For cash-strapped Egypt, membership of Brics could potentially be something of a boon, but Cairo will have to take its balancing act up a notch or two if it is to mitigate a possible backlash from its western benefactors, particularly the United States, its patron for more than a half century.
The Arab world's most populous nation, Egypt warmly welcomed the invitation for membership extended on Thursday by founding members Russia, China, India, Brazil and South Africa. Other countries invited include Saudi Arabia, the United Arab Emirates, Argentina, Ethiopia and Iran.
President Abdel Fattah El Sisi, who has forged close ties with Russia and China since taking office in 2014, was elated over the invitation. “I value the announcement by Brics on inviting Egypt to join effective January 2024 and we take pride in the confidence of its members,” he said in a statement.
“We look forward to co-operate and co-ordinate with the member states going forward,” he said.
His finance minister, Mohammed Maait, was equally upbeat.
“Membership will bolster investment opportunities, exports and foreign currency inflows," he said. “We are looking forward to Brics becoming a strong voice for the world's emerging economies.”
The membership invitation could not have come at a better time for Egypt, which has been grappling with its worst economic crisis in decades, something for which Mr El Sisi insists his government cannot be faulted. Instead, he places the blame on the fall-out from the coronavirus pandemic and the Russia-Ukraine war.
Egypt's pound has shed about 50 per cent of its value since March last year. A persistent dollar crunch has suppressed imports, causing many shortages, especially of material needed for local industries. Inflation is at record levels and a rapidly growing foreign debt has become increasingly difficult to service.
Egypt's economy is heavy on imports – the country, for example, is often the world's largest wheat importer – a fact that makes its dollar crunch deeply felt, whether by industrialists, consumers, retailers or even medical staff. In theory, Brics membership, could ease this situation, allowing Egypt to buy some of its needs from fellow members using local currency.
Egypt will also potentially benefit from a possible inflow of investment from other members, transfer of technology and increased exports.
“That will ease demand on the US dollar and rebuild trust in the Egyptian economy,” said a senior Egyptian official who requested anonymity. “Egypt can also reinforce its role as the gateway to Africa for fellow members, given its location and close ties with many African nations.”
But while Egypt is justifiably hopeful for a windfall from Brics membership, it will have to convince the more sceptical among its western backers that it has no intention of throwing to the wind decades of carefully built relations with the European Union and the United States, including extensive trade and security ties.
Egypt raised eyebrows in Washington and many EU capitals when it refused to join sanctions against Russia for invading Ukraine or downgrade its relations with the Kremlin. It has in the same vein stayed silent on China's human rights offences and unfair credit practices in Africa, as well as India's perceived persecution of its large Muslim population.
Returning the favour, neither Russia nor China ever publicly criticise Egypt over its human rights record. In contrast, the United States has on several occasions in the past decade partially withheld military aid over Cairo's alleged suppression of the freedom of expression and the jailing of critics.
Furthermore, Egypt has had multibillion-dollar deals with Moscow to buy arms, including jet fighters and assault helicopters and awarded a Russian company a multibillion-dollar contract to build its first nuclear power station.
These moves, particularly the arms purchases, have left the United States dissatisfied given that it has maintained a generous military aid programme for Egypt since the 1970s – it currently runs at $1.3 billion a year – and shares with Cairo counterterrorism efforts in the region and beyond.
“Egypt has traditionally created a multiplicity of partnerships for its diplomacy, wanting to assert its independence. It is now trying to lower its dependence on the US and has already been testing this,” said Michael Hanna, the New York-based director of the US programme at the think tank Crisis International.
“The most Brics can do is somewhat diminish the global role of the US dollar. But I don't think Washington is too worried. There is no alarm in Washington over what Egypt is doing. Just concern.”