Jayanty Nada Shofa, Jakarta – Indonesia should not rush into joining BRICS as there are still no clear economic benefits that come from being part of the group that encompasses Brazil, Russia, India, China, and South Africa, according to an expert.
An expanded BRICS has been making headlines since the group's annual summit in Johannesburg last week. BRICS decided to welcome Iran, Saudi Arabia, Egypt, Argentina, the United Arab Emirates (UAE), and Ethiopia into the family. The six countries will all formally become new members next year.
Indonesia says it is still making some calculations before submitting its BRICS application. As Indonesia ponders its decision, senior economist Yose Rizal Damuri said that a BRICS membership lacked economic boon to the members.
"Indonesia will get little to no economic benefits from being a BRICS member," Yose, who also serves as the executive director of the think-tank Center for Strategic and International Studies (CSIS), told a media briefing in Jakarta on Monday.
BRICS initially came into existence in 2009, although South Africa only acceded to the grouping a year later. According to Yose, India and China are the only BRICS members who have witnessed robust economic growth over 2010-2022. Russia, Brazil, and South Africa have been growing in a stagnant manner.
He added: "Indonesia's [economic] performance is even surpassing [those three countries]."
The intra-BRICS trade has not been significant in number. Yose revealed that BRICS only accounted for 11.4 percent of the members' collective global trade in the pre-pandemic era. The number slightly rose to 11.9 percent in the post-pandemic period.
"We have to look at this carefully. [BRICS' trade] is largely centered on China. This shows how China has become an important hub for BRICS. ... And I doubt India wants China to remain a pivotal hub. India is also wary of a bigger BRICS becoming a mouthpiece for China," Yose told reporters.
Yose also compared Indonesia's situation to new member Argentina.
"Argentina is seeking a BRICS accession because it wants to find a solution to its macroeconomic problems. We are not in the middle of such a situation. So from an economic standpoint, there is no urgency for Indonesia to pursue a BRICS membership," he said.
Despite his criticisms, Yose said the group's New Development Bank (NDB) "deserves a thumbs up". As the name suggests, the NDB is BRICS' financial institution and has approved $32 billion in financing since it began operations in 2015. The money largely goes to sustainable projects.
"BRICS' accumulated financing may be small, compared to the World Bank. Today, most of the financing comes from China. But we will likely see the numbers grow following an expanded BRICS, especially with Saudi Arabia and UAE in the club. Although NDB still needs to work on its governance," Yose told the forum.
President Joko "Jokowi" Widodo last week attended BRICS's 15th annual summit in Johannesburg. In a recorded press statement, Jokowi said that Indonesia had yet to submit its letter of interest for a BRICS membership.
"We would like to make the necessary calculations first. We do not want to rush things," Jokowi said in the video. "Indonesia has robust economic ties with the five BRICS members," he added.
Government data shows Indonesia-China trade stood at $133.6 billion in 2022. Indonesia's bilateral trade with India amounted to $32.7 billion last year. Jakarta's trade figures with the remaining BRICS members throughout 2022 were as follows: Russia ($3.6 billion), South Africa ($3.3 billion), and Brazil ($5.4 billion).
ASEAN, of which Indonesia is chairing this year, has established robust economic cooperation with China. All 10 ASEAN members and China are part of the world's largest trade pact, the Regional Comprehensive Economic Partnership (RCEP). India was an original negotiating member of the RCEP, but opted out of the negotiations in 2019 before the agreement reached completion the following year.