4 November 2023 - 11:14
  • News ID: 632526
BRICS membership boosts Iran’s bargaining power 

The BRICS group of nations recently decided to invite six countries – Argentina, Egypt, Iran, Ethiopia, Saudi Arabia, and the United Arab Emirates – to become new members of the bloc. The debate over expanding the BRICS bloc, comprising Brazil, Russia, India, China, and South Africa, topped the agenda at a three-day summit held recently in Johannesburg. One may wonder how China and Russia have been instrumental in this decision. Mohammad Sadeq Jokar, the head of the Institute for International Energy Studies (IIES), tells “Iran Petroleum” that Iran’s BRICS membership would chiefly bolster Iran’s international haggling power. The following is the full text of the interview:

How have the international order and shift in paradigms by various countries affected the expansion of such groups as BRICS in the new century?
Since the very start of the current century, a new block-making trend has been underway in the world. Several countries, based on their political and economic conditions, were potentially able to become new powers in the world. Chief among them were China and Russia, who sought a multipolar world. In those years, President George Bush was pursuing certain approaches, but the US invasions of Afghanistan and Iraq in the aftermath of the 9/11 attacks further cleared the way for a unipolar world. Although the US was proceeding with a unipolar world, other nations were pursuing the democratization of economic bodies to render the world multipolar as they saw US unilateralism as a threat to the entire world. From the very beginning, the IIES was studying the matter very closely. BRICS was specifically significant for us because these five nations were on the way towards economic development with their share of the global economy rising. Therefore, for energy-rich Iran, it was important to focus on BRICS, four of whom are energy importers. After reviewing various aspects of BRICS in the early 2010s, the IIES put forward 4 scenarios about the future of this group – weakening, collapse, becoming a military block, and development into an economic bloc. The most important scenario was focused on the point that BRICS would become a more organized economic bloc that would develop within the framework of standardization. That is now proving to be true given the BRICS group’s decision to integrate six new members. BRICS member states assert they act in compliance with global norms, seeking no conflict and looking instead for establishing order and justice to end injustice in decision-making in international power-sharing and countering pressure and unilateralism. That has been the case over the past 10 years.

What advantages will Iran gain through BRICS membership?

Since taking office, the 13th administration has constantly focused on having no biased tendency towards East and West. While continuing nuclear talks to restore the JCPOA, it is in talks with China, Russia, and other nations considered as non-Western. The general approach adopted by the 13th administration is for Iran to diversify its trading partners. That can help Iran in its talks with foreign parties because they know that they would not be the sole option for Iran. However, in some historical periods, due to Western governments’ excessive demands, our main partners may be Eastern governments, but in general terms, Iran does not seek any confrontational approach towards either party. Iran’s interaction with the West in the past has shown that the more Iran can offer options the higher Iran’s bargaining power would be. Iran is seeking no conflict with either East or West; rather it intends to strengthen its levers to boost its power of bargaining on both sides. Iran believes that at the end of the day, East and West seek their interests. Iran could not reach its objectives without interaction with other nations and therefore it will cooperate with them within the framework of its national interests.

Can Iran’s BRICS membership also help its economic conditions in case sanctions are lifted?

Because BRICS’ top priority is to enhance economic ties, one instrument would be to develop a dollar-free financial system to de-dollarize financial transactions. Of course, it would take time before reaching an integrated financial system or common currency; however, some steps are taken in such a direction that could facilitate transactions. Given the fact that Iran is under US sanctions, which restrict its financial transactions, BRICS membership would enable Iran to join in transactions with its national currency. The key point is that China, the UAE, and Brazil are Iran’s key trading partners.

What opportunities can Iran gain in the energy market through BRICS membership?

BRICS members are either major energy consumers like China, India, and Brazil or are top energy producers like Iran, Russia, Saudi Arabia, and the UAE. The countries that have already been BRICS members and the new ones will suffer from energy transition and this issue is highly significant for Iran, which is a top oil and gas producer in the world. Energy consumers feel that if the energy transition becomes a binding regime to require all nations to cap carbon emissions they could not catch up with the pace of the transition and they would suffer. Fossil fuels are still a key element of the fuel mix of India and China and these countries cannot quickly shift to renewable energies. Meantime, on the supplier side, if the share of production and export of fossil energies drops in the global energy mix, they would lose their export revenue which drives their economy. Therefore, in a bid to minimize losses from the transition from fossil fuels to renewables, BRICS can have internal cooperation. Another point with energy is that the US has slapped restrictions and bans on cutting-edge technologies, mainly those used for alternative energies like hydrogen and helium. Therefore, BRICS members, none of whom allied with the US, can cooperate for the development of technologies.

What should Iran do to make maximum profits from this opportunity in the global energy market?

We need to make efforts to avoid repeating our past mistakes. In the past, when a relief like the JCPOA occurred, economic bodies could not follow its economic achievement and a political and security opening did not turn into an economic relief. There are many cases in point. For instance, former foreign minister Javad Zarif told MPs that the JCPOA had created a relief that was not efficiently utilized by economic bodies. International relief may not last long, but if joint economic interests are developed between nations, even in the absence of political relief, economic cooperation would not allow any conflict. Nonetheless, economic bodies in Iran are very slow in planning and they cannot go ahead in keeping with relief. We also created a geopolitical opportunity under the former administration when Qatar was boycotted by several countries and faced the risk of regime change. Iran was among the countries to offer geopolitical relief to Qatar. Alas, economic bodies in Iran did not properly benefit from it. The JCPOA was in effect for two years and many economic bodies could benefit from it, but in practice, they were entangled in bureaucratic red tape. Therefore, if we intend to benefit from this change, we should resolve such problems. Everything has to be mutual. For instance, if Iran and Saudi Arabia are broadening their ties, they should specify economic cooperation. Of course, to increase interaction with BRICS member states we need to know the atmosphere quite well, distance ourselves from idealism, and adopt a realistic approach towards expanding economic ties. We also need to take a creative look at BRICS’ potential and shun pessimism.

What political and economic opportunities would be introduced to Iran?

Overall, it could be argued that Iran’s BRICS membership can be instrumental with regards to transactions, transfer of technology, and market share. I mean that a hybrid network would be created for energy exchanges, which would then expand to the economic sector. However, the most important opportunity is the non-energy sector as Iran’s membership of BRICS or any other international body would bolster its political haggling power, in which case the country would have a higher chance of improving its cooperation even without the JCPOA and always have the upper hand in talks. In the short term, Iran can benefit from BRICS membership to increase its oil market share without using dollar transactions and have access to its income. BRICS is developing regimes that would allow Iran to use its national currency in transactions and accelerate its trade. That would be more significant than an increased market share for Iran. BRICS is expected to facilitate the development of cooperation as an alternative body without stoking up conflicts. Another point about BRICS membership is that the processes and procedures of member states should show maximum cooperation with the entire body. Therefore, expansion of the business atmosphere and facilitation in these fields and the similarity of rules and regulations would be largely helpful. Iran’s BRICS membership would add to Iran’s weight in the political, economic, and social future of the world. The 13th administration is moving properly on this path. Other sectors should draw up plans to benefit from this opportunity.

News ID 632526

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