BRICS Grabs Global Attention

Within days after the 15th BRICS’s summit in the South African city of Johannesburg (August 22-24), French President Emmanuel Macron admitted that Western influence was “on decline”, as “new international powers” emerged. Going by its expansion in terms of membership at the 15th summit (Aug 22-24) of BRICS in Johannesburg, a new reserve currency threatens to dent deeply the traditionally dominant greenback that the United States has flaunted particularly after WWII. The grouping has drawn considerable international attention reiterating the gradual onset of a new world order in different dimensions. 

Commencing with four members in the BRICS’ acronym whose last alphabet was added with South Africa’s entry, the organisation has set all sounds and signals of emerging as a superpower economic grouping fired by collective economic interest without serious adverse political implications for individual member participants. 

By now, the dollar dominance does seem to face a credibly competent rival. The comfortable nest it rested in for so long is getting ruffled in a manner that has made supporters of dollar dominance to sit up and take notice in all seriousness and the likely implications. The currency of alternative allures those with the suffocating experience of the hegemony imposed by monopolist practices. This is the law of nature and power of new ideas for new initiatives.  

When it all boils down to harsh reality, money prompts and guides modern politics, which, at the end of the day, has time and again kept reiterating that there are no permanent friends and little lofty ideals of permanent nature when things come to a head. And these are times of steady geopolitical polarisation. 

New order

Some three dozen countries had informally indicated their interest in joining BRICS, ahead of the 22-24 Johannesburg summit. And the summiteers in Johannesburg at their latest gathering decided to expand the organisation, roping in UAE, Ethiopia, Iran, Argentina, Egypt and Saudi Arabia join BRICS. The bloc seeks to promote a multipolar world. In much of South Asia, there is hardly any discussion on the de-dollarisation trend, which indicates an inexplicable state of outlook. It could be the case of a waiting-and-watching the unfolding events.  

 Since it broke out in February 2022, the Ukraine war fuelled desires among many nations to seek alternative approaches to currency reserves. The US, cheered by its European allies, particularly NATO members, moved in haste to freeze the bank accounts of Russian “oligarchs” who were close to Putin or who refused to denounce the “Hitler-like” “dictator” and a “war monger”. It was a case of swallowing more than the actual capacity to chew. Enough was enough, as things got overstretched for too long and too far, firing a volley of fear in speculation of what could happen to nations facing situations not compatible to the dollar world rulers. 

De-dollarisation’s attraction is not out of any special admiration of Putin’s Russia but the participating countries’ own interests of not being handicapped or overwhelmed at times of crises when a government might beg to take stands and policies not in tune with any currency issuing country. In this case, the US. In the recent development, China helped broker a rapprochement between West Asia’s two key players and oil-rich Iran and Saudi Arabia. This took the world in general and the West in particular by immense surprise.

Soon after the Ukraine war started, Saudi Arabia’s Crown Prince and de facto ruler Muhammad bin Salman twice rebuffed US President Joe Biden’s phone call in anticipation of what was the cause of the call. Eventually when the call from the White House was received, the Saudi royalty rejected Biden’s request for raising oil production to help check price spiral. Riyadh’s delayed and frosty response is attributed to its conclusion that a viable alternative international force was clearly emerging at the behest of Sino-Russian initiative. 

The GDP of BRICS has already reached $32.66 trillion as against $ 25.5 trillion to the US credit, accounting it does for 40 per cent of global population and 25 per cent of GDP. Moreover, it is expanding, which bewilders an apprehensive West about the tough competition in the making. The West has not said in as many words but its concerns are visibly strewn all over the place.

While BRICS proponents have shown a desire to create a reliable alternative to the dollar as a widely and internationally accepted currency, the green dollar backers are expected to work for stemming the potential erosion in the currency that has dominated since long. The clash for currency selection, aimed at worldwide circulation at a respectable level, is in for stiff struggle, as manifested in various manners and through multiple corners. 

Just a start

Currency circulation is a cross-cutting issue. In an undeniably emerging new world order, many things are bound to change. Push and pulls, subtly or otherwise, will roll for quite a while before a modicum of calm prevails.  When a BRICS currency does make its debut, its coverage and value is expected to be strong. How it adjusts with the dollar and vice versa will be closely watched by its supporters and opponents. The enthusiasm it has already generated in so many nations could inspire more countries to weigh the scale of currency debut in the making.

For more than 12 years, much thought and other inputs have been put brick by brick into the BRICS scheme of things. There is no open sesame to overnight success. In this case, the toil seems to be on the verge of bearing dividends. The West-dominated World Bank had not anticipated China’s such growth and development. Media smugness narcotised its core audiences into farcical strength. 

Economic transformation, impact and implications change equations, which reiterate in a testimony of China’s soaring prominence and speeding economic strength, signalling the beginning of the decline in the West’s once overwhelming dominance in setting political, economic and cultural agendas on their own terms. Long held desires in especially Asia and Africa to be given due role and voice when policies are formulated at international forums and follow-up programmes begin getting implemented. Some prominent economists anticipate BRICS to collectively dominate the global economy by 2050. 

For sure, the attention that the latest edition of the BRICS summit drew reflects the changing mood across the globe. Ongoing anticipation of a game-changing grouping is within sight. The world is better off with alternatives than without. 

(Professor Kharel specialises in political communication.)