BY: Hana Saada
Algiers, August 23, 2023 – The prospect of Algeria’s inclusion in the BRICS (Brazil, Russia, India, China, South Africa) alliance has stirred up discussions about the nation’s potential to leverage this strategic alliance for economic growth and diversification. While joining the ranks of these emerging economic giants presents both challenges and opportunities, economists and analysts see a promising future for Algeria’s economy within this global powerhouse.
Economist Mustapha Mekidèche, former Vice-President of Cnes, emphasizes the importance of Algeria carving its own strategic path within the BRICS coalition. “Algeria has already laid the groundwork for its economic emergence and diversification,” stated Mekidèche in an interview with Algeria Today. He asserts that Algeria possesses a unique vision that aligns with the BRICS nations, focusing on co-production, technology, and diversification of its growth engines and international partners.
One notable facet of Algeria’s prospective BRICS membership is its potential to expand its inter-African trade footprint, reestablish itself as a significant energy supplier to Europe, and foster innovative collaborations in mining, industry, and agri-food sectors with Russia and China. “Algeria’s aim to transcend its dependence on hydrocarbons by seeking co-production and technology aligns with BRICS countries’ appetite for energy and raw materials,” explained Mekidèche.
With Algeria’s solid macroeconomic foundations and an increasingly favorable business environment, observers predict that joining the BRICS could result in a sevenfold to eightfold increase in foreign direct investments (FDI). Such growth could position Algeria as an emerging economic power within the Mediterranean region, showcasing its untapped assets and economic potential on a global stage.
Diversifying partnerships and expanding trade are essential components of Algeria’s economic agenda. The nation’s existing partnerships with China and Russia underscore its intent to establish multifaceted relationships with BRICS members. Mekidèche envisions extending this strategy to encompass Brazil and India as well. Collaborations could span various sectors including technology, energy, agri-food markets, industrial, digital, petrochemicals, fertilizers, aeronautics, and more, fostering a dynamic and mutually beneficial economic exchange.
While BRICS doesn’t function as a traditional free trade zone, Mekidèche characterizes it as a geopolitical entity. As trade and cooperation intensify within the BRICS alliance, the need for a set of guiding principles and rules becomes apparent. Mekidèche highlights the importance of constructing an architecture of exchanges among member nations to accommodate evolving collaborations and priorities.
The emergence of the BRICS New Development Bank (NDB), established in 2014 and headquartered in Shanghai, is a potential game-changer for Algeria. The bank provides access to finance, promoting trade growth, and offering an alternative financial system to the US dollar and the Swift international network. Algeria could tap into the NDB’s resources to fund significant infrastructure projects, independent of the constraints associated with Western banks.
“By joining the BRICS and leveraging our participation in the Shanghai bank, we can bolster exchanges that complement our ongoing collaborations with Russia and China,” remarked Mekidèche. This suggests that Algeria’s inclusion in BRICS could catalyze a new era of economic development and diversification, fostering stronger partnerships and opening doors to strategic investments.
As Algeria contemplates its potential membership in the BRICS alliance, economists, policymakers, and analysts envision a future where Algeria becomes an integral player in the consortium, shaping the trajectory of the nation’s economic growth and opening doors to new partnerships that could reshape its economic landscape.
