BRICS has recently expanded it's membership. The countries that are members of it comprise nearly half the world's population. It suffered a setback when a rightward president came to power in Argentina and cancelled the country's plans to join. But now Turkiye wants to join. Let's have a look at it.
A major recent development in the world is the growth of interest in BRICS. This is an organization of non-western countries. The acronym stands for Brazil, Russia, India, China and, South Africa, but many more countries have joined or expressed interest in it.
The best-known international organization is the G7. It consists of the U.S., Canada, Britain, Germany, France, Italy and, Japan. But the G7 has become, in much of the world, a symbol of past western domination that is not at all reflective of the world today.
The G7 was later expanded into the G20, although the G7 exists separately. But the G20 is still considered by much of the world as too tilted toward the west.
BRICS professes no hostility toward the west. But it is seen as the "Non-West", an organization of countries across the world that appear to have little in common other than a wish to move beyond western domination of the world.
A major objective of BRICS involves currency. The U.S. Dollar is the dominant reserve currency in the world. This goes back to the Bretton Woods agreement from just before the end of the Second World War, with the U.S. taking advantage of it's dominant position at the time. Richard Nixon took the U.S. off the Gold Standard, effectively ending the agreement, but by then the dollar had the momentum as by far the world's most important reserve currency.
The issue in the world today is that this gives the U.S. the ability to enact economic sanctions against other countries. The number one target of U.S. sanctions has been Iran, and also Venezuela, but now the main target is Russia. There is increasing resentment of this ability to impose sanctions on other countries, and the formation of BRICS can be seen as somewhat of a backlash.
The major obstacle to the BRICS movement is that it's membership is so diverse and scattered across the world. The only thing that they really have in common is the desire to undercut the dominance of the West. The central issue of BRICS is currency, to reduce the dominance of the U.S. Dollar as the world's reserve currency.
There is another organization that is somewhat of a parallel to BRICS, the Shanghai Cooperation Organization, but it's primary focus does not seem to be economic, in the same way as BRICS.
There is nothing innately special about the U.S. Dollar or anything written in stone that it has to be the world's reserve currency. It's just that it has momentum in it's favor and people have confidence in it. The creation of an entirely new currency by BRICS has been discussed but it seems more likely that there will be more emphasis on using existing currencies.
The creation of a joint currency inevitably involves member nations giving up some of their sovereignty, in that they can no longer print their own money at will. The Euro is the world's foremost joint currency and, although it is working well in Europe it hasn't displaced the Dollar as the global reserve currency.
For a nation's currency to be a global currency it must be completely convertible and must be allowed to "float" freely in value against other currencies. The world's two most populous countries are both members of BRICS. But China doesn't allow the Yuan to float completely freely. This risks allowing it's value to be determined by forces outside the country, including currency speculators.
India does not allow the Rupee to be readily convertible into other currencies. Making the currency completely convertible is taking a risk, it exposes the country to potentially volatile capital flows, including the money leaving the country. The Dollar is the world's reserve currency because the U.S. Government has been willing to take these risks.
Some have thought that maybe cryptocurrencies, such as Bitcoin, might provide a global currency. But a global currency must be stable, without great swings in value. The value of a currency operates by supply and demand, and global use of the U.S. Dollar keeps it's value relatively stable. When using a foreign currency, if it's value increases that makes a country's exports more expensive and increases the amount of real money that has to be repaid for debts. If it's value decreases that decreases a country's spending power, although it makes it's exports less expensive.
BRICS cannot be ignored. With it's new members it has close to half of the world's population, and many more countries want to join. But what it has to realize is that a global currency must be allowed to freely float in value and be freely convertible into other currencies. There are fewer than 20 currencies that are completely convertible, including the U.S. and Canadian Dollars, the Euro and the British Pound. Most governments are uneasy about completely removing restrictions on how their currency relates to foreign currencies.
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