In August of 2023, South Africa will host leaders of Brazil, Russia, India, China and South Africa —- The BRICS nations. These countries will further discuss the economic bulkwark that they will erect against the West, in spite of the fact that China is our biggest trade ally. People seem to be concerned about this, but the fact of the matter is that the US dollar, as inflated as it is, will be just fine. As long as there are second world countries that the US can exploit for lower operation costs, business will continue as usual.

The only way the replacement as the dollar seems practical is to create fear in the markets and to act as a sort of Reaganite ‘Star Wars program’ ploy in order to create a stronghold to inhibit the US dollar in protest aginst Russian sanctions. China, a country that has literally built itself up into a formidible second world country by devaluing it’s currency against the dollar since the end of Bretton Woods, seems to be playing bigshot. I fail to see how any of this means any more than a trade war to gain geo-political clout. The dollar comes with intricate fincial instruments, guarantees, and infrastructure that BRICS can’t compete with at this point. That being said,

The Group of Seven nations (G7), consisting of the US, UK, Canada, France, Germany, Italy, and Japan, have officially been vested in global GDP share based on Parity of Purchasing Power (PPP. By 2028, the G7’s contribution to the world economy is predicted to decrease to 27.8%, while the BRICS will account for 35%.

The BRICS countries have been pursuing a wide range of initiatives to decrease their dependence on the dollar. Over the past year, Russia, China and Brazil have turned to greater use of non-dollar currencies in their cross-border transactions. Iraq, Saudi Arabia and the United Arab Emirates are actively exploring dollar alternatives.

Central banks have sought to shift more of their currency reserves away from the dollar and into gold. With limited information on various models under consideration, the whole idea of an actual BRICS currency seems vague and tactless on an economic level. Negotiating a single currency would be difficult given the economic power asymmetries and complex political dynamics within BRICS. And for a new currency to work, BRICS would need to agree to an exchange rate mechanism, have efficient payment systems and a well-regulated, stable and liquid financial market. To achieve a global currency status, BRICS would need a strong track record of joint currency management to convince others that the new currency is reliable.

To be sure, some of the group’s most ambitious past initiatives to set up major BRICS projects to parallel non-Western infrastructures have failed. Big ideas like developing a BRICS credit rating agency and creating a BRICS undersea cable never materialized. This has Cold War written all over it.