The BRICS bloc of countries led by China and Russia want to upend the U.S. dollar. Indeed, South Africa’s ambassador to the group could not have been clearer last month when she said, “The days of a dollar-centric world is over. That’s a reality. We have a multipolar global trading system today.”
BRICS is an acronym coined in 2001 by Jim O’Neill, former managing director of Goldman Sachs’ Global Investment Management division, in his seminal paper in which he predicted that the budding economies of Brazil, Russia, India and China (and now includes South Africa) would surpass the world’s top economic superpowers of the G-7 in the years ahead.
Formed in June 2009 at their its summit held in Yekaterinburg, Russia, the group accepted South Africa as a full member in September 2010. Its officially stated mandate is “restructuring the global, political, economic and financial architecture to be more equitable, balanced and representative.”
The leaders of the five nations seeking to upend the West’s dominance in global affairs will gather on Aug. 22-24 for their 15th summit, minus Russian President Vladimir Putin, who will be represented by Foreign Minister Sergei Lavrov due to Putin facing an arrest warrant from the International Criminal Court for war crimes in Ukraine.
A top item, which undoubtedly will underpin all the discussions – while officially not on the agenda, according to South Africa’s ambassador – will be the creation of a new international currency. It is the bloc’s strategic ambition to stand up a joint BRICS monetary unit, akin to the Euro, which eventually would replace the U.S. dollar as the premier currency of international reserves and medium of exchange.
How else can one possibly achieve the goal of remaking the world’s existing geopolitical and economic structure? Why would anyone embark on such an ambitious project? And should the United States and its Western allies be worried?
The major move among non-Western countries towards de-dollarization has gained much momentum in the past year and a half. It is a direct result of what many analysts call the “weaponization” of the U.S. dollar by the U.S. government that levies economic sanctions on countries that Washington doesn’t agree with politically.
Economic sanctions have been employed by the U.S. for decades. Cuba, for instance, has been sanctioned for more than 60 years and Iran for more than 40. This practice has reached unprecedented levels, however, in the aftermath of Putin’s invasion of Ukraine to punish Russia as the White House seized $600 billion of its central bank’s assets in U.S. dollars, a move that even Treasury Secretary Janet Yellen called illegal in 2022. In addition, the Russian economy was cut off from SWIFT, the international money transfer system.
Washington’s policy of using the U.S. dollar as the non-kinetic, economic warfare tool to change Putin’s behavior – although it hasn’t worked since 2014 – prompted many non-Western countries to seek ways to reduce their dependence on the dollar. Many are eager to join BRICS for that reason, a trend that is highly welcome by China – the key driving force within BRICS – whose grand plan is to replace the United States as the military and economic superpower by 2049.
More than 40 countries have recently expressed interest in joining the block in an effort to reduce the currency risk and bypass U.S. sanctions, if necessary. These aspirants include both, U.S. foes, such as Iran, and allies, such as Saudi Arabia, Egypt, Indonesia and Argentina. The message is clear: The non-Western world wants to keep business and economics separate from politics and ideology. It is ready to challenge the Western international norms that have governed global trade and finance since 1944 when 44 nations, including the Soviet Union, founded the Bretton Woods system that includes the International Monetary Fund and the World Bank.
Is this threat to U.S. economic hegemony as real as Moscow and Beijing, who have been pushing the “multipolar world” narrative for years, want you to believe? The two authoritarian regimes have joined forces to challenge U.S. policy at every corner, eager to dethrone the dollar.
Source: https://www.foxnews.com/opinion/china-russia-led-bloc-wants-de-throne-us-dollar-upend-world-order