INDONESIA JOINS BRICS
- Indonesia is the first Southeast Asian country to join the BRICS on January 6, 2025 which is made up of emerging economies, alongside powerful emerging economies like Brazil, Russia, India, China, and South Africa.
- This development comes as Indonesia sets an ambitious target of achieving 8% GDP growth, a goal that would position the country among the world’s fastest-growing economies.
- With its entry into the BRICS Plus bloc—an expanded version of BRICS—Indonesia aims to unlock new economic opportunities, attract foreign investment, and strengthen its global position.
- The original member countries of BRICS were Brazil, Russia, India, and China.
- South Africa joined in 2010, and in 2024, Egypt, Ethiopia, Iran, and the United Arab Emirates became official members while Argentina declined and Saudi Arabia has not yet formally accepted.
WHAT IS BRICS?
- BRICS was formed in 2009 to represent emerging economies with a goal of reshaping global governance and challenging the dominance of Western-led institutions.
- Over the years, the group has expanded.
- The recent inclusion of countries like Egypt, Ethiopia, Iran, and the UAE as part of BRICS Plus has significantly boosted its economic footprint and influence.
KEY FACTS ABOUT BRICS PLUS
- Global Trade: Accounts for around 24% of global trade.
- Economic Impact: Represents 28% of the world’s GDP.
- Global Partnerships: By 2022, BRICS Plus had become the main trade partner for 28% of countries worldwide.
- Indonesia’s entry into BRICS strengthens its role within this influential bloc, providing the country with greater access to trade, infrastructure financing, and technological collaboration—all of which are essential to reaching its ambitious economic goals.
WHY DID INDONESIA JOIN BRICS?
- Strengthening Economic Partnerships:
- Indonesia’s President Prabowo Subianto recognizes that long-term growth requires diversified trade relationships and increased foreign investment.
- Membership in BRICS opens access to new markets in Asia, Africa, and Latin America, helping Indonesia expand its non-traditional trade partnerships and reduce its dependence on Western markets.
- Infrastructure and Financing Opportunities:
- Infrastructure investment is critical to achieving Indonesia’s growth target.
- By joining BRICS, Indonesia can access low-cost financing through the New Development Bank (NDB), which focuses on funding infrastructure projects in member countries.
- Large-scale infrastructure projects, including ports, railways, and roads, are needed to support Indonesia’s ambitious growth plans.
- Advocating for the Global South:
- As a BRICS member, Indonesia has a platform to advocate for the interests of emerging economies in the Global South.
- Jakarta aims to influence global policies on sustainable growth, fair trade, and access to technology, all of which are crucial for achieving its economic goals.
- Attracting Investment:
- With BRICS Plus representing nearly a third of global GDP, Indonesia’s membership increases its appeal as an investment destination.
- Partnerships within the BRICS bloc can help Indonesia stimulate key sectors like energy, manufacturing, and technology, which are vital to its economic growth.
INDONESIA’S TRADE DYNAMICS WITH BRICS
- Trade Volume and Growth Potential:
- As of 2024, Indonesia’s trade with BRICS nations reached approximately $150 billion, demonstrating the importance of BRICS as a trade partner.
- Expanding this trade is crucial for Indonesia’s target of an 8% GDP growth, as it needs to significantly increase its exports.
- Key Exports to BRICS Countries:
- Palm Oil: A major export to markets like India and China.
- Coal and Natural Gas: Supporting energy security in BRICS countries.
- Rubber: Widely used in industrial and automotive applications.
- Key Imports from BRICS Countries:
- Machinery and Electronics: To aid in Indonesia’s industrialization
- Chemicals: For growing agricultural and manufacturing sectors.
LINKING BRICS MEMBERSHIP TO INDONESIA’S GROWTH AMBITIONS
- Infrastructure Development:
- Achieving 8% GDP growth requires massive investment in infrastructure, including new roads, ports, and railways.
- BRICS financing, particularly through the New Development Bank, can support these efforts, especially with China’s expertise in infrastructure development.
- Technology Transfer and Industrial Growth:
- BRICS membership offers Indonesia opportunities for technological collaboration, particularly in renewable energy, artificial intelligence (AI), and digitalization.
- These technological advancements could help modernize Indonesia’s industries, improving productivity and global competitiveness.
- Trade Diversification:
- By engaging more with BRICS Plus, Indonesia can reduce its reliance on traditional markets like the S. and the EU.
- Diversifying its export base will ensure that Indonesia’s economy remains resilient and sustainable in the long term.
BRICS MEMBERSHIP AS A CATALYST FOR GROWTH
- While BRICS membership opens up new possibilities, Indonesia will need to implement structural reforms and navigate geopolitical complexities to ensure that these opportunities translate into tangible economic gains.
- Active participation in BRICS will not only contribute to Indonesia’s growth but also help shape the future of global economic governance, offering a platform for emerging economies to collectively pursue equitable development.
Note: Connect with Vajirao & Reddy Institute to keep yourself updated with latest UPSC Current Affairs in English.
Note: We upload Current Affairs Except Sunday.
