BRICS SUMMIT 2023: FOCUS ON DE-DOLLARISATION AND GLOBAL ECONOMIC REFORM

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From August 22 to August 24, 2023, South Africa hosted the 15th BRICS summit; gathering leaders from Brazil, Russia, India, China, and South Africa. The summit aimed to redefine BRICS’s role in the global economic system. Key discussions included the need for major structural reforms in the global financial system, which has long been dominated by the United States since the Bretton Woods Agreement in 1944.

This summit held particular significance due to ongoing global tensions; including the conflict in Ukraine, escalating tensions in South-East Asia, and potential instability in the Sahel region after the coup in Niger. The African continent is becoming a diplomatic battleground for influence between the West, China, and Russia, with competition over raw materials and resources at its core.

BRICS, established in 2006, comprises Brazil, Russia, India, China, and South Africa, collectively accounting for 23% of global GDP and 42% of the world’s population. Recent data shows BRICS surpassing the G7 in global GDP share. This bloc represents a diverse range of economies and political systems; making it a forum for addressing critical global issues.

In 2014, BRICS members founded the New Development Bank (NDB), providing an alternative to the World Bank and IMF for funding infrastructure and sustainable development projects. Additionally, the Contingency Reserve Arrangement (CRA) was established to ensure liquidity during short-term balance of payment crises; reducing dependence on Western-dominated global financial institutions.

The summit witnessed interest from 43 countries to join BRICS; with 23 formally applying for membership. However, consensus on individual applications wasn’t reached. Only six states – Argentina, Egypt, Ethiopia, Iran, United Arab Emirates, and Saudi Arabia – were invited to join in January 2024. This expansion is viewed differently by member countries, with some concerns over potential shifts in influence, especially regarding China’s role.

Turkey, while expressing interest in joining BRICS, has not yet submitted an official application. President Erdogan’s statements underline Turkey’s balanced stance between East and West, dispelling assumptions of a definitive shift towards the East. However, BRICS has reservations due to challenges facing the Turkish economy, including inflation and unemployment.

BRICS is focused on reducing the dominance of the US dollar in global transactions. While progress has been made in using local currencies for trade among member countries, the dollar remains predominant in international transactions. Establishing a common BRICS currency faces hurdles; including economic disparities among member states, with China being a dominant force.

While the BRICS bloc presents significant potential, it may not single-handedly revolutionise global relations. The group’s influence will be complemented by other factors shaping international dynamics. Nonetheless, BRICS is a noteworthy step towards a more multipolar world.

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