by HAMZA RAO
When the winds of change blow, goes the old Chinese proverb, some build walls, others build windmills. As the delayed defiance of the peripheries begins to breach the gates of the “rules-based” world order, the West appears to be caught in a waking nightmare, sleepwalking into a full-blown clash with BRICS.
If the international economic order was crafted in an era when most developing nations hadn’t even come into their own and only awakened to find themselves shackled to an unequal architecture, then as history circles back to the West with a vengeance, it seems many powers have been caught napping at the wheel.
As the old Western guard appears to fade and the birth pains of a new world grow louder with ever-increasing force in the form of BRICS, the status quo seems to be clinging to the belief that the monolithic history sealed at the end of the Cold War still holds sway and no new future can appear under the proverbial sun.
The hand-wringing was palpable last month when the group of countries, including sanctions-battered nations, met in Russia for its annual summit. The meeting was the largest held by BRICS since its creation in 2009.
Initially composed of Brazil, Russia, India, China, and later South Africa, the bloc welcomed four new members this year: Egypt, Ethiopia, Iran, and the United Arab Emirates.
After the alliance of emerging economies widened its circle last year, the nine-member BRICS now holds a larger slice of global wealth than the G7, the economic stronghold led by the United States and its junior partners. As major agricultural players, BRICS nations produce a third of the world’s food.
Population-wise, BRICS dwarfs the G7, representing nearly five times the number of people, and with 40 nations knocking on its door, the bloc has become a beacon for those seeking a shift in the world order.
China, the heavyweight within BRICS, posted a GDP of $17-$18 trillion last year, dwarfed by the United States. However, it is closing the gap steadily. At the current pace, most experts predict China will surpass the US by the end of this decade.
While they cannot be called a monolith, the BRICS countries share a common priority: breaking free from the chains of underdevelopment. They argue that the United States, along with its G7 allies—Canada, Japan, Britain, France, Italy, and Germany—first stifled them as colonies and now controlled them through economic restrictions.
Why de-dollarise?
At the heart of these grievances lies the US dollar, whose reign as the global currency has held emerging economies hostage. But how can a mere piece of green paper, established as the world’s ruling currency in the aftermath of World War II, exert such power over others?
The answer lies in its role as an international currency and how it operates.
Imagine this: foreign nations send the US the fruits of their labour — French wine, Japanese electronics, African copper — and in return, the US sends little green pieces of paper, which cost nothing to produce.
This paper, the dollar, is accepted globally because it’s needed for currency reserves and international transactions. While most countries must trade goods of equivalent value, the US essentially gets something for nothing – a privilege unmatched in the modern world.
Similarly, the drive for de-dollarisation gained momentum after the use of economic sanctions in the wake of the Ukraine conflict.
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