Members of BRICS (Brazil, Russia, India, China, and South Africa) are finally making appropriate indications for a common pursuit of economic autonomy. In an era of a very cantankerous foreign policy of unilateralism espoused by the US under the Trump administration, the threat of economic demise for perceived or real adversaries of Washington looms ever large. The post-Cold War dominance of the US dollar in international trade has seen the US arbitrarily extend its judicial jurisdiction beyond its borders ostensibly on grounds that if any crime committed anywhere in the universe features the US dollar in any form or shape, that automatically warrants US intervention.
At the recent 11th BRICS Summit held in Brazil, the five-nation bloc high-lighted in rather diplomatic terms their desire for a more “multilateral system” that is properly governed. This was, of course, their polite way of criticizing Washington’s much-maligned policy of unilateralism.
President Cyril Ramaphosa, forever the gentle one, was particularly pleased by BRICS’ stated intent “to promote trade among member states and play a key role in the growth of the world economy”. The summit in Brazil was held under the theme “BRICS: Economic Growth for an Innovative Future”.
Now, in 2014 BRICS founded the New Development Bank (NDB). The primary purpose of the bank is to finance infrastructure and sustainable development projects within the BRICS bloc. One of the stated key objectives since the BRICS bank formerly opened for business in 2018 has been to phase out the US dollar by setting up payment networks to cut dependence on the World Bank, International Monetary Fund and the entire Western financial system.
This is bold and courageous. Within a year of operating, the Shanghai-based BRICS bank has already financed over thirty-five investment projects worth more than nine billion US dollars. In Brazil, Russian President Vladimir Putin called on BRICS nations to increase the use of their national currencies in trade.
For its part, Russia has in the past five years alone almost halved its foreign trade payments in US currency -from 92 to 50 percent, according to the CEO of the Russian Direct Investment Fund (RDIF) and member of the BRICS Business Council Kirill Dmitriev.
Addressing the media on the sidelines of the BRICS Summit in Brazil, Dmitriev said that payments in Ruble increased from 3 to 14 percent over the period.
Combined, the BRICS countries represent more than 40% of the world population. The five countries also have a combined nominal GDP of 18.6 US trillion dollars and around 23% of the gross world product.
As Putin puts it: “The integration of payment systems and the establishment of an independent channel of information exchange could facilitate stability of the banking systems of the five countries.” As things stand, the successful Ruble-Yuan trade between Russia and China are providing ample evidence that “where there’s a will, there’s a way”.
The economic integration of the BRICS countries will enhance cooperation within the bloc on other matters outside of the financial markets. The bloc can henceforth take a united stand at multipolar forums such as the G20, UN, World Economic Forum, etc. It is a rare bargaining power with a huge potential for the collective growth of BRICS. And, just imagine, we haven’t touched on the benefits of military cooperation, a topic on its own for another day.