The BRICS meeting in Johannesburg on August 22–24 has sparked a lot of interest around the world, which is debating what beneficial outcomes will come from this crucial forum. The focus is on analyzing and considering the admission of new BRICS members, including such a prosperous state as the United Arab Emirates.
Why such a strong organization as BRICS has focused on this relatively small state with a population of roughly 10 million and an area of 83.6 thousand km raises some question. The UAE is one of the world’s top oil producers, and oil and gas production together now form the foundation of this nation’s economy. The majority of government revenue and nearly all foreign exchange gains come from the production and sale of crude oil and gas. An estimated 2.2 million barrels of oil are produced every day, the majority of which is produced in the Emirate of Abu Dhabi. Other oil producers in terms of importance are Dubai, Sharjah and Ras al Khaimah. In just a few decades, oil has helped the UAE economy grow quickly, but other economic sectors have also expanded quite fast, particularly overseas trade.
The UAE’s location in the middle of the lucrative trade routes between the Far East and Europe helps the nation turn into a global economic hub. Additionally, the UAE boasts a sophisticated transit transportation system. The UAE has sophisticated telecommunications in addition to airports and seaports. In order to meet the increased demand for fresh water from both the population and the requirements of the almost 100 million trees that have been planted over the past 25 years, significant investments are being made in the construction of modern buildings and desalination facilities.
The leadership of the UAE shares the views of Russian President Vladimir Putin regarding the creation of a multipolar world based on the interests of all of its members, not just the collapsing West. As a result, the UAE will become a very effective member of BRICS and strengthen its position in both the economic and political spheres. But what would the Emirati people benefit from joining such a prominent organization? The government and media of the nation are currently actively debating this subject and are full of optimistic intentions to boost the nation’s significance in the political and economic arenas. For instance, according to the Emirati publication The National, the UAE’s membership in the BRICS is crucial since it will significantly increase the country’s support for multilateral agreements around the world. The newspaper continues, “We will be able to significantly expand our multilateral trade relations and use the potential of BRICS to reach out to the Global South. We are currently concentrating on this as being the most significant factor.” The news media says that attempts to increase foreign trade tenfold are under consideration, with money from which would surpass budget revenues from oil and gas output.
Taking a proactive approach, the UAE, which has joined the New Development Bank, plans to contribute additional funds to the international lender’s balance sheet. A total of $32 billion or more will be provided to fund 100 various projects, allowing the country’s economy to diversify. According to the wildly popular Emirati publication Gulf News, BRICS membership will also help the UAE reach its aim of achieving yearly economic growth of 7% or higher, effectively doubling its size by 2031 by. And these are genuine plans, as the UAE will engage with major powers such as Russia, China, and India, which are always committed to their words, promises, and plans in dealing with other countries.
It is common knowledge that a sizable Indian diaspora lives and works in the UAE, where relations are friendly and actively increasing. Since being a member of BRICS means exclusive relationships between its members, everything will proceed more quickly and actively. The implementation of the previously agreed Comprehensive Economic Partnership Agreement, which is now on track between the UAE and India, the third largest economy in Asia, is anticipated to expand non-oil trade between the two nations from $60 billion to $100 billion in five years. Both nations’ BRICS membership will enable them to regard their relationship as entering a new stage of strategic cooperation and will provide greater opportunities for trade and investment for businesses in India and the UAE.
According to UAE’s Economy Minister Abdullah bin Touq, this will result in a rise in the UAE’s gross domestic product of 1.7 percent, or $8.9 billion, and an increase in exports of 1.5 percent, or $7.6 billion, by 2030. According to Dr Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade of the United Arab Emirates, both nations’ membership in BRICS eliminates 80% of taxes on commodities coming from the UAE and India, and all tariffs will be erased within 10 years. The UAE’s second-largest trading partner is currently India, which accounts for 9% of total foreign trade and 13% of non-oil exports.
“The two sides are keen to increase their investment exchange, affirming their commitment to encouraging trade between companies in both countries by establishing a framework for high-level business, industrial, and investment partnerships,” according to a Khaleej Times story listing 12 sectors with growth potential. These include oil and gas, renewable energy, education, financial services, advanced technology, aviation, defense, pharmaceuticals and medical services, food production and security, food production and artificial intelligence, gems and jewelry, medicines, and medical services.
According to projections by Bloomberg Intelligence and the World Bank, India’s economy could continue to grow at the same rate and rank third in the world by 2026, reaching $10 trillion by 2030. Therefore, by establishing multilateral links with India, the UAE will be able to quicken its development and establish itself as a significant Indian partner in the Arab world. According to Gulf News, the two countries’ inclusion in BRICS will greatly speed up the execution of agreements already in place between India and the UAE, and the relationship itself may serve as a model for cordial relations for other Arab states.
Various kinds of cooperation between the UAE and China will definitely advance even more quickly within the BRICS framework. According to the Chinese press, the United Arab Emirates serves as a crucial link between the Middle East, Asia, and Europe because of its geostrategic location. The UAE has many key assets that help it draw in foreign investment, including a sophisticated banking system, advanced communications, and well-developed transportation networks. According to Gulf News, China has lately surpassed all other East Asian trading and economic partners.
It is important to remember that the UAE handles roughly 60% of all of China’s international trade, making the Gulf countries one of Beijing’s most important trading partners. Emirati ports and Free Economic Zones are used for re-exports to Africa and Europe. While other nations in Africa and the Middle East are only striving to board the locomotive named “China,” the UAE is actively assisting in China’s ascent. According to China Daily, “the UAE is one of China’s most important economic partners in the Gulf region, which serves as a hub for the transportation of Chinese products to countries in the Middle East and Africa.” The publication urged UAE businessmen to invest in China and Chinese enterprises to invest in the UAE, emphasizing that stronger bilateral cooperation benefits both countries’ key interests.
Against the backdrop of tremendous development in bilateral relations between China and the UAE, some elements that have directly contributed to their improvement are worth mentioning. The desire on both sides to advance the relationship is the most significant part of this growth. Such an aim was expressed in recent official remarks made by the parties, in official BRICS documents, and at meetings of the two nations’ leaders.
Sheikh Khalifa bin Zayed Al Nahyan, President of the United Arab Emirates, expressed hope that his country’s admission to the BRICS will be a significant step toward enhancing collaboration and economic relations among friendly countries. In his words, “UAE-China relations illustrate a model of international cooperation based on trade and economic partnership.” During the several visits made by the presidents of the two countries, numerous formal agreements were signed, securing the shared goals. The agreement between the central banks of the two nations to convert 20 billion dirhams into yuan was the most significant of the formal deals. This agreement reflects the UAE’s support for China’s quest to give the yuan the status of a global currency and limit the dollar’s impact between the UAE and China.
Hence, considering the UAE’s admission to the rest of the BRICS members, one can easily conclude that it would, on its own, enhance the credibility of the little Arab country in the international arena in all spheres. In many ways, the Emirates will now have a powerful organization on their side, which will undoubtedly accelerate development in the Emirates’ political and economic spheres, allowing them to operate more independently in the international arena solely in their own interests.
Victor Mikhin, Corresponding Member of the Russian Academy of Sciences, exclusively for the online magazine «New Eastern Outlook».