GLOBAL SOUTH THROWING BRICS AT THE US!

Saro Thiruppathy writes about how the group plans to change the world order and why its forward trajectory is worrying many Western hegemonists

Chief Economist at Goldman Sachs Dr. Jim O’Neill coined the acronym BRIC in his 2001 study titled ‘Building Better Global Economic BRICs.’ BRIC stood for Brazil, Russia, India and China, which were the countries that birthed the concept of a multipolar world order. Subsequently, South Africa joined the bloc in 2010 with the goal of strengthening South-South relations.

In 2001, O’Neill predicted that the GDP of the four BRIC countries would increase substantially over a decade. And by 2024, BRICS (the ‘S’ standing for South Africa) accounted for 35 percent of the world’s GDP with a membership that included Egypt, Ethiopia, Iran and the UAE.

KAZAN SUMMIT The 16th BRICS summit was held recently in Kazan, Russia, for the first time since the bloc’s expansion in January 2024 under the presidency of Russian President Vladimir Putin.

Over 30 delegations, 22 heads of state and representatives of many international organisations participated in the summit.

UN Secretary-General António Guterres’ attendance was a diplomatic triumph for Putin.

The summit’s achievements also showed the world that Russia is not an isolated state that’s sitting on the sidelines waiting for handouts from the West.

For the first time in the history of BRICS, which was established in 2009, NATO member state Türkiye attended the summit and applied for membership of the bloc.

This Kazan summit showcased BRICS’ goal to strengthen relations between nations in the Global South and shape an alternative multipolar world order. This is particularly necessary to achieve independence from the global financial and trade systems, which are controlled by the West and used to punish its perceived enemies.

The Kazan Declaration, which is the outcome document of the summit conducted under the theme ‘Strengthening Multilateralism for Just Global Development and Security,’ dwelled on the solidarity of BRICS member states, and their opposition to Western sanctions regimes as well as other themes.

These included the need for international institutions to promote peace, development and global cooperation rather than allowing themselves to be used as punitive tools against non-Western countries; respect for international humanitarian law in conflict situations; the importance of the full participation of women in peace processes; and for dialogue and consultation to be the ‘go-to’ methods for peacefully resolving differences and disputes between nations.

DE-DOLLARISATION The ripples caused by BRICS’ ambitions to create a common currency for trade and investment between member states as a means of reducing their vulnerability to US Dollar fluctuations was evident in president-elect Donald Trump’s threat on 1 December on Truth Social.

The next American chief executive texted: “The idea that the BRICS countries are trying to move away from the dollar while we stand by and watch is over. We require a commitment from these countries that they will neither create a new BRICS currency nor back any other currency to replace the mighty dollar, or they will face 100 percent tariffs and should expect to say goodbye to selling into the wonderful US economy.”

Trump could be simply posturing or may actually punish those going against the dollar. Nevertheless, at least one member state is ready to fly with the birds and hunt with the hounds in response to this.

BRICS CURRENCY The goal of BRICS is to reduce reliance on the US Dollar and create a stable alternative to traditional fiat currencies. This new currency will be backed by gold and a basket of other currencies. BRICS members are holding large gold reserves and buying more in the world market.

BRICS’ gold backed currency could challenge the dominance of the US Dollar (which hasn’t been backed by gold since 1971) in global trade and reserves, increase the price of the precious metal and enable it to function as a store of value as with the dollar.

The bloc is also establishing a new payment system that will use blockchain and other digital technologies, to enable cross border payments and settlements free of the restrictions of the dollar.

Meanwhile, there is speculation about whether the petrodollar has died but there are no confirmed reports of its actual demise. In September, ahead of Chinese Prime Minister Li Qiang’s visit, Saudi Arabia indicated a willingness to accept payment for crude oil in Chinese Yuan.

BRICS BANK The New Development Bank, formerly BRICS Development Bank, was established in 2014 in Fortaleza, Brazil, and is headquartered in Shanghai.

This multilateral development institution aims to finance sustainable development and infrastructure projects in BRICS countries and emerging economies; provide loans, guarantees, equity participation and so on, for public and private projects; cooperate with international lending institutions; and provide projects with technical assistance.

Trump’s threat will either push BRICS to reach new heights or level it to the ground. Ultimately, it’s up to the members of the bloc to decide whether the Global South needs to break free of Western hegemony or continue to be servile to the whims and fancies of hegemonistic leaders.