- A defining moment in the global economic axis awaits as the BRICS Summit 2023 gathers in South Africa.
- The BRICS countries have the extraordinary chance to reshape the world order, bestowing more significant equity and amplified voice upon the realms of the Global South.
- This is a resounding statement to the BRICS’ rising legitimacy and relevance since no fewer than 19 states have already expressed their intention to join.
BRICS growth and role in a shifting global economic axis
The BRICS, a confederation of the world’s five fastest developing countries, exudes deep economic confidence. It presented an alternative global system capable of standing up to the Washington consensus-driven Bretton Woods Institutions. The group’s prominence stems from its comprising 3.2 billion people or 42 percent of the world’s population.
The BRICS economies account for 27 percent of world GDP and more than 18 percent of global commerce. These nations also account for half of overall global economic growth, making them the most important countries driving global growth.
Just this year, the BRICS overtook the G7’s global GDP contribution. Amid growing economic stagnation in the West, the BRICS even floated the idea of their own global reserve currency, looking to shatter the US Dollar’s stranglehold since the collapse of Bretton Woods in 1971.
The BRICS countries bear a profound responsibility amid a shifting global economic axis. They have the extraordinary chance to reshape the world order, bestowing more significant equity and amplified voice upon the realms of the Global South.
A defining moment in the global economic axis awaits as the BRICS Summit 2023 gathers in South Africa. It signals the member countries to seize this opportunity to shape an unprecedented global economic governance system, an inclusive, all-encompassing, and efficient system.
The BRICS goals and achievements
One of the BRICS’ goals is to utilize collaboration to transform the world’s political and economic infrastructure in their favour. The BRICS Parliamentary Forum and Outreach Dialogue are platforms for talks and interaction with regional neighbours and other nations of interest. South Africa, for example, uses the BRICS platform to advance its foreign policy objectives, including the African Agenda and South-South Cooperation.
Forming the BRICS Business Council, the Contingent Reserve Agreement, and the New Development Bank (NDB) formalized members’ economic links. The NDB, based in Shanghai, is a critical player in mobilizing funding for BRICS infrastructure and sustainable development initiatives.
The CRA offers member nations short-term liquidity assistance, improving financial stability and minimizing balance-of-payment problems. Swap arrangements came up among the BRICS member countries’ central banks. The swap agreement allows the central bank of a member nation experiencing a balance of payment problem to exchange local currency for hard currencies such as the US dollar with other BRICS members.
These arrangements have attracted many other emerging economies and developing nations with negative experiences with the IMF’s structural adjustment programs and austerity measures. It has become one of the primary reasons why some countries have indicated a strong desire to join the BRICS grouping.
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Rising legitimacy and relevance
This is a resounding statement to the BRICS’ rising legitimacy and relevance since no fewer than 19 states have already expressed their intention to join. Iran, Indonesia, Saudi Arabia, the United Arab Emirates, Mexico, Argentina, and Nigeria are just a few countries vying to join the BRICS family. They symbolize the attractiveness of this famous gathering, making an unmistakable stamp on the world scene, united in their quest for wealth and stability.
However, internal economic and political instability, disagreements over UN Security Council reform, and territorial conflicts between India and China all challenge the BRICS’ continuing cooperation and prosperity. Furthermore, external variables, including the fall in foreign investment and the Chinese economic slump, have hampered their growth. Many believe some difficulties spell the end of the group’s success. Members are optimistic that the BRICS 2023 Summit will prove the doubter wrong.
The BRICS’ quest to end the dollar’s dominance
With the shifting geopolitical environment threatening the conventional supremacy of the US-led West, the role of the BRICS is growing. For years, the BRICS member nations have sought to minimize their dependence on the dollar, and the process has lately been hastened by Western sanctions imposed on Russia in the aftermath of the Russia-Ukraine war.
Several other nations have also conveyed fears about their dollar-denominated debt and the potential ramifications if the United States fails, particularly in light of the Fed’s increasing interest rates and the world’s largest economy’s debt-ceiling dilemma. As a result, the globe is seeing a de-dollarisation process and a reduction in the country’s dependence on the US dollar in international commerce and finance.
Key Expectations from the BRICS Summit 2023
The agenda for the BRICS Summit 2023 will include trade and investment integration, sustainable development, innovation, and global governance reform. However, one of the main discussion topics during the 15th BRICS meeting will be the BRICS’ contentious proposal for a new gold-backed currency.
Many dispute the rationale behind this strategy, which reflects the BRICS’ goal to lessen dependence on the US currency. Some believe the move can solidify the BRICS’ position at the top of the global economy, while others believe it is a reaction to economic challenges inside the organization. In any case, BRICS members’ perceptions of the United States’ economic and diplomatic weakness have primarily contributed to the quest for alternative approaches.
Russia, China, and Brazil increasingly adopt non-dollar currencies in cross-border transactions, fuelling the de-dollarisation trend. The Russian invasion of Ukraine and ensuing Western sanctions have further fuelled these efforts. The BRICS countries have also looked at creating a BRICS cryptocurrency and the strategic coordination of Central Bank Digital Currencies for currency interoperability and economic integration.
A new BRICS currency would need substantial negotiations and the formation of exchange rates, payment systems, and financial market control measures. However, before creating a new currency, the business may first concentrate on building an effective integrated payment system for cross-border transactions.
Addressing BRICS new membership proposals
More than 40 countries have expressed interest in joining the BRICS group of nations. The question of how far and fast to expand the club – centred around Brazil, Russia, India, China, and South Africa – will top the agenda of BRICS Summit 2023, with nations seeking to topple the perceived hegemony of the US-led West in global affairs.
Sooklal, South Africa’s chief diplomat in charge of ties with the group, noted that “an equal number of countries that have informally expressed interest in becoming BRICS members…” in addition to the 22 nations that had formally applied, Including all the principal nations of the Global South.
Conclusion
As South Africa prepares to host the BRICS Summit 2023 in Johannesburg, South Africa, the world eagerly awaits the developments from this significant alliance on the international stage. Founded as BRIC and subsequently joined by South Africa, BRICS represents an alternative global economic and governance order that seeks to challenge the supremacy of traditional institutions.
With an impressive record of excellence through the New Development Bank and the Contingent Reserve Arrangement, BRICS piques the interest of many nations desiring a platform for fair representation. This defining moment in the global economic axis calls for unity and dedication, promising the Global South a future of equity and prosperity.
This crucial occasion demands nothing less than an outstanding display of strength, harmony, and a firm commitment to forging a more just and balanced future. The unfolding of events at the BRICS Summit 2023 shall resonate far beyond economic cooperation, echoing the profound impact of nations working hand in hand toward a shared vision of a better world.
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