Business
How a New BRICS Currency Would Affect the US Dollar
November 3, 2024
February 1, 2024
Nearly thirty-four nations are expressing interest in joining the China and Russia-backed BRICS economic group, as disclosed by South African Foreign Minister Naledi Pandor. This surge follows the recent expansion of BRICS membership, marking a significant development after over a decade. Russia, holding the rotating chairmanship, oversees the applications, emphasizing its leadership role in the group.
The unprecedented interest in BRICS membership comes as Russia assumes the chairmanship for the first time since the group's recent expansion. Earlier this year, Iran, Saudi Arabia, the UAE, Ethiopia, and Egypt joined BRICS, broadening its global influence. However, the specific countries seeking entry from the current thirty-four applicants have not been disclosed.)
The expansion of BRICS is a strategic move, seen as a triumph for China and Russia. Both nations aim to challenge the dominance of the United States in the international system, fostering a more equitable global order. The new entrants highlight BRICS as a formidable coalition, reshaping diplomatic dynamics amid tensions with the West.
Initially comprising Brazil, Russia, India, China, and South Africa, BRICS positions itself as a counterbalance to the G7 major developed economies, representing the Global South. China's proactive role under President Xi Jinping has been instrumental in expanding BRICS, aligning with Beijing's pursuit of an alternative world order and enhanced international influence.
The expansion and continued interest from dozens more countries are also a boon for Russia, which has been shunned economically and diplomatically by the West following its invasion of Ukraine.
Russia’s position as chair will be a key opportunity for Putin to push back against that isolation and portray himself as a key player on a broad diplomatic stage, as world leaders typically travel to the host nation for an annual summit.
Last year, all member state leaders besides Putin gathered in person in Johannesburg. The Russian president, who has an International Criminal Court warrant out for his arrest linked to alleged war crimes in Ukraine, participated virtually.
This year’s event is expected to take place in October in the southwestern Russian city of Kazan.
Earlier this year, Putin urged representatives from nations interested in collaboration with BRICS to engage in its events. Russia expressed anticipation for productive cooperation with all countries in the BRICS orbit, as reported by state-run news agency Tass.
The BRICS group initially formed as a summit-level assembly of Brazil, Russia, India, and China in 2009, later incorporating South Africa in 2011. In August 2023, six new countries received invitations to join, enhancing the group's geopolitical influence. Argentina was the sole invitee to decline participation, influenced by a new far-right administration.
This expansion introduces major oil-producing Gulf economies to BRICS, aligning with Russia and China's efforts to strengthen ties with Iran amid sanctions. Beijing played a crucial role in facilitating the reconciliation between Saudi Arabia and Iran, traditional rivals.
The newly added countries align with BRICS's goals of increased diplomatic and financial coordination. This includes advocating for United Nations Security Council reform and a shift away from a trade system dominated by the US dollar. The expansion reflects BRICS's commitment to challenging existing global power structures.
BRICS is actively pursuing financial initiatives, with finance ministers exploring the use of local currencies for transactions among member states and on international payment platforms. This move aims to rectify what South Africa's Pandor considers an unfair and costly payment system. The ongoing efforts underscore BRICS's dedication to fostering a more balanced and cooperative international economic order.
Source: CNN
Image: African News, CNN
