Jakarta, Indonesia Sentinel — Indonesia’s decision to explore full membership in the BRICS bloc has caught the attention of many, not as a mere trend, but as the outcome of a comprehensive evaluation conducted by the Indonesian government. The Ministry of Foreign Affairs of the Republic of Indonesia emphasized that this step is part of an effort to expand Indonesia’s role in various international forums, particularly those where emerging economies hold significant sway.
BRICS—an economic bloc comprising Brazil, Russia, India, China, and South Africa—represents a substantial economic force. Its members collectively account for nearly half of the world’s population and contribute a significant share to the global economy. This economic potential aligns well with Indonesia’s need to expand market access and enhance economic cooperation on the world stage.
But what are the core objectives of BRICS, and how can Indonesia capitalize on them? This article delves into the economic benefits, geopolitical challenges, and opportunities Indonesia can leverage as a developing country within this influential group.
BRICS: History and Core Objectives
BRICS was first conceptualized by Goldman Sachs economist Jim O’Neill in 2001, initially comprising Brazil, Russia, India, and China. South Africa was added in 2011, completing the current grouping. The primary purpose behind the formation of BRICS was to strengthen cooperation among developing nations, providing a counterbalance to the economic dominance of Western powers.
The key objectives of BRICS include fostering a multipolar world order, reducing dependence on the US dollar, and enhancing economic collaboration among member countries. These goals resonate deeply with Indonesia’s aspirations to elevate its global standing, particularly in terms of international trade and finance.
Economic Benefits for Indonesia
Indonesia’s potential membership in BRICS opens up significant economic opportunities. According to data from the United States Institute of Peace (USIP), BRICS accounts for 28% of the world’s economic output. This figure underscores the immense potential for expanding Indonesia’s export markets and attracting investment. Furthermore, BRICS advocates for trade using local currencies, reducing reliance on the US dollar—a move that could benefit Indonesia in the long term by stabilizing its currency exchange dynamics.
Intra-BRICS trade has seen remarkable growth, with trade between member countries increasing by 56% from 2017 to 2022. For Indonesia, this surge presents a promising opportunity to strengthen ties in sectors such as energy, agriculture, and other key industries that are critical to the nation’s economic development.
New Development Bank: An Alternative Financial Solution
One of BRICS’s standout features is its own financial institution, the New Development Bank (NDB). The NDB offers financing for infrastructure projects, providing an alternative to Western-led financial institutions like the World Bank. Since its inception, the NDB has approved 96 projects worth a total of $32 billion, with a focus on development in member countries.
For Indonesia, membership in BRICS would provide access to more affordable funding options for infrastructure development, as well as support for sustainable growth initiatives. The flexibility and inclusivity of NDB, as compared to traditional financial institutions, offer Indonesia a valuable resource for its long-term development goals.
Challenges to Consider
While the potential benefits of joining BRICS are substantial, the move also comes with challenges. Indonesia must ensure that it does not become merely a market for the products of other BRICS members. Without a strategic approach, Indonesia could find itself at a disadvantage in trade negotiations, especially in sectors where it competes with other members.
Another key concern is the geopolitical dynamics within BRICS. With countries like China and India holding significant influence, internal tensions may arise that could impact the stability of the bloc. Indonesia’s policy of maintaining an independent and active foreign policy will be crucial in navigating these complexities and ensuring that its participation in BRICS remains beneficial.
Indonesia’s 2024 State Budget (APBN) Deficit Rp507.8 Trillion, Lower Than Projection
Strategic Steps Toward Full Membership
As an “interested country,” Indonesia is currently undergoing a comprehensive process to join BRICS as a full member. This accession process involves detailed assessments of the benefits and risks, along with adjustments to Indonesia’s economic and diplomatic policies. By adhering to the principle of an independent foreign policy, Indonesia aims to use this opportunity to strengthen its position on the global stage.
The road to full BRICS membership is a carefully calibrated one, with Indonesia set to benefit from both the economic opportunities and diplomatic engagements it brings. By continuing to leverage its active role in international forums, Indonesia can position itself as a key player in shaping the future of global governance and economic cooperation.
In conclusion, Indonesia’s pursuit of BRICS membership is not merely a political move but a calculated strategy to enhance its economic position and international influence. While challenges remain, the potential benefits make this a timely and significant step toward a more robust global presence. As the world moves towards a multipolar order, Indonesia stands to gain significantly from its involvement in BRICS, positioning itself as a pivotal force in shaping the future of global economic relations.
(Becky)
