Algeria gets official approval to join BRICS New Development Bank

Algeria is now officially in the club. Earlier today, the North African country got the green light to join the BRICS New Development Bank (NDB).

The announcement came straight from Dilma Rousseff, the bank’s president, during the NDB’s annual meeting in Cape Town, South Africa.

The NDB has been on a bit of a membership spree recently. Bangladesh, Egypt, the UAE, and Uruguay all joined in 2021. For Algeria, it’s a chance to tap into new economic opportunities and expand its global connections.

In July, Algeria applied to join the BRICS New Development Bank with a $1.5 billion contribution. President Abdelmadjid Tebboune said: 

“We are looking to open new economic doors and strengthen our ties, especially with countries like China.”

Algeria’s economy is heavily reliant on oil and gas, making up a massive chunk of its GDP. The country is trying to diversify, but that’s easier said than done.

Joining the NDB could help the country tap into new funding for projects that could modernize its infrastructure and cut down on its reliance on hydrocarbons. 

In theory, this could lead to more stable economic growth in the long term. But there’s a flip side to this coin. The BRICS nations themselves aren’t exactly riding high.

Many of them have economic problems of their own. High public debt, sanctions, and political instability—these are just a few of the headaches Algeria might inherit.

What Algeria stands to gain and lose

Being part of the BRICS New Development Bank would open up some serious doors for Algeria. For starters, there’s the possibility of increased trade with other BRICS members. 

Major players like China, India, and Brazil could become new markets for Algerian goods. We’re talking about more than just oil and gas—there’s potential for agriculture and other sectors to see a boost. 

But with every opportunity comes risk. The NDB isn’t just a free money fountain. Algeria’s economy could end up being too tied to these BRICS countries. If they stumble, Algeria could feel the burn.

And this whole thing will likely strain its relationships with Western countries. The EU and the US are currently some of Algeria’s biggest trading partners. If the move to BRICS comes off as too aggressive, there could be some diplomatic and economic fallout. 

There are political stakes too. Algeria’s political scene is not the most stable, and adding another layer of complexity could tip the scales.

The military’s influence in politics and internal divisions could hamper Algeria’s ability to make the most out of its BRICS membership. Any instability could scare off potential investors or lead to half-baked reforms.

And there’s the issue of protectionism. Algeria has a track record of favoring its own interests over open markets, especially when it comes to the EU. Tariffs, import bans, and other trade barriers have made it harder for European goods to enter the Algerian market. 

If Algeria doubles down on this strategy with its BRICS allies, we could see even more friction with Europe. According to recent stats, EU exports to Algeria have already dropped from €22.3 billion in 2015 to €14.9 billion in 2023.