Despite the rosy optics of its economic might, BRICS remains under scrutiny from its skeptics. The expanding alliance, now 11-strong post its 15th summit, boasts significant clout in GDP, oil exports, and commodities.
These impressive figures have thrown a gauntlet to the Western financial sector. Yet, beneath the shimmer lies a reality riddled with discrepancies and unfulfilled promises. Today, we cast a critical lens over some of the most biting critiques this powerhouse has attracted.
All Bark, No Bite
It’s frustrating, to say the least. For nearly ten years, BRICS has mastered the art of political theatre. Grand speeches at summits, determined leaders vowing for change, and yet, the aftermath is a barren wasteland of unfulfilled promises.
It’s an age-old song and dance. Like a mirage in the desert, we’re shown a vision of progress that evaporates upon closer inspection. These leaders, most from developing nations, regale us with tales of change, but the ground reality stays stubbornly static.
The annual gatherings end up being mere talk shops, offering a lot of noise but not much else.
A Trophy Cabinet, Empty of Trophies
What has BRICS truly achieved? It’s a question that’s been echoing in the hallways of global finance. On paper, they band together annually, showing unity and intent. But tangible results? They’re sparse. Key challenges, even those limited to the BRICS bloc, remain untouched.
The summits, lauded by attendees, largely end up being redundant gabfests. A coalition of such magnitude ought to have groundbreaking feats to showcase. Alas, the resume is threadbare.
Friendship in Public, Frenemies Behind Closed Doors
Sun shines on the BRICS summit, where leaders play nice and show unity. But once the curtains fall and the spotlight dims, the mudslinging begins. India and China, two titans of the group, never miss a chance to take jabs at each other, thanks to their everlasting border and trade disputes.
On one hand, China and Russia are itching for global dominance. Meanwhile, India, South Africa, and Brazil are treading more cautiously, aiming for a balanced stance. It’s a motley crew with discordant visions, often resorting to brute force or cold silences to resolve disputes.
Yet, amidst this cacophony, there’s a glimmer of strategy. As the movement to move away from the US dollar gains traction, the BRICS conglomerate could be instrumental.
The idea? Integrate their currency and fixed-income markets, laying the foundation for better liquidity and efficient pricing. One could argue that the dominance of the dollar, accounting for an impressive slice of global trade and foreign exchange reserves, is a mere outcome of market efficiency.
But BRICS nations are contemplating options that stray from this dollar dependence. More transactions within the BRICS community are now settled in local currencies, a logical response to, among other factors, the US’s swift ban on Russia.
However, the notion of a new currency for the bloc seems far-fetched. A currency, devoid of any economic foundation, could face liquidity challenges and might end up resembling the volatility of cryptocurrencies.
A smarter move? Improve local currency trading liquidity. Creating common settlement mechanisms, integrating bond markets, and even pushing integration at the retail level are tangible solutions.
Another strategy to consider is imposing a Tobin tax on currency trades involving the dollar or other major global currencies. By creating this slight headwind for the dominant currencies, the playing field could become more balanced.
