistan must diligently assess the advantages of becoming a part of this bloc. Notably, the BRICS alliance collectively encompasses more than 40 per cent of the global population. China, within the BRICS constellation, boasts the largest GDP, having reached $16.86 trillion in 2021. In comparison, the other members have GDPs below three trillion. When combined, the BRICS nations collectively wielded a GDP exceeding $26.03 trillion in 2022, surpassing that of the United States. The World Bank data reveals that in 2020, BRICS accounted for 10 per cent of global services exports and 13 per cent of global services imports, underscoring its substantial economic potential.

In a world where Western-led reforms in global governance have faltered, the BRICS alliance offers a ray of hope for developing countries.

At its core, the BRICS alliance symbolises South-South collaboration and the escalating influence of emerging economies. For Pakistan, joining BRICS would offer a pathway to diversify trade partnerships, mitigating reliance on the United States. The establishment of two financial institutions by BRICS, the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA), assumes pivotal significance. The CRA, with a capital base exceeding $100 billion, extends assistance to BRICS member states in managing a short-term balance of payment challenges. Moreover, access to funding from the New Development Bank without stringent International Monetary Fund (IMF) prerequisite augments financial flexibility. From a political standpoint, aligning with BRICS would position Pakistan alongside prominent advocates of a multi-polar global order. A strategic alliance with these emerging economies is not only logical but also imperative. The symbiotic advantages are conspicuous. The China-Pakistan Economic Corridor (CPEC) has already enmeshed Pakistan within China’s sphere, while Saudi investments bolster its balance of payments. Russia provides avenues for energy security and defence collaborations, whereas South Africa and Brazil open gateways to burgeoning African and Latin American markets. While India may present a challenge, adept diplomacy has the potential to unlock mutually beneficial cooperation.

The substantial share of Pakistan’s import and export activities within the framework of BRICS underscores the alliance’s integral role in the country’s trade landscape. In 2021, BRICS accounted for a significant 35.2 per cent of Pakistan’s total imports. Notably, China alone constituted 27.2 per cent of imports from the bloc. Beyond imports, BRICS serves as a vital export destination, absorbing 11.1 per cent of the country’s total exports in 2021. This robust bilateral trade dynamic underscores the significance of BRICS in broader trade strategy. Moreover, Pakistan’s economic entwining with BRICS continues to grow, exemplified by the noteworthy annualised increase of 8.32 per cent in Russian exports to Pakistan.

Evaluating the prevailing trade patterns, Pakistan’s inclusion in BRICS becomes an even more compelling proposition. Adoption of the BRICS currency would act as a buffer against fluctuations in the US Dollar, fortifying Pakistan’s economic stability. Most significantly, alignment with these leading emerging markets solidifies Pakistan’s stance within the emerging multi-polar world order.

However, Pakistan must first address its internal affairs. Enhancing exports, broadening the tax base, curbing inflation, and improving the ease of conducting business are critical imperatives. Pakistan’s integration into BRICS will hinge on its economic credentials. Notwithstanding, Pakistan’s sizable young population and strategic geographical location present undeniable allure. Active participation could contribute to amplifying BRICS’ geopolitical influence. The inclusion of the UAE and Egypt in the New Development Bank underscores the alliance’s expansion strategy. Regional dynamics, including India’s potential opposition, warrant consideration. Notably, China and Russia have voiced support despite potential hurdles. Alignment with BRICS would bind Pakistan more deeply within Eurasian institutions, complementing the China-Pakistan Economic Corridor (CPEC) and the Belt and Road Initiative. From both economic and geopolitical perspectives, the BRICS alignment distinctly aligns with Pakistan’s interests.

To construct a compelling case, Pakistan must undertake governance reforms, augment exports, broaden its taxation base, and adeptly address members’ concerns through diplomatic channels. Through judicious policies, Pakistan could potentially translate its BRICS aspirations into concrete reality. However, the path forward is not without formidable challenges. Variations in governance models among BRICS member states may introduce tensions. Balancing relationships with the United States and Europe will necessitate astute diplomacy. Nevertheless, the anticipated benefits far outweigh the associated costs. BRICS embodies the forthcoming pillars of global growth. Pakistan must deliberate on the merits of participation as it continues forging strategic partnerships.

The writer is a researcher at the Centre for Aerospace and Security Studies (CASS), Lahore, Pakistan. She may be reached at info@casslhr.com