Turkey is Joining the BRICS at the Upcoming Kazan Summit in Russia

Despite Türkiye being a prickly partner for post-2014 Russia, Turkish-Russian and Turkish-BRICS trade continues to expand. After years of being stung by rejection from EU membership and 'sitting in two chairs' geopolitically as well as economically, Ankara has chosen to join the rising Afro-Eurasia economic bloc. Whether BRICS membership can help alleviate roaring lira inflation through currency swaps and expanded use of cryptocurrencies in trade settlement much less on the Turkish street remains to be seen. Turkey will be the first NATO country to join the bloc--and likely not the last, if the European Union continues to decay and antagonize other countries dissenting from Brussels line like Hungary and Slovakia.

To follow up on his articles regarding Turkey's role in the International North-South Transport Corridors and Turkey's crypto-economy and crypto-currency laws, we asked our Cairo-based ESW MENA Editor Ahmed to provide a summary for our audience of what the BRICS are, and why the Turks joining the bloc is a very big deal.

-- James Smith

Editor-in-Chief and Publisher, ExitStrategy.World

September 11, 2024

Above photo credit: Ortakoy Mosque and Bosphorus bridge in Istanbul at sunrise, Turkey

Uploaded to iStock by Givaga Nov 2020

Multiple major media including Bloomberg have confirmed that Turkey intends to submit an application to join BRICS. In this article we will discuss many things, including what BRICS is, why Turkey would join BRICS, and other relevant topics in context.

First, before we talk about the significance of Turkey submitting an application to BRICS or why it would do so, it is important to know what the BRICS is in the first place.

BRICS--which stands for Brazil, Russia, India, China, and South Africa, is an economic bloc that was established in 2006 (initially as BRIC, the “S” came later in 2010). It is an economic bloc that was formed with the goal of promoting multipolar cooperation in various sectors, mostly economics and trade, but also with some involvement in politics. After launching the New Development Bank headed by former Brazilian President Dilma Rousseff it styles itself as a counterbalance to the World Bank and International Monetary Fund (IMF), two institutions that thrived during the post-Cold War unipolar world order of the US and Europe during the 1990s and 2000s.

Here are some other key facts about this unprecedented situation of a NATO member applying to join BRICS:

1- All countries in BRICS (before the addition of several members this year) represent about 40% of world population, and at least 25% of the entire global economy

2- Almost all countries in BRICS have some sort of an economic niche or sector they excel in – China with its industrial prowess, Russia with its armaments and energy sector, Brazil for the foodstuff (chocolate, coffee, bananas and many other crops) exports, etc…

3- Frameworks within BRICS and in related organizations such as the SCO allows for improved coordination against common challenges, such as terrorism, separatism, and so on (this mechanism already exists between nation-states, but having a common bloc allows for easier and more regulated frameworks).

4- BRICS has its own IMF-like bank by the name of the New Development Bank, which focuses on infrastructure projects inside countries of the bloc.

5- BRICS have annual summits, with this year's event October 22-24 in Kazan, Russia being the largest to date in terms of delegations, 54 countries are represented. The annual event is generally the only full summit they tend to have, events such as the BRICS games for sport and cultural summits are still in the works, but are not underway at the moment.

6- BRICS styles itself as a voice for “the Global South”, and advocates for reform in international institutions to be more representative of African, Latin American, and Asian countries, whether it will accomplish this and change the United Nations remains to be seen.

7- De-dollarization, use of local currencies such as rubles and rupees and perhaps even some pooled trade settlement currency, are tempting articles of the BRICS. This gives countries especially Russia, China and Iran alternatives to the US Dollar and the Euro, thus reducing Washington and Brussels leverage over many economic lifelines. Countries in BRICS have the option to trade in their own local currencies – this has already been implemented between Egypt and China with EGP/RMB swaps, and the UAE and China with AED/RMB, for example.

8. Proposed BRICS trade settlement currency -- There is talk of a united BRICS currency, but this has not yet been implemented, nor will it likely be in the near future. A common trade settlement currency and the related agreements are far more complicated fixtures than simple currency swaps or in cases of the most sanctioned powers Russia and Iran, bartering military goods.

As an example, Russia over the past 18 months has accumulated a large surplus of rupees thanks to Indian refineries reselling Russian crude oil to Europe, thus the Russians and Indians are working on schemes to have Russian firms spend this surplus on imports of Indian foodstuffs and pharmaceuticals. But the common trade settlement currency which was originally conceived as a Bancor (from the late British economist John Maynard Keynes) and which the Euro notoriously failed to equitably address between its member states--could prove highly attractive. Especially to Middle Eastern entrants Turkey and Egypt whose populations have suffered from chronically high inflation.

9. Getting back to geopolitical Influence, several BRICS nations are regional powers in their spheres, two countries – Russia and China – are permanent United Nations Security Council members for example, where such less-than-full-fledged alliances may be valuable. Turkey and Egypt as longstanding U.S. allies that nonetheless seek good to excellent relations with Russia and China are examples of such.

Photo credit: Istanbul. Panoramic view of the city, the Bosphorus Bridge, Ortakoy Mosque

Uploaded to iStock by Tereza Tarasova Jul 2021

Now turning to Turkish national interests, there are many reasons why Turkey would be interested in joining BRICS, including diversifying their economic partnerships. Having more trade partners and expanding trade is never a bad thing. More trade partners means more economic opportunities for Turkish companies, reducing their reliance on the weakening European markets, boosting an independent foreign policy, the aforementioned de-dollarization and geopolitical influence, and allowing for a more equitable global balance of power. More investments in infrastructure especially by the fast-building Chinese and development projects for historically less-prosperous regions after getting access to long-term NDB financing, strengthening relations with more countries, expanding Turkish influence in Central Asia and North and East Africa, achieving more economic and political leverage by being more connected to BRICS, and being a logistical and industrial hub for the BRICS goods flowing into Europe will bring many benefits to Turkey.

However, the most important thing to understand is the domestic political ambitions of the head of State. After a few years of 'zero problems with neighbors' policy, Recep Tayyip Erdoğan sought to expand Turkish influence directly through funding the Muslim Brotherhood which antagonized Egypt and Saudi Arabia (fueling the now resolved Saudi-Qatari spat), as well as so-called 'Bayraktar Diplomacy', which was named for the strike drones manufacturer founded by his son-in-law, Selçuk Bayraktar. Such policies included involving Turkish armed forces and managing proxies in the quagmires of Syrian and Libyan civil wars. Joining the BRICS can help Erdogan extricate himself from those failed policies – even if the extraction won't happen overnight, and millions of Syrian refugees in Turkey will not agree to repatriation but may try to get to Europe again.

Ankara joining the BRICS is also not all rainbows for Moscow and Beijing either, as Turkey remains a member of NATO. Considering the tensions between Russia and NATO and the Alliance's expansion into China's neighborhood via partnerships with Japan and the Philippines, Turkey could be considered by the Kremlin and Zhongnanhai a compromised BRICS member that should be kept at arms length. But such standoffish approaches could lead to negative consequences not only for Russian-Chinese bilateral or trilateral relations with the Turks, but for the BRICS bloc as a whole. Erdoğan himself announced this week that Turkey cannot and will not ever recognize the Crimean Peninsula as Russian rather than Ukrainian territory. Seeing how Chinese and Russian diplomacy will seek to mitigate these contradictions in the coming years will be a fascinating thing for us to observe.