You may have heard the term “BRICS” when reading about world affairs and wondered what it was all about. As we watch the American dollar and economy lose power on the world stage, this alliance could quickly move to take its place, especially as other countries that used to be allied with us move over this bloc.
As a matter of opinion, I think that on the global stage, BRICS is a union we should watch, as there are several large economic powers involved that aren’t exactly friends of the United States of America. Should this group continue to grow, it’s possible that it could dramatically affect us with regard to world trade. And that’s at the very least.
Let’s look a little deeper into it.
What is BRICS?
BRICS is an economic alliance that has been around since about 2001. Jim O’Neill from Goldman Sachs coined the acronym BRIC to represent the original countries: Brazil, Russia, India, and China. By 2010, South Africa had been added, bringing us to the current acronym. O’Neill predicted that by 2050, the original four nations would be the dominant forces in the global economy. Investopedia explains:
Brazil, Russia, India, China, and South Africa ranked among the world’s fastest-growing emerging market economies for years, thanks to low labor costs, favorable demographics and abundant natural resources at a time of a global commodities boom.
It’s important to note that the Goldman Sachs thesis wasn’t that these countries would become a political alliance (like the EU) or even a formal trading association. Instead, Goldman said they have the potential to form a powerful economic bloc, even acknowledging that its forecasts were optimistic and dependent on significant policy assumptions.
Still, the implication was that economic power would bring political power, and indeed leaders from BRICS countries regularly attended summits together and often acted in concert with each others’ interests.
Interest faded in the BRICS countries by around 2015, as per Investopedia. But does that mean we should write them off, too?
BRICS is expanding.
For many years, the United States has been a primary global economic power, but as our star shines a little less brightly due to our economic difficulties, poor governmental management, and less than stellar relationships with several other countries, BRICS seems poised to step into the position our nation once held.
In 2015, at their 6th summit, the founding nations created the New Development Bank, with a currency pool of 100 billion USD and an additional reserve of another hundred billion. The countries also agreed to cooperate with one another in regard to credit and innovation.
This has expanded over the years, and the nations have cooperated in things like planning an optical fiber submarine communications cable system for BRICS countries so that the US could not spy on its communications. (Although plans are in place, it has not yet been built at the time of this writing.)
But now, with the war between Russia and Ukraine, and tensions with China, things seem to really be gearing up.
What countries are involved in BRICS?
Current members of BRICS are still the original ones.
But…the union seems intent on expanding, and other nations are in the midst of an application process. Multiple countries have asked to become a part of the bloc.
The nations that have formally applied for acceptance into the cooperative are:
United Arab Emirates
In addition, interest has been expressed by the following countries:
The original nations are meeting in South Africa on June 2nd and 3rd to discuss expansion.
Why do we care about BRICs?
Not a great deal has been mentioned about this in the news, but I believe that such a union is a very troubling sign. I’ve written before that the dollar is rapidly losing international trust and potentially even petrodollar status, and it seems as though a group such as this is well-poised to step into our place. Plus, a lot of these nations aren’t exactly friendly to the United States in the first place. A formal alliance between countries like China, Russia,
India, and Iran is troubling, particularly as our government has instituted brutal sanctions in the past.
Bloomberg has said it expects the growth of BRICS to surpass the economic expectations of the G-7, the economic group of which the US is the leader, which consists of the United States, France, the United Kingdom, Germany, Japan, Italy, and Canada.
Zero Hedge reports on several reasons this is concerning.
Per their analysis, while G7 and BRICS nations each contributed equally to global economic growth in 2020, the western-led bloc’s performance has recently declined. By 2028, the G7 is expected to make up just 27.8 percent of the global economy, while BRICS will make up 35 percent.
The estimations came just a few weeks after the Deputy Chairman of Russia’s State Duma, Alexander Babakov, revealed that BRICS is working on developing a “new currency” that will be presented at the organization’s upcoming summit.
BRICS member states account for over 40 percent of the global population and around a quarter of the global GDP.
The interest from Global South nations to join the bloc comes at a time when more and more governments move away from the US dollar.
The greenback has become more unreliable for dollarized economies due to rising interest rates regulated by the US Federal Reserve (FED) and the bank’s weaponization of the dollar through financial sanctions.
In addition, the west – especially Europe – is facing a growing energy crisis resulting from sanctions targeting Russian energy markets due to its invasion of Ukraine and the US sabotage of the Nordstream pipeline.
Add to this that several Central and South American countries are interested in joining the ranks of BRICS, and this alliance could quite literally be in our own backyard. While this is assumed to be strictly an economic alliance, what happens if there is a global conflict? Would this coalition carry over into that realm as well?
Sides are being chosen.
What it looks like to me is that sides are being chosen and lines are being drawn. The United States has powerful enemies. (And that’s not even including the ones within our own borders who seem intent on destroying the very fabric of our culture.) While BRICS is not a threat to our way of life today, they could be a formidable foe in the very near future. While we lose economic power, they gain economic power. And in our modern world, that is everything.
For our entire lives, the United States has been on top of the global pyramid. One must wonder, when rivals begin to group together, how long we will keep that position.
Our concerns are not only within our system but also from alliances that could destroy our global economic power. This would be a crushing blow that would change everything from the price and availability of imports to the very fuel our country runs upon.
The expansion of the BRICS alliance is very important to watch. While we certainly can’t personally influence the proceedings, our awareness can help us to be one step ahead in our preparations. This could eventually destroy our already volatile financial system. We always think we have time, but it looks to me like that presumed time is rapidly running out.
Photo: Boston University
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