BRICS and Azerbaijan: the path to expansion and new economic opportunities

by Leyla Tariverdiyeva

The BRICS Summit will be held in Kazan on October 22-24. According to Russian media reports, 32 countries are expected to attend the summit, and 24 of them will be represented at the level of heads of state. UN Secretary General Antonio Guterres, Secretary General of the Shanghai Cooperation Organization (SCO) Zhang Ming and other distinguished guests will also arrive.

The name BRICS is made up of the first letters of the names of the founding countries (BRICS - from Brazil, Russia, India, China, South Africa). An interesting fact is that the abbreviation BRIC was originally introduced into scientific circulation by British economist Jim O'Neill in 2001 in an article on the growth potential of Brazil, Russia, India and China. The BRICS group itself was founded in 2006, and in 2011 South Africa joined the original composition (Brazil, Russia, India and China). Egypt, Iran, the United Arab Emirates and Ethiopia have become full members of the organization since January 2024. Argentina was supposed to be among them, but after the change of power in the country, it withdrew its application.

BRICS began to appear frequently in the Azerbaijani media after it became known that Azerbaijan had officially applied to join the organization.

Azerbaijan first announced its intention in July this year at the SCO summit in Astana. Paragraph 4.5 of the Joint Declaration on the Establishment of Strategic Partnership between Azerbaijan and China, signed on the sidelines of the summit, indicates the desire of our country to join the BRICS. Baku's intention was met with a positive reaction from Beijing. Moscow also welcomed the decision of the Azerbaijani side to become a full member of the organization. Both powers assured Baku of their full support. The only obstacle is that the mechanism for admitting new members to the BRICS has not yet been developed. The founders of the association have different opinions on this matter. Given the rumors about India blocking Azerbaijan's invitation to the BRICS summit in 2022, it is quite possible to expect some friction on the issue of our country's membership. But these tensions, if anything, I think, will be regulated by Azerbaijan's leading partners in the organization.  

The expansion of the organization is expected to be one of the main topics of the current summit. 34 countries have already applied to join the BRICS. Among them, Azerbaijan, Turkiye, Belarus, Syria, Malaysia and other countries have officially applied to join the BRICS. Sri Lanka is going to do this on the sidelines of the summit in Kazan. Myanmar, Burkina Faso and many other States have announced their intention to join the organization.

The influx of those wishing to join the BRICS is explained by both geopolitical and geo-economic reasons. The most important factor is that one of the central figures is such a giant as China, which plays a significant role in world trade. According to experts, if all the invited countries had joined the BRICS, the organization would have covered 45 percent of the world's population, and even OPEC itself would have bypassed oil production. Already, the BRICS countries account for almost 30 percent of the Earth's territory, more than 30 percent of global GDP (in 2023 - 35.5 percent). According to the Russian Ministry of Finance, the share of the BRICS countries in global GDP is almost a quarter higher than the share of the G7 countries. In 2024, it will reach a record 36.7 percent. It should be noted that the share of the G7 is projected to be 29.6 percent. The average growth rate of the BRICS economy in the new composition in 2024-2025 will be 4.4 percent per year, with a global average of 3.2 percent. For comparison, the growth rates of the G7 countries are expected to reach 1.7 percent.

Given the increased interest in BRICS and the prospect of turning it into a global platform, it became necessary to develop criteria for membership in the organization. The issue of introducing the institution of partnership as a preliminary stage is being considered. It is expected that a step-by-step movement towards full membership will be developed. As the head of the Federation Council of the Russian Federation Valentina Matvienko stressed earlier, BRICS is not a club of interests. This is an association of like-minded people who have the same views on the development of international relations, who are against interference in the sovereign affairs of any state, who are in favor of international laws working, and not rules invented by someone.

If we talk about Azerbaijan's interest in BRICS, then it is completely natural. BRICS unites Baku's main trading partners and major investors in the Azerbaijani economy. Thus, in 2023, the trade turnover between Russia and Azerbaijan increased by 20 percent and amounted to $ 5 billion. In the first half of 2024, this figure has already exceeded the same figure last year and amounted to about 2.6 billion dollars. In terms of indicators, Russia is gradually catching up with China. In 2023, the volume of trade turnover between Azerbaijan and China increased by 43.5 percent and amounted to 3.1 billion dollars. In the first half of this year, the volume of trade reached $ 2 billion.

In September, Azerbaijan and one of the founders of BRICS - Brazil signed a memorandum of understanding in the field of agriculture, according to which the parties plan to create a joint venture, attract mutual investments, and jointly promote scientific and technological innovations in the agricultural industry. Azerbaijan is developing trade cooperation with Ethiopia, which became a member of the BRICS earlier this year, with Iran, Egypt, and the United Arab Emirates. The top ten countries that have invested the largest volume of direct investments in the Azerbaijani economy include three BRICS countries: Russia ($617 million), Iran ($396 million) and the UAE ($319 million).

Azerbaijan's interest is not related to the desire to join strong players and enjoy dividends. Our country has something to offer its partners. In particular, its strategic geographical location and the opportunity to become a bridge between the West and the East. The transport and logistics corridors passing through Azerbaijan and built on its initiative and in many cases at its expense did not allow world trade to stop. In conditions of geopolitical turbulence, the presence of such a partner as Azerbaijan will be a plus for any organization. As the head of the Russian State Duma Committee on International Affairs Leonid Slutsky noted, Azerbaijan will be one of the BRICS forwards.

The Organization does not stay away from the global climate agenda either. And her approaches are largely consistent with the position of Baku, which opposes the use of climate issues for political purposes and to suppress economic competitors.

At the end of August, the BRICS countries adopted a framework document on climate and sustainable development. The document includes aspects such as fair transition, adaptation, carbon markets, finance, science, and business engagement. According to the Ministry of Economy of the Russian Federation, the framework will allow the countries of the association to determine measures to combat climate change without compromising their economic well-being. The BRICS countries have spoken out against the green protectionism promoted by the West and for the support of developing countries. The declaration of last year's BRICS summit emphasized that the countries of the association oppose trade barriers, including those imposed by developed countries under the pretext of combating climate change. It was noted that measures taken to combat climate change should not turn into a set of means of unjustified discrimination.

Azerbaijan has adhered and will continue to adhere to the principles of neutrality. The application to join the BRICS does not mean that he has chosen someone's side. Azerbaijan is always on the side of equal partnership and mutually beneficial cooperation. The country has its own economic interests that go far beyond the borders of Azerbaijan. In the current geopolitical and geo-economic situation in the BRICS space, Azerbaijan could implement them most effectively.