The recent BRICS Summit held in Johannesburg, South Africa between August 22-24, garnered little attention from the US media. Many individuals in the US may not understand the significance of BRICS and how it could potentially alter their economic lives.
Established in 2002, BRICS, an intergovernmental organization consisting of China, Russia, Brazil, and India, was expanded in 2010 to include South Africa. It is not simply an economic conglomerate of developing nations, its influence extends beyond that realm.
Following the Russian incursion into Ukraine, and the subsequent unsuccessful attempts by America to constrain Russia’s economy via imposing economic sanctions on the nation and its allies, there’s been a clear acceleration in the global economic de-dollarization, led by BRICS, under President Vladimir Putin and President Xi Jinping’s leaderships.
Since 1971, oil transactions have been predominantly conducted in US dollars, thereby meriting the term “Petro dollar”. Due to an agreement made with Saudi Arabia, the US has enjoyed substantial economic advantages globally, with most international transactions necessitating the usage of US dollars. In doing so, demand for the dollar has soared, granting the US the ability to simply print more dollars during times of economic crisis, such as the 2008 mortgage crisis. However, BRICS aims to disrupt the global reliance on American dollars, citing the weaponization of the currency by the US as their reasoning.
In the past two years, significant efforts have been made by BRICS, particularly Putin, to dismantle America’s economic supremacy. Adding another six member countries namely Saudi Arabia, Iran, UAE, Argentina, Egypt, and Ethiopia, they’ve strategically positioned themselves to control oil flow, thus threatening the Petrodollar.
The US is likely to be dissatisfied with Saudi Arabia’s shift from selling oil in dollars. Coupled with the fact that BRICS members have shown a preference for local currencies, it’s clear that the dominance of the US dollar is under threat. This has already been evidenced by India, with the nation having reportedly made an oil purchase of over a billion dollars in their local currency.
The considerable oil reserves of Iran and UAE increase the bloc’s power to push for de-dollarization. It is clear that the methods employed by BRICS to raise their global economic influence should not be dismissed, as it could cause a dramatic global economic shift that may negatively impact the US.
In conclusion, the BRICS 2023 Summit was a crucial diplomatic convention aimed to further the de-dollarization process. The addition of new members, including three major oil producers, reiterates a message to the US – BRICS is serious about altering the global economic landscape, with ordinary American citizens potentially being on the losing end.