The tender is now out for creative minds to come up with a new name for the expanded Brics bloc and an envisaged Brics currency.
Or will Jim O’Neill, the economist who coined the Bric acronym in 2001, come up with something once again?
There’s a lot of excitement among politicians and some uncritical academics about the new Brics bloc.
What is the hullabaloo all about? It’s as if there’s a tsunami in the making. From the politicians’ point of view, it’s perhaps understandable – politicians like symbolism.
But we also have academics who flow with the wind without maintaining a critical distance as they should.
How different this expanded Brics will be from kindred groupings only those pushing for its expansion can perhaps tell us.
How will it differ from other regional and international bodies like Opec, the Arab League, SADC, Sacu, Comesa, Ecowas, the European Union (EU), the African Union, the Commonwealth, the Group of Seven (G7), Association of Southeast Asian Nations or the UN itself?
The largest of these bodies, the UN, has not been able to prevent wars and, ironically, a permanent member of its Security Council, Russia, is at war with Ukraine.
At the just-ended Brics, Chinese president Xi Jinping said “the expansion is historic as it will bring new vigour to the Brics cooperation mechanism and further strengthen the force for world peace and development”.
Don’t forget, these are the same Brics countries said to be ‘neutral’ in that war and here they are talking about world peace.
BLOC IDENTITY
What is Brics actually? A social club, a political alliance or an economic/trade grouping?
The expanded alliance is touted as a force to redefine the global political and economic order. Dream on.
Industrial and technological advances will still dominate the world political and economic order which is dominated by the G7 and, to some extent, the Asian Tigers – and none of them are joining Brics. But here we go.
Yes, Saudi Arabia, Argentina, Ethiopia, Iran, Egypt and the United Arab Emirates are expected to join Brics come 2024.
Yes, a bigger alliance will give the group extra economic muscle. But how will this expanded group cooperate?
Will they speak with one voice and on what issues? What is the bond that will bind them?
Some commentators argue that the likelihood of Brics becoming an economic club like the G7 is low.
The bloc’s stated goal is to reform the financial and economic system which has been dominated by the United States and Europe for decades.
However, it is said to have attracted criticism for failing to pursue these goals by offering genuine alternatives to the International Monetary Fund, the World Bank and the three main credit rating agencies.
Economist O’Neill says the bloc has disappointed in so far as nurturing trade relations between its members are concerned.
DEDOLLARISATION
One big issue is said to be the dominance of the US dollar. According to O’Neill, “it is not especially healthy for the world to be so dependent on the dollar, and, as a corollary, on the US Federal Reserve’s monetary policy”. (The Namibian, 28 August 2023).
Thus the raging debate among Brics countries is about so-called dedollarisation. Then what?
What is the alternative to the greenback? Some are talking about the current Brics currency basket comprising the ‘Five Rs’ – real, ruble, rupee, renminbi and rand.
Now, with the expected expansion of the bloc, which currencies will be used? William Gumede, for example, wrote that “some Brics strategists have called for a Brics global reserve currency. The idea is that over time a Brics common currency would become similar to that of the euro, the common currency of the European Union.” (The Namibian, 24 March 2023).
The introduction of the euro did not diminish the dollar’s dominance.
The propaganda going on in China is that the “US dollar is being increasingly bypassed in trade contracts as many countries turn to yuan and other currencies.” (China Daily, Global Weekly, April 28 – May 4, 2023).
Maybe it’s not just propaganda from China because Russian president Vladimir Putin expressed the same view.
Putin said “the dedollarisation process among the block was irreversible, and the share of the US dollar in trade was decreasing.”
How true this is, only those in trade ministries and banking sectors can tell us.
WHAT NEXT?
Quo vadis the expanded Brics?
It is said its symbolic power will grow. But as I asked earlier, is it going to be an economic, political group or a social club where leaders meet at annual summits where they dine and dance?
There are those who say it’s difficult to pin down measurable differences the alliance has made. And as O’Neill tersely says: “If they continue to limit themselves to complaining about the dollar and musing in the abstract about a shared Brics currency, they are unlikely to achieve much.”
- Alexactus T Kaure is a freelance writer
