Will BRICS Open Its Arms to Iraq?

By Ali Kareem Ozheb

2023 has seen the announcement of a spate of invitations for potential accessions to BRICS—an emerging economic and geopolitical bloc currently comprising Brazil, Russia, India, China, and South Africa. On the heels of this, a number of other countries are also looking to join. Iraq is among them.

The possibility of joining the bloc offers Iraq the chance to boost both its economy and international stature. However, there are numerous obstacles to becoming a part of the club. These include Baghdad’s overreliance on oil exports and limited trade with some founding BRICS members. Such hindrances mean Iraq is unlikely to join the bloc any time soon.

Why accession matters to Iraq

After years of rumors of potential additions, BRICS—which took shape in its current guise in 2010—extended invites for six new members to join at its 15th summit last month. The gathering was held in Johannesburg in South Africa. Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates were offered to join the group from Jan. 2024.

The upcoming expansion has furthered BRICS’ importance as a key international economic grouping. This has whetted the appetite of other countries to jump on the bandwagon, including Iraq. Three invitees—Abu Dhabi, Riyadh and Tehran—are also close partners of Baghdad, spurring Iraq on.

Calls to join BRICS have been growing among sections of Iraq’s political elites, although only a handful of parliamentarians have been vocal about the topic. Most of the voices in favor of such a step belong to the Shiite Coordination Framework, a constellation of Iran-backed parties that forms the backbone of the incumbent government. But the idea is beginning to gain traction among other political actors too.

MP Zeinab Al-Mousawi, a member of the parliamentary Oil and Energy Committee, told Amwaj.media that joining BRICS should be high on Iraq’s agenda. The lawmaker, who is affiliated with the Coordination Framework, argued that such a move would bring many economic benefits.

Mousawi explained that the bloc’s members “are rich in oil, metals, rare minerals used in technological industries, and grains.” Iraq itself does not suffer from a shortage of certain resources, particularly petroleum. However, it lacks investment and planning capabilities to allow it to better utilize its natural wealth. Baghdad would benefit from the exchange of expertise with BRICS members. It could also improve its approach to managing its resources.

The Iraqi MP told Amwaj.media that joining the bloc would additionally increase Iraq’s economic independence. Of note, Tehran-Washington tensions have negatively impacted Baghdad financially. US authorities intermittently crack down on banking transactions to put pressure on alleged dollar smuggling, thereby also causing turbulence in the value of the dinar. Mousawi charged that through the expansion of new economic relationships, “The Iraqi economy [could] limit the dominance of the US dollar and free [itself] of Washington’s financial and trade restrictions.”

The current BRICS members may also find the opportunity of investing in Iraq appealing. Economist Dr. Abdul Samad Saadoun told Amwaj.media that Iraq could play a role as a major gateway to West Asia, leveraging its geostrategic properties.

Such matters have taken on more priority since the Iraqi government’s announcement of the Development Road or “Dry Canal” corridor. The 17B USD initiative aims to link Asia to Europe via highway and railway routes that would connect the southern city of Basra to Turkey. This could join up with existing initiatives of BRICS members—such as China’s Belt and Road Initiative—which also aspire to create better connections to Europe.

Iraq is also a market for consumer goods, which could be appealing to export-focused BRICS countries such as China and India. At the same time, Iraq’s need for infrastructure development provides opportunities for BRICS-based companies.

Potential blockages

But some voices in Iraq have expressed skepticism about the idea of Baghdad joining BRICS anytime soon. They point to the country’s financial situation as a hindrance, saying that Baghdad is unqualified to join the international economic bloc.

Economist and academic Ali Daadoush told Amwaj.media, “Iraq’s accession to BRICS would have to be conditioned on its compliance with the prerequisites of joining.” The economist explained that new members are expected to have rapidly growing economies. Other requirements include the adoption of economic reforms and boosting trade with existing bloc members. A diverse economy is additionally needed to enable “international cooperation in different fields,” he explained.

Presently, these conditions would be a struggle given Baghdad’s overwhelming reliance on oil to finance its budget; a phenomenon which led Daadoush to refer to Iraq’s economy as “unipolar.” In this vein, Mazhar Mohammad Salih, an advisor to the Iraqi government on economic affairs, told Amwaj.media that up to 96% of state revenues are generated through crude oil sales.

This dependence appears likely to last. According to official data, Iraq’s oil exports last year hit a record-high of 115B USD, with few indications of other significant revenue streams on the horizon. Daadoush charged that this reliance on oil means Iraq cannot comply with membership requirements at present, adding that it will “likely continue to not be able to do so for the next decade or more.”

Another issue is the lack of trade with some current bloc countries. Economist Daadoush noted that much of Iraqi oil exports go to BRICS members China and India. However, he also pointed out Iraq “has modest trade exchanges with Brazil, Russia and South Africa.”

Daadoush further charged that even if Iraq meets the required conditions for accession, “It will hit the roadblock” presented by “its lack of a production base”—pointing to the weakness of the country’s agricultural and industrial sectors. The latter means that Iraq would not be able to access loans and services from the BRICS-affiliated New Development Bank. To benefit fully from access to the capacities of the multilateral lender, Iraq would need to improve local industry and its competitiveness.

A way forward?

If Iraq was to join the bloc, changes would be needed for the Iraqi economy to sync with the economies of founding BRICS members. Daadoush charged that this would require the “introduction of real reforms that have a positive impact on the Iraqi economy and allow it to adapt to the activities of BRICS states.” This, however, brings its own challenges as BRICS countries are diverse in terms of economic structure. Iraq would need to be mindful of these considerations as it decides where to focus any alignment efforts.

Economist Saadoun agreed on the pressing need for reforms, elaborating that increasing trade exchanges with BRICS members could “boost Iraq’s status" in their eyes. However, Saadoun also warned that there are other challenges—including Iraq having to “maintain stable economic growth, adopt a sustainable and constructive development approach, and preserve internal social and political stability.” The volatility of Iraqi politics also limits interest in the country at present. “This is why we find that [BRICS members] are opening up to Egypt, Ethiopia, Iran, Turkey and Saudi Arabia, but have bypassed Iraq,” he concluded.

Joining an emerging multilateral grouping would offer Iraq a range of benefits—and present opportunities for both Baghdad and BRICS. But until blockages such as Iraq’s overreliance on oil and limited trade with some bloc members are addressed, the chances of Iraqi accession to the organization will likely remain slim.

Ali Kareem Ozheb is an award-winning Iraqi journalist with over 10 years of experience in covering economic affairs. He is a regular contributor to Iraqi and Arab outlets, including NRT, Al-Madar, Iraq Journal, Daraj and Al-Jazeera.

This article origianlly appeared at: amwaj.media