Indonesia’s BRICS Bid: Steering Economic Pragmatism in a Shifting Global Order

Written by: Wilson Changgrairawan, Alicia Asyera Esterlina Unwaru, Alya Alkautsar Zabiansyah, Nirmana Artistika dan Azel Bimarajasa

General Overview about BRICS

Brazil, Russia, India, China, and South Africa (also known as BRICS) form an intergovernmental organization whose governments meet annually for a formal summit and to coordinate multilateral policies. The origins of BRICS can be traced back to a 2001 publication by Goldman Sachs economist Jim O’Neill. He argued that the BRIC countries were poised to play an increasingly significant role in the global economy and also to challenge the dominant G7 wealthy economies (Goldman Sachs, 2024). Russia was the first to call a convening of the four countries in 2009 after the first ministerial meeting in 2006. South Africa joined a year later in 2010 by invitation from China (Reuters, 2023).

The bloc has sought to coordinate its members’ economic and diplomatic policies, establish new financial institutions, and reduce dependence on the U.S. dollar. As a result, the bloc was fiercely stereotyped by the Western powers as a competitor against Western-led economic institutions. The group has been advocating for a global governance that is more just and multipolar, empowerment for the Global South countries, as well as emphasizing an economic system that diverged from and parallel to the West-led financial system. Bilateral relations among BRICS are primarily based on the principles of non-interference, equality, and mutual benefit. In 2014, the BRICS nations set up the New Development Bank (NDB) to support private or public developments. By the end of 2022, it had provided nearly $32 billion to emerging nations for new roads, bridges, railways and water supply projects (BBC, 2024). 

On January 1, 2024, BRICS expanded to include additional countries from  Asia and Africa, with Egypt, Ethiopia, Iran and the United Arab Emirates officially joining. The expanded group has a combined population of about 3.5 billion, or 45% of the world’s inhabitants. Collectively, the members’ economies are worth more than $28.5T—about 28% of the global economy. BRICS countries also produce around 44% of the world’s crude oil (BBC, 2024). In addition, the bloc’s influence on global economic and strategic affairs is growing as more than 30 countries express interest in joining. The expansion also comes with a range of geopolitical implications. The group is poised to exert influence over the wars in the Gaza Strip and Ukraine, the global economic system, the competition between China and the West, and the global efforts to transition to clean energy (Ferragamo, 2024).


Bridging Continents, Building Fortunes: The BRICS-Southeast Asia Nexus and Investment Continuum

Sun Tzu once said, ‘Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.’ This timeless adage encapsulates the essence of BRICS’ calculated stratagem: strategy manifests in its steadfast commitment to economic pragmatism, tactics emerge through the deliberate cultivation of a recent geopolitical nexus with Southeast Asia, and victory is envisioned as a sustainable investment continuum. Together, these elements form a cohesive blueprint for reshaping global economic dynamics.

At the global level, BRICS has long been heralded as a counterweight to the Global North’s rule-based order, challenging existing power structures and advancing a multipolar world. This aspiration for a decentralized economic order is not merely rhetorical; it is bolstered by strategic actions such as currency swap agreements, alternative payment systems, and institutional innovations like the NDB (Seah, 2024). As this global recalibration unfolds, Southeast Asia (SEA) emerges as a critical region where BRICS’ strategy meets tangible opportunity. Historically, SEA nations have navigated between power blocs since the Cold War, consistently pursuing strategic autonomy. This is evident in frameworks like the Association of Southeast Asian Nations (ASEAN) and the Asia-Pacific Economic Cooperation (APEC), both of which prioritize regional resilience and inclusivity (Saggu, 2024) (Porca-Konjukusic et al., 2024). Against this backdrop, BRICS and SEA share converging interests that cultivate a mutual attraction: both seek to reform global governance, reduce dependency on Western-dominated institutions, and foster sustainable development.

This alignment is seen in initiatives such as the Belt and Road Initiative (BRI) and the Regional Comprehensive Economic Partnership (RCEP), which offer mutual avenues for trade, investment, and infrastructure development. However, SEA nations remain cautious, carefully balancing these opportunities with the geopolitical implications of aligning too closely with the Sino-Russian agenda, particularly in light of the ongoing war in Ukraine (Saggu, 2024). On the other end of the spectrum, the practical implications of this partnership are becoming increasingly evident. Thailand and Malaysia, as pivotal players in the BRICS-SEA nexus, have demonstrated interest in currency exchange agreements and expanding trade corridors (Kamil, 2024). For Vietnam, BRICS membership could unlock markets in the Middle East, Latin America, and Africa, diversifying its trade portfolio. Ultimately, these developments reflect not just an opportunistic alignment but a deliberate shift towards a decentralized economic order (Sasipornkarn, 2024).

 

BRICS and Indonesia

Indonesia’s decision to join BRICS under the administration of President Prabowo Subianto reflects a significant shift in the country’s foreign policy direction. This move comes in the context of an increasingly complex global political challenges and economic pressures faced by developing countries, including those in Southeast Asia. As one of the largest economies in Southeast Asia, Indonesia views BRICS membership as a strategic step to leverage its position in the global market (Hutagalung, 2024). Despite ongoing challenges such as social inequality and food security, Indonesia sees BRICS as a relevant platform to voice the interests of developing nations. Foreign Minister Sugiono stated that this move not only reflects Indonesia’s active and independent foreign policy but also ensures that Indonesia can actively participate in various global forums without being constrained by the influence of any particular bloc. This also underscores Indonesia’s commitment to remaining neutral and not entangled in confrontational geopolitical dynamics (Strangio, 2024).

President Prabowo Subianto, inaugurated on October 20, 2024, has emphasized the importance of a good neighbor policy and is committed to building strong relations with all countries. In his inaugural speech, he declared that his administration would adopt the philosophy that having a thousand friends is too few, and one enemy is too many, highlighting Indonesia’s desire to maintain amicable relations with all nations while adhering to anti-colonialism principles (Rostami, 2024).

At the BRICS Plus Summit in Kazan, Russia, on October 24, 2024, Indonesia’s Foreign Minister Sugiono officially expressed Indonesia’s intention to join BRICS. He affirmed that this move aligns with Indonesia’s independent and active foreign policy, emphasizing that it does not signify alignment with any particular bloc but rather active participation in all forums (Rostami, 2024). Indonesia’s desire to join BRICS has drawn international attention. The U.S. Ambassador to Indonesia remarked that this decision is Indonesia’s sovereign right and expressed hope that bilateral relations remain strong (Riswan, 2024). Meanwhile, analysts view this step as part of Indonesia’s broader strategy to expand its influence and economic opportunities on the global stage (Greenless, 2024). By joining BRICS, Indonesia is expected to open new opportunities in trade, investment, and cooperation in various sectors, while also strengthening its position in global political and economic dynamics.

A Bag of Opportunities for Indonesia

Indonesia’s decision to join BRICS marks a strategic move toward broadening its economic and diplomatic horizons on the global stage. As a member of the Non-Aligned Movement, Indonesia is presented with significant opportunities to bolster its position within the global economic order. One of the primary advantages lies in gaining access to the expansive markets of BRICS member nations (Alzaini, 2024). With a substantial population base and high consumption demand, BRICS offers a promising destination for Indonesia’s flagship exports, including palm oil, coffee, and other natural resources. These markets not only provide opportunities for increased trade volumes but also serve as a platform for introducing Indonesian products to a more diverse global consumer base (BRICS Summit, 2023).

According to Sofia (2024), Indonesia could unlock strategic investment opportunities crucial to driving its economic growth by engaging with BRICS member nations. These nations are renowned for their substantial investment capacities, particularly in key sectors such as infrastructure, energy, and technology, which align with Indonesia’s development priorities. The BRICS Investment Report (2023) highlights that in 2020, ten major major economies served as ultimate investors within BRICS, underscoring the potential for collaboration in fostering economic growth.

By leveraging these relationships, Indonesia can attract investments that would stimulate job creation, enhance public purchasing power, and support the development of essential infrastructure, including highways, ports, and energy facilities. These investments not only promise immediate economic impact but also the reinforcement of Indonesia’s long-term economic foundations (UNCTAD, 2022). Additionally, Indonesia’s participation in BRICS may pave the way for partnerships in emerging industries, such as agricultural productivity, digital transformation, and renewable energy (Sofia, 2024). Such collaborations can provide Indonesia with access to cutting-edge technology, fostering innovation and ensuring its economy remains competitive in the face of global technological advancements.

Beyond trade and investment, Indonesia’s inclusion in BRICS offers a valuable opportunity to learn from its fellow members in crafting innovative economic policies. Countries such as China and India have demonstrated remarkable achievements in establishing dynamic economic ecosystems through robust manufacturing sectors, technological innovation, and effective human resource management (Dahlman, 2007). By adopting lessons from these developmental strategies, Indonesia can enhance its global competitiveness and design economic policies that are both adaptive and forward-thinking. Through organized learning exchange and joint initiatives, Indonesia can develop its human capital, foster entrepreneurship, and strengthen its institutional capacities to support long-term growth. Moreover, participation in BRICS enhances Indonesia’s influence in global economic governance, enabling it to actively shape policies that advocate for equitable growth and the interests of developing nations.

 

Stumbling Blocks for Indonesia

Being in the cusp, will never meant that we are in the middle. The trade war quarrel between China and the United States is ever growing and inevitable. Indonesia’s decision to join BRICS could be perceived by some as a strategic alignment with China, potentially reshaping Jakarta’s geopolitical stance. The economic rivalry between the two superpowers manifests in tangible trade dynamics, influencing Indonesia’s export and import relations. In 2022, China was ranked first among Indonesia’s trade partners, reaching 67.7 billion U.S. Dollar, while the United States was only ranked 35th that same year (OEC, 2022). When it came to choosing friends and foe, China might have become the convenient option for Jakarta to be affiliated in the current global polarity, bolstered by geographic proximity, culture, and efficient trade routes. However, with the current global security dynamics, our export dependency and a more apparent tendency towards China—by becoming BRICS’s partner country—might be a liability. In 2021, the United States has put a stronger emphasis on its Indo-Pacific interests through the trilateral security pact, AUKUS (Australia, United Kingdom, United States of America), to counter China’s military power (Imannurdin et al., 2024). Regarding that, historically, Indonesia’s military affiliation with the United States has been a strategic alliance to back up Jakarta in the conflict of South China Sea or Natuna Sea.

As a result, a pattern appeared as follows: Jakarta has sought robust defence relations with the United States while putting China as the biggest economic ally (Priamarizki, A., 2024). The pendulum of balance has thus become the keystone of Indonesia’s foreign strategy to get the best of both worlds. However, the BRICS partnership might change it significantly. The growing membership and partner nations of BRICS has put the Trump administration into a more protectionist move, as shown with threats of the administration imposing 100% tariffs on BRICS—affiliated countries if they pursue a new BRICS currency (Iyer, K., 2024). Regarding BRICS currency, as an economic pact with countries ranging from different social, economic, and geographic backgrounds, the nature of BRICS’s economy will also have a difficult dynamic. A notable disparity in annual GPD growth, such as the 7% difference between South Africa’s 1% and India’s 8% growth rate in 2024 (World Bank, 2024), underscores the inherent challenges of implementing a multilateral currency akin to the Euro. Such economic divergences make it exceedingly complex to adopt unified monetary policies, particularly in adjusting interest rates to cater to the diverse needs of member nations. Policies designed to stimulate growth in a slower economy, like South Africa, may inadvertently exacerbate inflationary pressures in faster-growing economies, such as India (Gift, 2024).

Furthermore, positioning a BRICS currency as a potential alternative to the U.S. Dollar introduces additional complications. While it could symbolize economic sovereignty and reduce dependency on the dollar, this shift risks economic instability, especially considering the current dollar’s liquidity and widespread acceptance. Aligning the monetary priorities of nations with varied economic conditions and fiscal frameworks would require unprecedented coordination, which may ultimately undermine the purported benefits of such a currency initiative.

 

Conclusion

BRICS represents a pivotal shift in the global economic and political landscape, advocating for multipolarity, economic pragmatism, and equitable growth. With its expansion in 2024 to include key Asian and African countries, the bloc now accounts for 28% of the global economy and 45% of the world’s population. For Indonesia, joining BRICS under President Prabowo’s administration is a strategic move to enhance trade, attract investments, and amplify its influence in global governance.

However, this decision also comes with challenges, including managing geopolitical perceptions, maintaining balance between China and the U.S., and navigating the complexities of a diverse economic bloc. While BRICS offers Indonesia opportunities for sustainable growth and collaboration, its long-term success hinges on addressing structural disparities among members and ensuring inclusive, cooperative frameworks. Ultimately, BRICS’s ability to influence global dynamics will depend on its capacity to foster unity amidst diversity. Indonesia’s involvement in BRICS is both an opportunity and a challenge, positioning the nation at a critical juncture in the ongoing evolution of global governance.

 
 

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