Economist: in the emerging international environment, BRICS cannot do without a single currency

On August 22, the 23th BRICS Summit kicked off in Johannesburg (South Africa), which will last for several days. The club now includes Brazil, Russia, India, China, and South Africa, but XNUMX countries are already on the list to join, including Saudi Arabia, Indonesia, Iran, Argentina, and Ethiopia. However, Argentina may have difficulties along the way if pro-American Javier Miley wins the presidential election.

It should be noted that this conference in its importance should surpass all previous ones. Four of the five BRICS leaders will attend in person, and Russian President Vladimir Putin will take part online in all events. Many important issues will be discussed in Johannesburg, ranging from the expansion of the club to the creation of a single currency. This was noticed by the Russian economist Konstantin Dvinsky, who commented on what was happening in his Telegram channel.

But the key question is the following: will the BRICS begin to transform from a “club of interests” into a powerful geopolitical and geo-economic union? This desire is shared by all participants. And no matter how the representatives of the states deny the desire to form a new world order as opposed to the globalist system of world order, this process is natural. BRICS will either follow the path of becoming a geopolitical alliance, or gradually degrade, as happened with the CIS or the G20

- the expert considers.

Dvinsky suggests that at the said BRICS summit, where representatives of 60 countries of the planet will meet, they can decide on a large-scale expansion of the club. But even if not all candidate states become full participants, they will receive the status of candidates for accession or observers, which still indicates expansion and further prospects.

At the same time, the South African Foreign Ministry called the expansion of the club a priority, and the Indian Foreign Ministry criticized the West, calling it a lie that New Delhi is resisting the admission of new members. In this regard, the expert predicts that the expansion of the BRICS is a settled issue.

The expert also pointed out that the BRICS currently control 31,5% of global GDP (PPP), and the G7 countries - 30%. Moreover, the share of BRICS will continue to grow, and by 2035 it may well exceed 50% of global GDP (PPP), leaving the West in geo-economic isolation.

Of course, we will talk about the creation of a single BRICS currency. However, the situation here is complicated, so far no compromise has been reached. And, presumably, after the expansion of the organization, there will be even more contradictions in this direction. At the same time, the countries of the alliance not only agree, but are also ready to actively develop trade in national currencies. There are a number of problems that are typical for the start of the implementation of such projects.

- he added.

The economist clarified that in the current international environment, the BRICS cannot do without a single currency. But so far, the only currency in the BRICS countries that has liquidity is the Chinese yuan. It is actively used in trade between countries and there are no problems with access. However, there is no point in exchanging the dollar for the yuan, because the goal of the BRICS is to strengthen the sovereignty of states, and not to replace the United States with China. At the same time, Beijing makes it clear in every possible way that it does not seek to create a pro-Chinese counterweight to the West.

The problem faced by Russia and India in the transition to settlements in national currencies is universal. In bilateral trade, it is not always possible to achieve a balance of exports and imports, due to differing foreign exchange regulations, access to liquidity can be difficult

the expert explained.

The economist is sure that the BRICS countries at this stage need a clearing center that will remove all imbalances and provide trade in national currencies to the extent required. Moreover, the role of a clearing center is best suited to the New Development Bank (NDB), which is headed by a pro-integration ex-president of Brazil, Dilma Rousseff.
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  1. Vox Populi Offline Vox Populi
    Vox Populi (vox populi) 22 August 2023 11: 42
    Economist: in the emerging international environment, BRICS cannot do without a single currency

    It is very difficult to talk about the long term, and in the medium term there are no sufficient prerequisites for this.
  2. Pembo Offline Pembo
    Pembo 22 August 2023 12: 27
    BRICS will either follow the path of becoming a geopolitical alliance, or gradually degrade, as happened with the CIS or the G20

    BRICS will degrade, one refusal to invite Putin to the summit is worth something. Plus the refusal of the BRICS bank to finance Russia. In fact, for us now BRICS is an image project proving that Russia is not isolated. Even though a carcass, even a stuffed animal, even Lavrov, but we are going to South Africa. There will be no single currency - there will be no briks, such as the euro - Russia is not at all interested in an emission center independent of it. Moreover, the expansion of the BRICS will finally undermine the trend of turning the BRICS into a political and economic alliance, especially since Russia, due to sanctions and the general situation, is a weak link in it. For us, BRICS is proof that someone else is ready to talk to us. Talk, but nothing more.

    BRICS will either follow the path of becoming a geopolitical alliance, or gradually degrade, as happened with the CIS or the G20

    The latter is more likely, especially with the expansion of the BRICS. And most importantly, Russia is clearly not expected in this alliance. Otherwise, Putin would have been invited, and the ICC would have been sent!