Six new countries will join BRICS (Brazil, Russia, India, China, South Africa) from 2024/1/1, i.e. Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, Emirates, and everyone is very impressed, growing total GDP from 25% to 36% of total world and being population about 4 billion, versus 800 million of G7, which produces about 46% of world GDP (105 trillion$).
By the way I know personally as a worker or as a tourist Argentina, my grandmother was from Azul, 70 km south of Buenos Ayres, Egypt, Iran. In Middle East I was working for quite a year in Jordan for a sugar beat project. The present BRICS have a total GDP of 27 trillion, 26% of world, of which 18 are from China, whose ambition is to be the leader of the bloc.
Total debt of present BRICS is about 19 trillion, so 70% of their GDP, thanks to Russia very strong official position with only 16% of GDP. The 13 trillion of China are very doubtful, because it seems not including Provinces and State Banks debts. Before talking of future leadership of the Bloc in the new configuration, let’s examine data of the entering countries and their geopolitical risks.
Argentina is the worse country. I remember the famous macroeconomist Dornbush speaking in Dallas about Argentina, saying. “It seems that all the Italian politician are at government in Argentina from the dramatic results” and after 20 years results are more and more tragic, with a GDP of 389 billion$ and 45 million people, the per capita is under 8000$. In 1948, my grandmother returned to Argentina with Vulcania ship to sell her properties, because a pesos value was 700 Italian Lire! Buenos Ayres was after the first World War at European GDP per capita. They talk again of dollarization and they have debt mainly swap with China of 97% of GDP. Political risks are also very high and we talk of Argenchina.
Egypt is a disaster economy, with 362 billion $ for 109 million inhabitants, so less then 4000$ per capita, and debts/GDP of 90%. Practically Egypt, except Suez and tourism is kept alive only by USA aids and military support. The level of living standards is horrifying, ashaming the tourists closed in the hotels. Political risks are very high with tradition of leaders assassination.
Ethiopia never quiet internally for intestine fights from the time of Italian government, is at 96 billion GDP, with a population of 120 million, so around 800$ per capita and debt/GDP of 60%. The recent violent conflict in Tigrai filled the country of blood, complicating relationships and immagine with international world. Again China is very present, but also Russia and Turkey seem to be supporting the country. Geopolitical position is very strategic and military presence of China in Gibuti is a testimony of that. China rebuilted also the new railway to Addis Abeba.
Iran has a GDP around 500 billion$ and a population of 88 million, so a per capita around 6000$, with a debt/GDP of 45%. The ambition of Iran to be a great power, substituting URSS in Central Asia, the accumulation of atomic know-how and basic nuclear materials for becoming a nuclear power, the continous pressure against Israel, all this makes this big country a high risk partner.
Saudi Arabia has a GDP of quite 800 billion$ and 36 million people, so about 22000 $ per capita, of course with enormous differences between elites and normal workers. Debt is very low, around 27% of GDP. Until yesterday they were the strongest friend of USA, now after China sponsored treaty with Iran, they seem more China oriented. In any case the ignobile war in Yemen is not finished until now. Gigantic urban plan of modernization of the country are the most recent government actions, but the substantial slavery of inmmigrated workers can produce instability.
Emirates (UAE) have a GDP of 400 billion $ and a population of 9 million, so a rich 40000$ per capita and debts about 16% of gdp. They are among richest States in the world, but geopolitical position is very weak, depending from some power support, USA or China.
So at a first glance it doesn’t seem that new entries empower a lot the BRICS bloc, accelerating its world leadership, through the demographic pressure and de-dolariztion financial approach. If before we should wait at least 50 years to assist to a change of leadership of the world, can be that now this target has been prolonged in the facts. Not considering all the cultural factors unifying G7 countries and the abysses of traditions, languages, education , violence, existing in this hypothetical Bloc.