Iran joining BRICS ‘will add value’

The 14th BRICS summit took place on 23rd and 24th June 2022 by video conference hosted by China.

Iran has applied to become a member of BRICS, and Iran’s President Ebrahim Raisi was invited by Chinese President Xi Jinping to attend the summit. President Raisi gave a speech, elaborating on Iran’s viewpoints on the most important international issues and expansion of cooperation with other countries.

According to a report by IRNA, President Raisi called on BRICS members to “strengthen this global platform for the effective role-playing of independent multilateral institutions in achieving homogeneous development and world peace.”

The following is an extract of the IRNA article:

Why is BRICS important?

As a grouping beyond continents, BRICS has the potential to create a new structuring for the global economy and politics. It can make a vocal contribution to international economic and political gatherings and challenge the current world order, as Europe and the United States have no presence in the grouping.

Currently, two BRICS members – Russia and China – are permanent members of the United Nations Security Council and three other members have aspirations to become permanent Security Council members to modify the global political and financial structure.

If Iran and other powerful countries join the grouping, it can be even stronger and challenge Western policies.

After 16 years since the establishment of the grouping, there have been few signs of cooperation between the BRICS and Western countries, as it has tried to expand intergroup interactions as was seen in the sanctions imposed against Russia in the Ukraine crisis. The US is an opponent of BRICS and along with its Western allies has always tried to undermine developing countries.

The BRICS has about half of the world’s population and 25 to 28 percent of the world economy. The grouping supports developing countries and the global south and tries to balance the global economy against the Western monetary and banking system.

The BRICS has tried to counter the Western financial entities like the World Bank and the International Monetary Fund by establishing the New Development Bank and a shared currency reserve.

Some experts believe that the global economy is shifting to a multipolar system, where emerging economies can play a more important role and the BRICS is a big force moving towards that end.

Iran’s unique geographical position and its capacities in the fields of energy, transit, and trade have caused the BRICS members to pay special attention to Iran, as a golden route to connect the East to the West.

Iran joined the Shanghai Cooperation Organization (SCO) in December last year and joining the BRICS can be a booster to Iran’s economic diplomacy which is aimed at neutralizing Western sanctions.

Source: IRNA, Jun 26, 2022. https://en.irna.ir/news/84802196/Iran-gains-attention-in-BRICS-summit

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Iran’s membership will add value to BRICS

Following is an edited extract of a commentary from the Tehran Times headlined “Iran weighs benefits of BRICS membership”:

Feng Xingke, secretary-general of the World Financial Forum and director of the Center for BRICS and Global Governance, has told the Global Times that including Iran in BRICS will mean closer and more effective channels between resources and markets, which will benefit all members.  

Recently, Iran applied to join BRICS, a group consisting of Brazil, Russia, India, China and South Africa. On a global level, this forum represents 40% of the world population and 26% of the world economy. According to IMF data, China has the largest economy in this grouping and accounts for more than 70% of the BRICS total worth of around $27.5 trillion, while India comes in second at 13% and Russia and Brazil comprise the remaining 7%.  

Now with Iran’s entry, more value will be added to BRICS as it holds around a quarter of the Middle East’s oil reserves and second-largest global gas reserves. Invited to a virtual meeting of the BRICS summit, Iranian President Ebrahim Raisi has delivered a speech expressing Iran’s readiness to share its vast capabilities and potential to help the BRICS countries attain their goals. 

Around the same time that Tehran joined two-day talks in Doha to resuscitate the Joint Comprehensive Plan of Action (JCPOA) deal between Iran and the United States which ended without any positive result. Apparently losing hope of normalizing its ties with the Western bloc, Iran could be exploring alternate options to survive economically under the current U.S. sanctions.  

Since joining the Shanghai Cooperation Organization (SCO) last year, this participation in BRICS is Iran’s second step toward the East. Feng Xingke, secretary-general of the World Financial Forum and director of the Center for BRICS and Global Governance, told the Global Times that including Iran in BRICS will mean closer and more effective channels between resources and markets, which will benefit all members.  

Discussing the motive behind this move, Hamidreza Azizi, CATS Fellow at the German Institute for International and Security Affairs in Berlin, told Al-Monitor, “The Rouhani administration was trying to pursue a balanced foreign policy and believed that having normal relations with the West is the key to expanding relations with the East and vice versa. But since President Raisi took over last year, Iranian foreign policy has increasingly become anti-Western….” 

Consequently, he said, “Iran’s moves to join different non-Western groupings, from SCO to BRICS, are presented as the inevitable path the country needs to take in a world in which the West is experiencing a political, economic and moral decline. In that sense, even the JCPOA if revived is a tactical solution, while Eastward policy is of strategic nature.” 

What can BRICS offer Iran? 

A European diplomat posted in Islamabad told Al-Monitor, “Tehran is aware of the great potential members have to establish an independent financial mechanism to neutralize Western attempts to impose their policies, in particular, to challenge the Swift mechanism, whose availability for Iran on the short/medium term will be strictly linked to the future of the nuclear talks.”  While the diplomat thought it would be difficult difficult to get full benefits from BRICS without the complete lifting of Western sanctions, nevertheless the potential of the Iranian economy is huge.

Azizi,who takes a more negative view, argues that there is not much Iran can get from BRICS in trade and economic relations in the short to medium term as long as US sanctions continue.

However, considering Iran’s chemistry with Beijing and Moscow, Ashok Swain professor of peace and conflict research at Uppsala University in Sweden, observed that “Iran will benefit considerably by joining BRICS, as it does not intend to be an ally of the West and its relations with China and Russia are more as a junior ally, not as a competitor. As part of BRICS, there is a lot for Iran to gain, economically and diplomatically.” 

Ultimately, BRICS could become a club of the world’s largest energy producers and consumers outside the United States. For a while, the forum has been working on a mutual payment system, credit rating agency, currency bank and reserve mechanism. In this way, member countries might escape U.S. sanctions.  

Source: Tehran Times, 13 July 2022. https://www.tehrantimes.com/news/474672/More-value-will-be-added-to-BRICS-if-Iran-joins-commentary