Exploring the Drive Behind Algeria’s Bid to Join BRICS: Analyzing Geostrategic Motivations, Economic Aspirations, and Global Implications

BY: Hana Saada

ALGIERS- In a move that could reshape its international alliances and bolster its economic prospects, Algeria has formally applied to join the BRICS alliance, seeking to end its suspended membership status. This strategic decision comes on the heels of Algerian President Abdelmadjid Tebboune’ state visit to China, where he announced the application to join the BRICS bank as a contributing member with a substantial $1.5 billion investment.

Strengthening Ties and Financial Opportunities

Algeria’s eagerness to align itself with the BRICS nations—Brazil, Russia, India, China, and South Africa—stems from its desire to solidify relations with influential global players. This alliance would particularly strengthen its bond with China and Russia, both of which are core members of BRICS. This is of paramount importance for Algeria, as it seeks alternatives to Western countries for foreign investments. China, with its ambitious Belt and Road Initiative, offers a lucrative opportunity for Algeria to tap into its economic prowess and infrastructural projects.

The New Development Bank (NDB), a crucial institution established by BRICS in 2015, has created a platform for member countries to pool resources and invest in development projects. Algeria’s membership could pave the way for increased financial opportunities, particularly as the NDB seeks to expand its fundraising and lending operations in local currencies.

Originally founded with a substantial injection of $10 billion in paid-up capital contributed by each of the BRICS nations, the National Development Bank stands poised to significantly expand its financing capabilities. As the institution looks towards the future, it warmly welcomes the infusion of capital from prospective new member countries.

“Algeria’s fervor stems primarily from its economic ties with China, which the country views as a pivotal alternative to Western nations for attracting foreign investments.” The term ‘BRICS,’ coined by a Goldman Sachs economist, represents Brazil, Russia, India, China, and South Africa, collectively accounting for 25% of the global economy and encompassing 42% of the world’s population.”

Ashok Swain, a Professor of Peace and Conflict Research at Uppsala University in Sweden, shared with The New Arab an intriguing insight: approximately 22 nations have formally expressed their interest in becoming full members of the BRICS group, with a similar number making informal inquiries about joining. Among the standout contenders for membership are Argentina, Iran, Saudi Arabia, and the United Arab Emirates.

With a substantial 31.7% share of global GDP based on purchasing power parity, the BRICS consortium commands considerable influence due to its establishment of a dedicated bank and heightened trade activities among its constituent countries. Nevertheless, evaluations of the bloc’s accomplishments are a mix of praise and skepticism.

Given China’s role as the dominant economy within BRICS, it is plausible that Algeria’s recent pursuit of membership is partly fueled by the desire to secure Beijing’s endorsement. President Tebboune’s recent visit to China is indicative of this aspiration, yielding promising outcomes in the form of $36 billion in investment guarantees across Algeria’s manufacturing, technology, and agricultural sectors. Algeria’s comprehensive strategic partnership with China since 2014 situates it within China’s sphere of influence.

Michael Tanchum, a non-resident fellow specializing in the Economics and Energy Program at the Middle East Institute (MEI), affirms Algeria’ strategic outlook, stating, “Algeria’s keenness is closely tied to its economic ties with China, which Algeria views as a vital alternative to Western nations for investment sources.” Tanchum elaborates that Algeria has formally engaged with China in the ambitious Belt and Road Initiative.

Against the backdrop of Algeria’ status as a key energy and fertilizer producer, its GDP has surged to $168 billion, accompanied by an impressive growth rate exceeding 8% in 2022. “Despite facing economic challenges, Algeria’s geographic proximity to the European Union and the Middle East, coupled with its sizable consumer market and amicable relations with all BRICS member states, augur well for its ambitions,” Tanchum adds.

The path to BRICS membership appears relatively smooth for Algeria, considering Moscow’s earlier expression of support for its application. Algeria is favorably positioned to navigate its way into the group, with few significant barriers in sight.

“Algeria must strive to take the lead among the multitude of nations vying for BRICS membership, avoiding the risk of becoming entangled in the competition among applicants. This imperative is particularly pronounced in the context of Algeria’s rivalry with its regional counterpart,” Tanchum concludes.

Pros and Cons of Algeria’s Potential BRICS Membership

Algeria’s prospective membership in the BRICS group comes with both promising opportunities and potential challenges. This North African nation, led by President Tebboune, has expressed its intention to forge stronger partnerships with China and Russia, aiming to establish a new economic order that emphasizes parity and fairness among nations. However, as with any major decision, there are both positive and negative aspects to consider.

Pros:

1. Strengthened International Alliances: Algeria’s collaboration with China and Russia through BRICS could provide it with a stronger position on the global stage. This partnership may grant Algeria access to diplomatic and economic resources that could help it counterbalance Western pressures, particularly from countries like France.

President Tebboune took the lead as the inaugural speaker at the assembly, advocating for “a fresh economic paradigm characterized by equity and impartiality among nations.”

According to Swain, Algeria’s bid to join the BRICS group is a strategic move aimed at forging an alliance with China, thereby alleviating itself from Western pressures, notably from France. In addition, Algeria stands out among African nations for its steadfast opposition to military intervention in Niger. Much like the 40 other nations, Algeria perceives China as a significant global player and aspires to BRICS membership to adeptly advocate for its national interests within the realm of world powers.

2. Diversification of Funding Sources: Membership in the BRICS could open doors to financial support from the National Development Bank. This alternative funding option could potentially reduce Algeria’s reliance on traditional international financial institutions such as the IMF and World Bank, offering more flexibility in economic decision-making.

If Algeria successfully becomes a member of BRICS, it will mark the second instance of an African country joining the group; however, it’s important to note that while South Africa boasted a GDP of $353.26 billion in 2021, Algeria’s GDP is projected to reach approximately $206 billion in 2023, as per IMF projections.

3. Economic Growth Potential: President Tebboune’s assertion that joining BRICS would enhance Algeria’s economic strength holds merit. Collaborating with emerging economic powerhouses like China and Russia could lead to increased trade opportunities, technological transfers, and investment, potentially boosting Algeria’s economic growth.

Cons:

1. Controversies and Geopolitical Tensions:Algeria’s alignment with Russia could lead to political controversies, especially given its arms imports from Moscow. Possible backlash from countries like the United States and European Union may create geopolitical challenges, potentially affecting Algeria’s diplomatic relations and international image.

Merely a year ago, the resounding chorus of concern echoed across the US Congress as 27 bipartisan members rallied to address Algeria’s worrisome arms procurement from Moscow. Coincidentally, within the same time frame, allegations emerged that Algeria, as one of the “foremost four purchasers,” was inadvertently bolstering Russia’s financial prospects, as voiced by 17 representatives of the European Parliament.

Simultaneously, the year 2022 witnessed Algeria’s wheat acquisitions from Russia quadruple in comparison to the previous year. Intriguingly, despite mounting tensions, none of the BRICS nations opted to participate in punitive measures against Russia, citing an intricate web of economic interdependence that bound them to Moscow.

Algeria’s potential membership in the BRICS group presents a range of opportunities and challenges. The prospect of forming stronger alliances with China and Russia could open doors for economic growth and diversification. However, the country must carefully consider the potential controversies and economic disparities that may arise, as well as its ability to maintain a balanced approach to its international relations. Ultimately, Algeria’s decision to pursue BRICS membership should be weighed against its long-term national interests and its aspirations for a more equitable global economic order.

BRICS and the Quest for Economic Diversity and Global Influence

In the ever-evolving landscape of international economics and geopolitics, the BRICS nations have been steadily steering towards a path of economic diversification, enhanced financial autonomy, and elevated global influence. The group’s journey, marked by its fifteenth anniversary, has provoked both optimism and skepticism, prompting experts to assess its impact on the global stage.

Central to this narrative is the BRICS nations’ strategic move away from the dominance of the US dollar. Mirroring the trajectory of several emerging economies, Algiers too appears to be seeking alternatives to the US-dominated SWIFT payment system. This shift is not isolated; it echoes a broader trend within the BRICS consortium, where digital and physical currencies are explored to mitigate vulnerabilities to economic sanctions. However, the road to de-dollarization remains a complex one, as most member economies and prospective entrants are still inextricably linked to the US dollar. Despite aspirations, viable alternatives are not yet readily available.

The BRICS group, while pursuing these ambitious financial goals, also serves as a support regime for economies that have grappled with the International Monetary Fund’s (IMF) structural adjustment and austerity programs. This facet underscores its role in bolstering emerging economies that seek to navigate the complexities of the global economic order.

At its core, the BRICS union stands as a testament to the collective potential of Brazil, Russia, India, China, and other potential aspirants. These nations are not only emerging markets but also hold considerable promise for substantial industrial growth. As the bloc collectively accounts for an impressive 31.7% of global GDP by purchasing power parity, its emergence as a formidable powerhouse is evident. This ascendancy is exemplified by the establishment of a dedicated BRICS bank and a notable surge in inter-member trade.

Nonetheless, the group’s accomplishments are subject to varied interpretations. While some commend its strides in reshaping geopolitics and the global economy, others view its potential to challenge Western hegemony and foster global multipolarity as topics of ongoing debate. With China’s growing political and economic clout, a stronger BRICS could indeed herald increased influence within the global order.

In light of its expanded representation of countries from the Global South, the BRICS consortium initially emerged as an alternative to the G7 nations. Yet, it has not emerged as a direct threat to the Western bloc. Rather than challenging the existing paradigm, the group’s primary focus remains on cultivating avenues for improved business relations, thereby complementing the broader international economic ecosystem.

As the BRICS nations celebrate their fifteenth year of existence, their journey symbolizes a pursuit of economic autonomy, diversified financial systems, and heightened global impact. Algiers’ aspirations towards de-dollarization and the broader BRICS nations’ efforts to break free from the clutches of Western financial systems exemplify their determination to forge their own destinies. While the path ahead may be complex, the BRICS story remains one of evolving potential and a collective drive to reshape the global economic and geopolitical fabric.

Navigating the Path to Membership

The road to BRICS membership for Algeria appears relatively unobstructed. Russia and China’s lack of objections to Algeria’s application signals a favorable outlook for its bid. This acceptance, coupled with Algeria’ strategic location near the European Union and the Middle East, robust consumer market, and amicable relations with existing BRICS members, place the North African nation in a favorable position to gain entry into the alliance.

Algeria’s pursuit of BRICS membership is driven by its economic ambitions, strategic partnerships, and the desire to diversify its foreign investment sources. Joining BRICS could unlock a world of financial opportunities and solidify relationships with influential nations like China and Russia. As the international community watches the evolution of this geopolitical dynamic, Algeria’s calculated move could indeed redefine its position on the global stage.