Indonesia joins BRICS? Prospects for Indonesia’s Political Economy Impact

The diversity of BRICS members, shows a new economic anlization that gives developing countries the opportunity to have choices in welcoming foreign policy in the economic field.

BRICS is an international regime uniting developing countries that was established in 2006. BRICS aims to strengthen the position of leading developing countries in the economic and political spheres. BRICS stands for its members Brazil, Russia, India, China and South Africa. But currently, BRICS members are increasing, namely Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates which officially joined in January 2024. BRICS legitimizes itself as an alternative regime for developing countries to reduce their dependence on the West. In economic logic, BRICS has a superior economic mechanism when viewed from the context of its membership, namely Russia and China with clearly stable political economic growth also reinforced by the inclusion of middle-eastern regional power countries such as Saudi Arabia and the United Arab Emirates. The presence of BRICS members shows that there is a new economic alliance against western domination of world economic development monopolized through the dollar. BRICS is committed to creating a fair economic standard to attempt to create a single BRICS currency to rival the power of the US dollar in controlling the world economy.

The diversity of BRICS members, shows a new economic anlization that gives developing countries the opportunity to have choices in welcoming foreign policy in the economic field. BRICS will be the balancing power of west in building the world political economy architecture. So far, western domination of the economy and the strength of the western dollar, especially the US dollar, has shown a lack of balancing power in the political economy. The presence of BRICS which escapes the purpose of its establishment can provide a rational choice for developing countries not to be trapped in the economic game of the western dollar. It cannot be denied that, world trade is currently still dominated by the United States Dollar with a percentage reaching 90% of world currency trade.

The formation of BRICS is inseparable from the trade war between the United States and China as well as evidence of Russia’s ability to get out of the economic isolation of the United States. The significance of the development of BRICS cooperation will clarify the decline in demand for the dollar or dedollarization so that the effect is a decrease in the value of the dollar and can be a good opportunity for developing countries including Indonesia to strengthen economic diplomacy and determine new policy directions in the new economic battle between BRICS and western countries.

Indonesia as a country with a foreign policy position that has been taken into account in the international world, is a very important moment to understand and play its strategy. Since President Joko Widodo’s administration, Indonesia has intensely participated in state meetings of BRICS members. This has become a question for many Indonesians, whether the BRICS vision is in line with the future direction of Indonesia’s foreign policy. Currently, we know that Indonesia is one of the countries that focus on economic development. Indonesia is a country that has natural resources that are targeted by developed countries where Indonesia is a producer of nickel and coal which are the most trendy commodities today. Both western countries and BRICS member countries, one of which is China, really need these resources. Indonesia must be able to read the ongoing political situation and become an actor who counts and benefits in this game.

Indonesia is one of the BRIC non-member countries invited to the BRICS-16 Summit on October 22-24, 2024. At the meeting, Indonesia’s foreign minister in the era of the new Indonesian government regime, Sugiono, expressed Indonesia’s desire to join the BRICS economic alliance. Indonesia as a country that is concerned with the cooperation of the global south and BRICS as a new regime that legitimizes south-south cooperation. This is then considered equal and in line with Indonesia’s foreign policy. Indonesia can make BRICS as a new political alliance power that prioritizes unity and integrity. Sugiono emphasized that BRICS will prioritize development rights and support the reformation of the multilateral system and become a unifier of the Global South. But behind that, whatever the goal, this will be a breath of fresh air for developing countries that have been trapped in western economic games.

BRICS will be a breath of fresh air for Indonesia and other developing countries especially regarding western protests against Indonesian coal and nickel. The existence of BRICS provides a balancing power against western forces in pressuring Indonesia in nickel and coal production. Indonesia is pushing for a new economic strategy in a new political economy. Indonesia is no longer dependent on western perceptions of nickel downstreaming. Since 2020, Indonesia under Joko Widodo’s government has taken a policy to stop nickel ore exports to the European Union. The policy received strong protests from the European Union until it experienced a long dispute and the European Union sued Indonesia at the WTO. The EU’s lawsuit against the nickel ore raw export ban policy is a form of domination of western powers over the global economic system. Therefore, the existence of a new economic alliance will be a balancing power of the west, especially the European Union against developing countries such as Indonesia.

Therefore, solidifying Indonesia’s policy of entering the BRICS economic alliance can develop western economic power in controlling developing countries. In this context, BRICS can be envisioned as a new economic force that is a breath of fresh air for Indonesia in determining the direction of economic growth. BRICS can be an option for developing countries in fighting the dominance of the western economy which has been very unequal. In this situation, Indonesia could be in an advantageous position. Indonesia is one of the 13 countries that are rumored to be BRICS partners. This, if seen in the concept of international relations, can be connoted as a new cold war but not the problem of political ideology of Socialist-Communist vs Capitalist Democracy but in the context of political economy, namely the Dollar vs BRICS Currency. This was made clear at the 16th BRICS Summit meeting in Russia, confirming that BRICS will establish a BRICS currency. With a new economic power that brings together developing countries, it will create a significant direction of change in the world economy.

Ica Cahayani
Ica Cahayani
Ica Cahayani is a graduate student in International Relation Studies at Universitas Gadjah Mada, Indonesia. Her research interests include practices and policies in international cooperation and development covering the realms of global political economy, security, gender, global value chains and diplomacy. Other research interests Commentries focus on the Indopacific region, ASEAN and Europe. Her actively writes in various domestic and foreign media regarding the latest international relations issues, such as the issue of the ukraine conflict, the phenomenon of world food oil scarcity, the presidency of the G20 Indonesia and its challenges and cultural diplomacy.