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Tech Revolution: BRICS Just Announced More Countries Getting Ready to Ditch the Dollar

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Tech Revolution
Dec 16, 2022

The balance of economic power worldwide has been drastically rearranged during the previous two decades. Also, the emergence of China, and to a lesser extent, the BRICS nations, has been the primary factor in this.

The BRICS include not just the East Asian superpower but also the other four major developing nations of Brazil, Russia, India, and South Africa.

And the more standardized and formalized this group has grown, the more it has become a part of the larger system. They have even established collective entities and hold regular summits.

Now, many analysts are concerned that with its rising power comes the potential for authoritarian versions of state capitalism’ to become the norm. And just recently, they announced that more countries are ready to ditch the US dollar!

The BRICS is a made-up group of countries and economies. And in the early 2000s, ex-Goldman Sachs economist Jim O’Neill popularized the acronym BRIC.

He used it to characterize the four developing nations poised to begin catching up to the West by the turn of the millennium.

In retrospect, this idea looks to be fraught with difficulties. Around 2014, Brazil’s economy slowed drastically as the country battled early de-industrialization.

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And historically, Russia has been a world powerhouse. So, calling it a “rising” was and is a stretch.

In particular, the country’s post-communist industrial sector has remained very modest, keeping the country’s overall size relatively modest. Even now, as the government launches a massive military assault.

Also, despite having approximately three times as many people as the United Kingdom and the world’s biggest, most resource-rich region, its GDP is still around half that of the United Kingdom.

Now, rapid development in India is remarkable. Although its economy is now around one-fifth the size of China’s, its proportional share of global GDP has actually fallen.

An author draws parallels between the two, calling them the “slouching tiger” and the “roaring dragon.”

And finally, it may be argued that South Africa is not a growing power on a global scale. It wasn’t initially included in the grouping, but it was added later for regional representation.

In reality, the meteoric ascent of China is the main focus of the BRICS narrative. Its growth has been so steady over so many years that it has fundamentally altered the balance of economic power worldwide.

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Many others have recently adopted a more optimistic stance toward the group’s plan to abandon the US dollar.

As the argument goes, eastern modes of state-led growth are preferable to Anglo-American economic and political institutions. And that’s consistent with, and dependent on, a free and open international economy.

Now, what’s certain is that Russia’s invasion of Ukraine has reignited the worries of many Western liberals.

Western countries have reason to be concerned following reports that Egypt, Iran, Saudi Arabia, Turkey, and Argentina, all of which are not democracies, have requested to join the BRICS.

According to data, China’s GDP is significantly more than the sum of that of the other four BRICS countries combined. It’s about $18 trillion, compared to Brazil’s $1.6 trillion, Russia’s $1.8 trillion, India’s $3.2 trillion, and South Africa’s $400 billion.

The US economy is estimated at $23 trillion. However, when measured in terms of purchasing power parity, China’s GDP rivals any other country’s.

In July, it was reported that Iran and Argentina have submitted membership applications to join the BRICS. The BRICS is expanding, and with it comes greater political and economic influence.

Around the middle of this year, President Putin made a major announcement at one of the BRICS summits. He said that a new global reserve currency, composed of a basket of BRICS currencies, was about to be introduced by Russia, China, and the other BRICS nations.

Now, such a reserve currency would pose a severe challenge to the US dollar if it were to gain widespread acceptance.

It’s hard to look at these two stories and not see them as connected.

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Experts say Iran and Argentina only follow the crowd by joining in on the trend. And the reason is that they see an opening to form a new coalition in opposition to Western-led globalization.

Meanwhile, the rest of the BRICS are encouraging them to join since they’ve spotted blood. Moreover, the rapid reversal of Western sanctions on Russia has exposed what they believe to be significant economic flaws.

https://www.youtube.com/watch?v=fBsskKCFTaw

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