The upcoming summit of BRICS – the coalition of Brazil, Russia, India, China, and South Africa – set in Johannesburg, has been generating waves of anticipation. One of the hottest topics surrounding it? The role of the U.S. dollar in global trade.
While various speculative narratives have been making rounds, South Africa’s top representative for BRICS relations, Anil Sooklal, has shed light on the summit’s actual agenda.
Trade in National Currencies: The Real Deal
Contrary to popular buzz, the summit isn’t aiming to cast aside the dollar. The U.S. dollar, whether critics like it or not, holds an undeniable stronghold as the predominant global currency.
BRICS acknowledges this, and any move to entirely replace the dollar would be more of a fantasy than a strategy. However, what’s really on the table is the discussion of amplifying trade within BRICS using their national currencies.
This isn’t about challenging the dollar, but about harnessing more autonomy within the bloc. By considering the establishment of a shared payments system and mulling over the potential issue of a unified currency, BRICS seems to be looking inward.
They’re focusing on strengthening intra-bloc trade dynamics, while the dollar continues its reign outside.
Expansion, Not Exclusion
Beyond currencies, another central theme of the summit will be the potential induction of additional countries into BRICS. While the original five, including Russian President Vladimir Putin, are set to discuss, 40 other nation leaders have already RSVP’d, and the list might grow.
Despite some narratives painting BRICS as a counterforce to the G7 or the Global North, the group’s intention is different. The aim isn’t to form an opposition, but to bring to the forefront the issues and interests of the developing world.
They’re not looking to diminish any other group or ideology; they’re aiming to provide a more inclusive platform.
However, as with any coalition, internal differences persist. While China reportedly pushes for a quick expansion of the bloc, India and Brazil appear more apprehensive. The reasons behind these disparities remain under wraps, but it hints at the ever-evolving dynamics within the bloc.
BRICS, commanding an impressive 42% of the global population and responsible for 23% of the world’s GDP, is undeniably a force.
Its New Development Bank (NDB) has bold ambitions, such as elevating domestic currency loans to constitute a third of its lending ventures in the foreseeable future.
While dreams of a common currency to counter the dollar float around, they remain long-term goals, not immediate action points.
Still, the group’s intention to amplify the voice of the Global South is clear. They’re trying to craft an architecture that’s representative, just, and equitable. And while they’re expanding their horizons, they’re also advocating for the interests of the developing world.
Bottomline is BRICS isn’t gearing up for a battle against the dollar or any global institution. They’re setting the stage for a future where they have more control over their trade dynamics and a stronger voice on the global stage.
As the Johannesburg summit approaches, it’s clear that BRICS is more about evolution than revolution.
