The Brics, which includes Brazil, Russia, India, China, and South Africa, have been steadily growing in power as a de-dollarization movement and an enemy of the United States. However, as of January 1st, the group has expanded to include additional developing nations such as Iran, the UAE, Saudi Arabia, Ethiopia, and Egypt. This marks a significant milestone for the Brics, as it now accounts for 43% of the global population and 27% of the GDP.
While the expansion of the Brics has been welcomed by many, it has also faced its fair share of challenges. Last Friday, Argentina formally resigned from the organization, citing its dissatisfaction with the group’s alignment with countries that have been labeled as communist. This decision has disappointed Brazil, one of the original members of the Brics, as it had hoped that having Argentina as an ally would serve its regional interests and counterbalance China’s dominance.
One of the primary reasons why each member nation wants to see the Brics grow is to reduce their dependence on the US dollar. Many analysts believe that the Brics, which were originally founded on economic principles, have now become a force that challenges US hegemony. This is particularly evident in the recent tensions between China and the United States. Brazilian President Luiz Inácio Lula da Silva has been a vocal advocate for de-dollarization, arguing that a world with more currency options would benefit Brazil. While only a small percentage of Brazilian transactions are currently made in yuan, the country’s largest trading partner is China. By trading with China in Chinese currency, Brazil could reduce transaction costs and have easier access to the Chinese financial sector.
Another reason why the Brics want to see their group expand is to increase their bargaining power. As the global economy becomes more multipolar, countries like India and Brazil do not want to impose their currencies as hegemonic. They believe that a more diverse and balanced international financial system would serve their interests better. The United States, however, has downplayed these concerns, claiming that it is not worried about the Brics’ expansion. Some analysts argue that this response is evidence that the United States is indeed concerned about the growing power of the Brics.
While some members, like Brazil and India, have advocated for the establishment of a unified currency for international commerce, experts believe that such a system would be unlikely to be implemented successfully. One of the major challenges would be the need for a central bank, possibly an international one, and the coordination of macroeconomic policies among the member nations. Additionally, the lack of strong ties among the Brics nations could also hinder the establishment of a unified currency. As a result, the focus has shifted to the yuan as a possible alternative to the dollar, given its recognition by the International Monetary Fund and its prominence in trade among the Brics nations.
The rise of the Brics is seen as part of a larger shift towards a multipolar global order, with de-dollarization as one of its geopolitical reform agenda items. However, experts believe that challenging the dominance of the dollar would require a much larger force. Historically, major shifts in global currencies have been associated with revolutions or wars. For example, the rise of the pound sterling followed Britain’s triumph over Napoleon, while the dominance of the dollar resulted from the American triumph in World Wars I and II. Therefore, the ascent of the yuan or any other currency would require a significant event or change in the global landscape.
In conclusion, the expansion of the Brics to include additional developing nations marks a significant milestone for the group. As a de-dollarization movement and an enemy of the United States, the Brics are growing in power and influence. The reasons behind each member nation’s desire to see the Brics grow vary, but they generally revolve around reducing dependence on the US dollar and increasing bargaining power. While the establishment of a unified currency for international commerce seems unlikely, the yuan has emerged as a possible alternative. As the Brics continue to grow, the world is witnessing a shift towards a multipolar global order, challenging the dominance of the dollar and reshaping the geopolitical landscape.
