Egypt’s Engagement with the BRICS: Alternative Development Cooperation Initiative

Ahmed, Y. N .; Hefnawy, Fatma; Shaker, V.

doi:10.21608/jaess.2020.141887

Egypt’s Engagement with the BRICS: Alternative Development Cooperation Initiative "With Reference to Agricultural Trade"

Document Type : Original Article

Authors

Faculty of Agriculture, Cairo University,11865, Egypt.

10.21608/jaess.2020.141887

Abstract

Given the importance of international trade in economic development, this study evaluates the potential impact of Egypt’s proposed entry into the bloc of BRICS (Brazil, Russia, India, China, and South Africa) countries. BRICS has great demographics and economic potential and is ranked amongst the world’s largest economic blocs in the 21st century. Egypt was invited as a guest of honor at the Xiamen BRICS Summit in 2017. This study uses a regional CGE Model based on GTAP9 to clarify the expected economic impact of Egypt's accession to the BRICS alliance. The study further discusses two main scenarios, the first involving tariff reductions, and the second reductions in non-tariff barriers to trade. The first scenario leads to an increase in GDP and terms of trade for all member States of BRICS and Egypt, excluding Brazil and China whose terms of trade deteriorate. As for the second scenario, there is an improvement in welfare (Real Income) for all BRICS countries and Egypt. In this scenario, Brazil has the most gains. Moreover, all the nations under study achieve an increase in GDP. The study recommends that Egypt joins the BRICS alliance, given the positive effects on the Egyptian economy as well as members of BRICS.

Keywords