(ConcernedPatriot.com) – The possibility of creating a currency to compete with the U.S. dollar will not be discussed at the 15th BRICS summit, which starts on August 22 in Johannesburg, according to South African government officials who spoke to The Epoch Times.
However, other analysts are sure that this week’s gathering will signal the start of the creation of a BRICS currency backed by gold to halt what the group considers “U.S. dominance of global finance structures.”
US can no longer ignore BRICS as a political force – Asia Times
The BRICS countries are in fact openly contesting the status of the US global leader in the world.
Along with the expansion of the Union, its anti-American sentiments are intensifying, the authors of the article… pic.twitter.com/x6pEzaFZ25
— Sprinter (@Sprinter99800) August 21, 2023
The BRICS comprises Brazil, Russia, India, China, and South Africa. The bloc was formed in 2009.
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The New Development Bank (NDB), a financing arm of the BRICS, seeks to displace the World Bank and the International Monetary Fund (IMF) as a non-dollar alternative.
Anil Sooklal, the South African official organizing this year’s summit, claimed that developing nations now account for a significant portion of world commerce.
“Despite the fact that the United States no longer accounts for a significant portion of global trade, the dollar still represents over 50% of it. It’s absurd,” he said, according to The Epoch Times.
As a result, the Global South states that we must increase commerce, improve payment settlement, and change how we carry out financial operations.
The BRICS nations aspire to increase the use of local currencies in trade both within the group and with other countries from the Global South.
It’s not about de-dollarization; this is a natural development where countries are looking for greater financial flexibility, greater financial autonomy, and greater choices in how they conduct themselves on the global economic front.
However, Mr. Sooklal’s proposal that BRICS member currencies like the rand, rupee, and rouble be utilized in trade and other transactions moving forward was “too impractical” to be taken seriously, according to political economist and University of South Africa in Pretoria professor Everisto Benyera.
If that occurs, there will be significant issues simply because the economies from which these currencies originate are less stable than the U.S. economy.
“The United States continues to be the strongest, individually or collectively, in terms of security,” he told The Epoch Times. “These economies could be bigger in terms of GDP and so on,” he said.
According to Mr. Benyera, developing a BRICS currency with gold backing is the only viable method to end the dollar’s supremacy.
He emphasized that all of the BRICS nations, except India, were among the world’s top gold producers.
According to international economic organizations, China is the world’s biggest producer of gold, followed by Russia and South Africa. Brazil is ranked fourteenth.
“The developing world, including much of Africa, produces by far the most gold in the world,” Mr. Benyera continued.
“Therefore, gold could readily serve as the foundation of a new currency if other significant gold miners join an expanded BRICS, as is being proposed,” he adds.
“However,” he added, “this will take time.”
“I don’t see another currency challenging the U.S. dollar any time soon. A worldwide economic and political disaster would result from moving too quickly with something this important,” he continued.
Mr. Benyera stated, “Some are claiming that the current conflict between Russia and Ukraine has the potential to result in the creation of an alternative currency, but as of right now, I see the U.S. dollar continuing to be the de facto world currency.”
“The formation of a BRICS currency would “take a long time,” but according to Brazilian economist Paulo Batista, it was “inevitable.”
“The dollar will still exist, but it won’t have the same dominance it has had since the Second World War. Why? Because the U.S. itself is the dollar’s most significant foe,” according to the former IMF executive director and former NDB vice president.
“Washington undermines the credibility of the dollar and its own financial system when it uses it politically to target nations it deems hostile. The United States itself has damaged trust in the dollar,” the former director added.
He continued, “Therefore, there will be a gradual shift toward greater financial option diversification; the question is only when and how.”
Mr. Batista said, “The invasion of Ukraine by Russian President Vladimir Putin prompted the United States to freeze $300 billion in Russian foreign reserves. This action was observed by nations in the Global South.”
“They are turning to the BRICS to discover methods to lessen their reliance on the dollar because they are concerned that the same could happen to them,” Batista added.
Even as the leaders of the BRICS were preparing to consider the prospective admission of nations like Iran and Belarus into the group, he said he did not believe that BRICS would grow into an “isolationist, anti-West bloc.”
Batista continued, “I don’t believe there is a plan to utterly reject the West and eliminate the currency, the IMF, or the World Bank. The NBD and possibly a BRICS currency are meant to diversify and provide options. Diversification must occur.”
“China has already established the Asian Infrastructure Investment Bank (AIIB). As a result, emerging countries are leaving behind conventional institutions because they are unhappy with the current global governance system. It is unfair, unbalanced, and frequently subject to political manipulation,” he added.
According to Mr. Batista, the BRICS nations are pushing for “a multi-polarization of the currency system, a diversification,” rather than the demise of the U.S. dollar.
For instance, the (Chinese) renminbi has become more significant and will do so. This will be crucial if the BRICS nations create a reliable alternative currency.
According to Mr. Benyera, a gold-backed currency has been “a long time coming.”
He emphasized that the early African politicians, such as Ghanaian nationalist leader Kwame Nkrumah and Guinea’s first president Sekou Toure, sought a single African currency backed by gold when colonialism ended in Africa between 1945 and the 1960s.
Therefore, Mr. Benyera added, “History demonstrates that the emergence of a gold-backed currency is not so easily achievable.” Africa essentially holds all the gold in the world. Still, due to the continent’s continued division and the fact that each mineral-rich nation has decided to pursue its own specific limited interests, this has never happened.”
Mr. Benyera said, “However, gold is the best option. The late (Libyan leader) Colonel Moammar Ghaddafi argued that for Africa to be strong and united, it must focus on the easiest targets to capture.”
“And if we start using our gold as a form of payment among ourselves, the entire globe will adopt it,” he added.
Among the BRICS nations, Mr. Benyera projected that India would oppose creating such a currency.
India is encroaching on American territory.
When Prime Minister Modi visited Washington recently, his discussions with President (Joe) Biden were excellent, and they made several announcements regarding cooperation. Indian officials hold prominent roles at the IMF and the World Trade Organization.
“BRICS was not as united as its diplomats would have the world believe, according to the Indian perspective,” he claimed.
Since 2009, it still hasn’t outlined its goals and mission clearly. It struggles with its identity. Even the BRICS secretariat lacks sufficient power.
Compared to other blocs, such as the European Union, they advanced quickly, quickly consolidated, and promptly developed a currency and a parliament. But BRICS lacks all of these after 15 years.
Mr. Benyera states, “This is because the BRICS nations are still not fully committed to the group and are still centered on accomplishing their own unique goals.”
When there is no vision, you can’t come together behind it, he insisted.
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