Why does Turkey want to join BRICS?

Turkey's application for BRICS membership was confirmed last week. Similarly, Moscow announced that President Recep Tayyip Erdoğan will attend the BRICS leaders' meeting in Russia on Oct. 22-24. Ankara's request for participation will be discussed at the summit under the topic of enlargement. What does Turkey's participation in BRICS mean? Is it possible to get loans in local currency from BRICS? Is BRICS an alternative to NATO or the EU? We will look for answers to these questions in this column.

BRICS is not an organization, but a platform

One of the most common mistakes is to treat BRICS as an organization, perhaps confusing it with the Shanghai Cooperation Organization (SCO) or the Eurasian Union. However, BRICS, which held its first meeting in Russia in 2009, is a platform that is a product of the categorization of emerging economies. In 2011, it was transformed into BRIC-BRICS after South Africa joined the group. For a long time, this platform continued its journey with annual meetings attended by these five members. It was only after 2018 that BRICS began to expand, and eventually by 2024, the number of BRCIS participants was open to nine, with the addition of Iran, Egypt, the UAE and Ethiopia to the five known members.

One of the indicators and consequences of BRICS not being an organization is that countries with very different profiles and geographies are easily included in this economy-oriented platform. For example, we do not know which country applied and did not receive a response, and we do not know if there is such an example. We also do not know what kind of criteria and compliance requirements are demanded for participation in BRICS. On the other hand, we know from the long application process of Iran, India and Pakistan that it takes decades to apply to the SCO and that the application of observer members for full membership requires a process of transition and cooperation. BRICS, which does not have a secretariat or a center, is therefore not an alternative to the SCO, NATO or the EU, and BRICS has no such promise. The fact that some of the leading countries have made such statements does not change the fact that there are loose ties within the platform and that each country has different economic, political and foreign policy priorities. So why do BRICS exist and why have we seen an increase in participation, especially in recent years?

Brics' New Development Bank: Is an alternative possible?

The dynamics of the emergence of BRICS and its first summit are linked to the economic turmoil that started in the U.S. with the 2008 crisis and turned into a global crisis. Like the rest of the world, the BRICS countries were hit hard by this crisis. Indeed, the 2009 summit was held at a time when the crisis was beginning to take on a global dimension. The main motivation of the group was to bring an alternative to the quota system in the IMF and the effective power of the U.S., which is effective in this system, and the World Bank (WB), in other words, the institutions created by the Bretton Woods system, which have moved away from ensuring financial and economic stability and US-oriented decision-making processes, and if this is not possible, at least to seek a way out. At the same time, it should be kept in mind that it is trade with the criticized markets and their rules that keeps the economy alive and drives growth in China and India, the largest economies of the BRICS.

The New Development Bank (NDB), which was on the agenda in 2011 and became operational in 2015, was established with a capital of 100 billion dollars in an effort to be an alternative to the WB rather than the IMF. This budget, which is far below that of the World Bank (WB), is nevertheless important because the NDB can also lend in local currencies. This is one of the factors behind the expansion of BRICS. However, this should be analyzed carefully, neither ignoring it nor exaggerating it.

According to official figures from the NDB, 96 projects are currently being financed with loans worth $32.8 billion. The projects are concentrated in China, Russia, Brazil, India and Egypt. Of this loan, $20 billion is in US dollars, $3 billion in euros, or $23.5 billion in the currencies of the Western financial system. On the other hand, more than $5 billion in renminbi (yuan) denominated loans are noteworthy. The currencies of other countries have smaller shares. There is no serious jump in local currencies, but there is movement. However, the weight of euro and dollar denominated loans is around 75 percent. Therefore, there is no need to rush to say that “BRICS is breaking the hegemony of the dollar,” as the data of its own bank shows that this is an exaggerated and incomplete interpretation. But it is also necessary to say that they are looking for an alternative mechanism, which is not an option offered by the IMF and the WB. The share of local currencies is small, but it cannot be ignored. Maybe this bank is not an alternative to the WB in its current form, but its existence paves the way for alternatives. So where does Turkey see itself in this picture? Why the push for BRICS?

Why does Turkey want to become a BRICS member?

Within the scope of Turkey's expansion to the East, some structures and organizations are mentioned from time to time. The SCO and BRICS stand out in this context. Generally, these names come to the agenda in times of frictions, disagreements and crises with the West. Keeping this in mind, it can be argued that the BRICS step has four dimensions. First of all, Turkey may have taken this step in order to voice more loudly the need to remind its position and importance, especially in the face of the F-16 equipment that could not be purchased from the US and the visa crises with the EU. 

Second, this move may actually be a reflection of an effort to gauge the West's reaction. Namely, the SCO or the Eurasian Union offers a small alternative, albeit with some unknowns for Turkey. Of course, neither their budgets, nor their structures, nor their level of institutionalization with Turkey can compete with the EU or NATO. However, we also know that Turkey does not always act logically in foreign policy, which sometimes involves swings. At this point, Turkey may want to see the impact of a NATO member and EU candidate country's entry into BRICS, at least to keep in mind.

Third, the economic crisis and the economic model implemented since June 2023 are based on attracting the Western investment. However, the data shows that the expected investment is not coming, and that those that do come are not direct investments, but more for financial gain. At this point, BRICS can create a breathing space for the economy, especially China and the NDB. Of course, this will not happen quickly in one day, but the announcement of a 1 billion dollar loan from the NDB is seen as important for the economy. Finance Minister Mehmet Şimşek's parallel statements on this issue should be taken into account at this point.

Finally, Turkey is in close contact with China and Russia. In the case of Russia, the extent of dependence is well known. However, Chinese investments in Turkey and bilateral trade are more modest. In this context, as mentioned in point three, BRICS may be seen as an umbrella for Turkey in terms of trade and investment with other countries, including China and India, as well as developing dialogues with other countries through annual summits.

The nature of BRICS, the NDB and Turkey's membership process are of course based on certain assumptions and predictions. However, the question marks might be answered by Erdoğan's contacts at the BRICS meeting and BRICS' response to Turkey's application.