Joining BRICS group will benefit diverse sectors of the UAE such as trade, investment, space, medicine, finance, and technology and also boost numerous other aspects of the local economy.
Some analysts expect BRICS nations will increasingly trade in their own respective currencies, hence, reducing dependence on the dollar. However, many of them believe that it is still far away before dependence on the US dollar or petrodollars is reduced meaningfully.
Following the 15th annual BRICS (Brazil, Russia, India, China and South Africa) summit last week, the bloc of five major emerging economies announced the admission of Iran, Saudi Arabia, Egypt, Ethiopia, Argentina and the UAE on January 1, 2024, to grow its economic and political clout on the world stage.
The group currently represents around 40 per cent of the world's population and over a quarter of GDP. The size of the BRICS will significantly expand with the joining of the UAE, Saudi Arabia and Iran — three major oil producers.
Logistics, IoT, AI
Paul Park, regional director of MENAT at Milestone Systems, said the strategic alliance offers immense potential for technology companies to contribute to the UAE’s infrastructure development, especially within the security industry.
“Moreover, it promises to revolutionise the health technology industry, drive advancements in the education system, and more. This alliance brings abundant opportunities, fostering cross-border knowledge exchange and mutually beneficial partnerships. Congratulations to the UAE on reaching this significant milestone,” said Park.
Soham Chokshi, CEO and co-founder of Shipsy, said becoming part of BRICS marks a significant milestone for the UAE, signifying strides in economic advancement and enhanced governance.
“In terms of heightened competitiveness, logistics assumes a central stance, where the UAE's dedication to refining supply chain processes through contemporary tools such as AI, machine learning, analytics, IoT, and beyond is set to amplify its global trade and commercial prowess. This alignment with BRICS' ethos augments the UAE's position, promising fortified export-import capabilities and commercial potency within the consortium,” he added.
Vijay Valecha, chief investment officer of Century Financial, said participation in BRICS stands to bolster the UAE's trade and global value chain integration, concurrently attracting additional foreign direct investment.
“Moreover, harnessing artificial intelligence, digitalisation, and investments in critical infrastructure will augment economic diversification and ease the transition away from a petroleum-centric economy. Membership in BRICS signifies a momentous stride in the UAE's economic progression, promising numerous benefits for both the nation and the BRICS member states. A significant advantage stemming from the UAE's entry into BRICS is expanded access to a substantial and expanding market. Collectively, BRICS countries command a GDP surpassing $27 trillion and a population exceeding 3 billion, thereby granting the UAE access to a broader customer base for its goods and services,” added Valecha.
“The UAE has already embarked on seizing the opportunities arising from its BRICS membership. Notably, the UAE has entered agreements with BRICS members to facilitate trade in local currencies, mitigating the risk of currency fluctuations and streamlining inter-business trade,” he added.
Ayman Youssef, managing director, Coldwell Banker, said the UAE becoming a part of BRICS has the potential to transform its real estate market by expanding investment opportunities and rejuvenating ongoing projects.
“The anticipated interchange of ideas within the BRICS grouping could have a revolutionary impact, sparking breakthroughs in urban planning, architecture, and environmental practices. With this alignment, the UAE will strengthen its regulatory frameworks and investment policies, providing a transparent and appealing environment for investors," said Youssef.
"The merging of property legislation among BRICS countries might open the door to cross-border transactions, boosting the UAE's real estate sector and supporting economic growth. The change will not only have the ability to reshape industry dynamics but also move the UAE's real estate market into a more resilient and profitable phase,” he added.
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