Egypt is Officially a Member of BRICS

Egypt’s accession to BRICS Plus in 2024 has sparked debate among political analysts and economists. Egypt can gain benefits such as access to a larger market and increased trade opportunities with other countries within the alliance – Brazil, Russia, India, China, and South Africa. This could stimulate the Egyptian economy and lead to greater economic growth and prosperity. Additionally, aligning with emerging global powers can enhance Egypt’s political power and influence on the global stage.

As a member of BRICS Plus, Egypt would have a greater say in international decisions and could form strategic alliances in areas such as defense and security. However, there are potential challenges and drawbacks, including potential conflict of interests and values between Egypt and other member countries, the complex and lengthy integration process, potential domestic challenges, and a shift in focus and priorities for Egypt. This could strain relationships with other countries, particularly those in the Arab world.

The surge of US dollar in Egypt has sparked debate about whether it will accelerate the country’s alignment with BRICS Plus. The US dollar’s value in Egypt has been increasing due to factors such as the stability of the Egyptian economy and the policies of the Central Bank of Egypt. BRICS Plus has gained traction in the international community due to its potential to challenge the traditional global economic order dominated by Western countries.

The increased value of the US dollar has positively impacted Egypt’s economy by boosting foreign reserves and improving its trade balance. However, it also presents risks, as a strong reliance on a single currency can leave a country vulnerable to external shocks and fluctuations in the global market. Egypt presents an attractive alternative with BRICS Plus, offering a diverse set of currencies, opportunities for economic growth, and cooperation with emerging economies. Economic ties between Egypt and the BRICS countries have strengthened, with China being Egypt’s largest trading partner.

However, Egypt would have to overcome challenges such as being heavily reliant on foreign aid, particularly from the US and European countries, which could potentially create political tensions if it were to fully align with BRICS Plus. Additionally, BRICS Plus is still a relatively new concept and its success in challenging the dominant global economic order is yet to be fully realized.

The BRICS nations, comprising Brazil, Russia, India, China, and South Africa, have become a significant global economic force, accounting for nearly a quarter of the world’s GDP. However, traditional reserve currencies like the dollar and euro have hindered their full involvement. The digital Egyptian pound could potentially play a significant role in this regard. As a digital currency, it offers faster, cheaper, and more efficient financial transactions compared to traditional currencies.

This would benefit businesses and individuals involved in trade and investment activities, eliminating the need for costly exchanges. The digital Egyptian pound, backed by the Central Bank of Egypt and pegged to the Egyptian pound, provides a stable and reliable value, particularly important for developing economies like the BRICS countries. It can also facilitate greater financial integration within the BRICS bloc, reducing trade and investment barriers, encouraging cross-border lending and borrowing, and enhancing intra-BRICS transactions like remittances.

Additionally, the digital Egyptian pound could attract the interest of other emerging economies, such as the BRICS Plus countries, by offering stability and efficiency. This could further expand the reach and impact of the digital Egyptian pound, promoting greater economic cooperation and integration among a wider network of emerging economies.

It is worth noting that the Egyptian digital pound will be issued in the coming months following the agreement of the Central Bank of Egypt with international financial institutions (the International Monetary Fund and the World Bank) as a step toward digital transformation in Egypt.

Through a symposium organized in Cairo on December 17, 2023, under the title “Partnership between the Eurasian Economic Union and Egypt,” Russian Ambassador, Mr. Georgy Borisenko, and the Russian Trade Advisor, Mr. Aleksei Tevanyan, to Cairo, in an interview with me, stressed the following:

Russia is serious about developing bilateral trade with Egypt under the umbrella of BRICS Plus, as Russia is a representative of the Eurasian Economic Union, and this comes from diversifying currencies and not relying on the dollar. As well as the use of local currencies in commercial transactions at the beginning of the new year 2024 between the two countries in a way that serves the interests of both countries and avoids any exposure to any economic sanctions. His excellency also acknowledged the importance of establishing a free trade zone in Egypt with Russia and increasing the volume of trade exchange this year to an estimated $7.2 billion, compared to the previous year, when it reached nearly $6 billion, in addition to the localization of Russian industries in Egypt.

Mr. Tevanyan reported that President Putin signed the new concept document for developing ties with the Middle East and North Africa, especially with Egypt under the umbrella of BRICS Plus. We must take advantage of Egypt’s natural resources, infrastructure, and logistics that are not available in nearby countries, in addition to its strategic location.

The Russian Industrial Zone project in Egypt will play an important role, as the Additional Protocol was signed to activate it in 2024, as its implementation and construction will begin after the Egyptian Parliament ratifies the free trade agreement between the two countries.

Both clearing and barter systems can be used between the two countries to avoid the dominance of the dollar, and also not to put pressure on Egypt’s economy by providing hard currency. The Moscow Stock Exchange plans to launch trading in the Egyptian pound in 2024, and this will of course take place after it is digitized.

The Russian side also proposed that Egyptian banks join the Russian cash transfer system, as well as the Central Bank of Egypt’s acceptance of dealing with “Russian Mir credit cards,” which operate in ten countries, which will bring many Russian tourists to Egypt, and will even facilitate other matters between the two sides, in a way that serves the Egyptian economy is revitalized via BRICS Plus.

Finally, Russia and Eurasian Union investments entered into feasible projects inside Egypt, including the modernization of infrastructure, logistics, and energy projects as well. The largest cooperation in this field was in the Dabaa nuclear station under construction, which is being implemented by the Russian energy giant, “Messrs. Rosatom.”

In conclusion, Egypt is set to join BRICS Plus in 2024, based on its strong economic foundations, strategic partnerships, and role in promoting regional integration in Africa. As one of the world’s largest developing countries and emerging market economies, joining BRICS Plus offers economic and political benefits, strengthens the coalition’s representation, and enhances its global influence. However, the prospect of joining BRICS Plus comes with challenges, including the recent surge of US dollar in Egypt, which has sparked discussions about its potential alignment with BRICS Plus. The decision to align with the BRICS Plus monetary system remains uncertain, with the digital Egyptian pound potentially playing a crucial role in facilitating involvement with the BRICS bloc in the global economy.