Kremlin press. BRICS Leaders
Ethiopia has applied to join the BRICS, in addition to Algeria, Egypt, Saudi Arabia and Indonesia, which have already applied. As early as 2023, the new bloc could.
When Brazil, Russia, India, China and South Africa announced the creation of BRICS at the St. Petersburg Economic Forum in 2006, Western analysts were rather skeptical about this alliance: different levels of economy, state structure, traditions. But 17 years have passed, which is not much by the standards of history, and this alliance has become a serious force capable of reducing the influence of the United States and the West.
For a long time the U.S. and its G7 allies dominated global trade, and the dollar was the main currency in cross-border trade, but now the situation in the world is changing. As new countries join the BRICS, U.S. hegemony in global politics and economics is diminishing.
And it was the United States itself that stimulated the growth of the new alliance when it introduced unprecedentedly harsh measures against Russia, essentially cutting it off from the dollar in an attempt to turn it into a rogue country. But it was just the opposite: more and more developing countries had seen too much of America's dictate and concluded logically that they could do the same to the rest. And they actively began to unite to defend their national interests. The result is a powerful bloc that can influence and change the economic and political landscape of the world. And with 13 more countries about to join it, it's hard to underestimate its ever-increasing role. So it is obvious that the world economic center is now shifting from the West to the East, thereby marking the end of the economic and political domination of the United States and its Western allies.
Here is some data to support this.
With the accession of 13 countries, the population of the BRICS will be about 60% of the world's population. And this means an increase in consumption, which will naturally lead to an increase in economic growth.
In addition, the BRICS will become the owner of the largest reserves of oil, gas and other resources, which are concentrated on the territory of its states. And hence the control of prices and world production.
The military capabilities of BRICS can be compared with those of the West, and then it will not be possible for the U.S. and the West to unleash a military conflict at their will. Their dominance in military terms will be a thing of the past.
Moreover, after the accession of 13 countries, BRICS will be able to control important land and sea routes
And the U.S. is extremely worried about its loss of control over the states of the Global South and the speed with which it is moving closer to Russia and China.
Foreign Policy magazine published an article with an eloquent title: "Six Swing States Will Decide the Future of Geopolitics," referring to Brazil, India, Indonesia, Saudi Arabia, Turkey and South Africa. The author writes: "The leading countries of the Global South have more power today than ever before. The reasons for their newfound geopolitical heft: They have more agency, they benefit from regionalization, and they can leverage U.S.-China tensions." And this has untied their hands: an example is that they refused to support the U.S. in the Russian-Ukrainian conflict. The fact that, for example, Saudi Arabia withdrew from the Combined Maritime Forces in the Gulf, where the main role was played by the United States, is evidence of this.
BRICS does not claim to be a military or politico-military association, but rather an alternative to the WTO and even to the UN, whose influence has been declining catastrophically in recent years. After all, both of these organizations have demonstrated their complete dependence on America, and, as a consequence, their practical incompetence. The BRICS could be their replacement as more countries join it.
The concerns of the United States are understandable, but in order to get the Global South on their side, they need to change their foreign policy away from the dictatorial imposition of their vision of politics and economics.
According to the Financial Times, U.S. allies "regularly voice concern that America will not only continue to take measures against China, but will forcefully induce allies and partners to do so. And Europe remains wary that Washington's conceived new global economic architecture will inevitably favor American producers and workers." Russia and China do not act as hegemonic superpowers, but suggest to the countries of the Global South to act in accordance with their national interests.
The summit of the BRICS heads of state, which begins on August 22, 2023 in South Africa, may be fateful, because it should decide on the creation of a common currency. And this is a strong, truly revolutionary step, because by creating a new reserve currency supported by a basket of the member countries' own currencies, the BRICS members can interrupt the global hegemony of the dollar.
Back at the 14th BRICS summit in mid-2022, Russian President Vladimir Putin said that the states of this international union were planning a "new global reserve currency" and were ready to work openly with all honest partners. Recently, Brazilian President Lula da Silva expressed his support for a BRICS currency, saying: "Why wouldn't an institution like the BRICS bank get a currency to finance trade deals between Brazil and China or Brazil and all the other BRICS states? Who decided that the dollar would remain the main (trade) currency after its gold standard was abolished?"
More and more countries, frightened by the actions of the U.S., which froze 300 billions of Russia's funds and cut off China from modern technology, are switching to their own currencies for mutual settlements. Not only Russia is ready to sell its energy resources to China for yuan, but also Saudi Arabia. Everyone is tired of the hegemonic financial role of the dollar, when the U.S. firmly controls all global financial flows, and those who refuse to obey, simply weaned from the dollar. But if the dollar falters, the power of the states that issue this currency will also falter.
The constant printing of the dollar by the U.S. leads to the fact that it simply depreciates, and this at a foreign debt of more than $31,800 billion. Not for nothing the central banks of many countries are actively buying gold, increasing their reserves, trying to protect themselves from the "green" unsecured paper.
Of course, it will not be easy, it will take more than one year, but when the euro appeared in 1999, there were also doubts about its viability, but nevertheless the currency is in second place after the dollar.
It is clear that the issue of a single BRICS currency should be considered in the medium or even long term.
Meanwhile, BRICS is taking its first steps by working to expand settlements in the national currencies of this association in international trade. And relevant agreements have already been concluded and are being implemented in practice. It is clear that the creation of a single currency requires that the role of national currencies of the member countries of this association in mutual trade, investment and other transactions must first increase. This is the only way to lay the foundation for a single currency. The emergence of a potential BRICS currency would significantly weaken the dollar, and then lead to the fact that it would lose its role as the main unit of account.
The question arises: what can the new BRICS currency be secured with? One reliable option is gold. By May 2023, the total gold reserves of the central banks of the BRICS countries amounted to more than 15% of the global gold reserves of the central banks of the world. Russia, India and China are among the world's top ten in terms of gold holdings. Russia controls 2,376.52 metric tons of gold, making it the fifth largest gold reserve. China ranks sixth with 2,068.36 tons of gold and India is in ninth place with 794.62 tons of gold. The gold reserves of Brazil and the Republic of South Africa are smaller, at 129.65 tons and 125.38 tons, respectively.
To summarize all of the above, one cannot deny the obvious. While the United States and its Western allies fought passionately against Russia and China, a powerful enough alliance stood against them, which does not allow it to dictate its will either politically or economically. And if the BRICS, which is constantly being knocked on its doors by new developing countries, decides to create a politico-military alliance, the White House and its NATO allies will have no choice but to try to find compromises with it, speaking as equals and abandoning the idea of solving problems by force of arms.